New A.C. mayor vows to dig city out of 'mess'

Mayor Don Guardian said he plans to make Atlantic City strong again.
Mayor Don Guardian said he plans to make Atlantic City strong again.
Posted: January 16, 2014

ATLANTIC CITY For Don Guardian, the huge snowstorm on his third day on the job as mayor presaged the task ahead for him and his struggling resort city as it faces a $40 million budget shortfall.

"I know we are in a mess, and it's my job to dig us out of it," Guardian, the first Republican in 23 years to take over the reins of Atlantic City, told a business group Tuesday.

He was the keynote speaker before the Atlantic City Metropolitan Business and Citizens Association (MBCA) at its annual luncheon at Caesars Casino Hotel.

Guardian defeated Democratic incumbent Lorenzo Langford in November and was sworn in Jan. 1.

"We are in a tunnel . . . but there is light at the end of the tunnel," he told about 1,100 people packed inside the Palladium Ballroom, who gave him a standing ovation as he was introduced. The audience included casino executives, lawyers, contractors, developers, and others.

His speech was considered a preview of his State of the City address early next month before the nine-member Atlantic City Council.

Guardian, a former vice president of the MBCA, one of the city's largest and most influential business groups, did not mince words as he outlined the city's strained finances.

The city is in a fiscal crisis in part because of plummeting casino property valuations, and it will require both government belt-tightening and an effort to diversify the economy to turn things around, he said.

As gaming revenue has nose-dived because of regional gambling competition from Pennsylvania and New York, several Atlantic City casinos have appealed their property taxes and won.

In the last three years, the city has had to refund more than $250 million in casino property taxes - using borrowed money.

The most recent tax-appeal hit to Atlantic City came in October when the Borgata, the city's top-grossing casino and largest taxpayer, won a nearly $49 million property-tax refund, plus interest, in New Jersey Tax Court. The city government, now headed by Guardian, is appealing the ruling.

On Monday, the Atlantic Club casino, struggling for years, shut its doors, unable to find a buyer. That has left the city with 11 casinos.

Figures released Tuesday by the New Jersey Division of Gaming Enforcement showed Atlantic City gambling revenue plunged below $3 billion last year for the first time in 22 years, while online gaming - which started Nov. 26 from computer servers housed at the city's casinos - came in at a slower clip than expected.

"In 1974, we were in a dark tunnel and the light at the end was casino gambling," Guardian said. "We had a monopoly on casino gambling for decades, and it got us to the light. But that was not sustainable. Now, 40 years later in 2014, we are back in the dark tunnel.

"I have to figure out how to work with a $40 million shortfall and not raise your taxes," Guardian told the group.

To try to make up the deficit, Guardian said, the city will ask the state for $30 million in transitional aid for the next fiscal year, which starts July 1. He is scheduled to introduce the budget to City Council Feb. 7.

He also said to expect $10 million in cuts to the city budget each year for the next three years.

"By 2017, the city will be whole again, but we have a lot of work to get there," he said.

He noted that the city has been under a state fiscal monitor for the last three years, about the same time the casino tax appeals began to accelerate.

He said Atlantic City has to find ways to increase tax revenue, improve its business climate, attract new and younger residents, create new jobs, build better housing, and reduce poverty. The unemployment rate in the city is higher than the national and state rates.

To receive state transitional aid, Guardian said, the city has to reduce the cost of government. The city will have to do more with less, he said, without providing details.

Using a projection screen, the new mayor also outlined some major development initiatives.

Among them: a vacant-land giveaway program for developers to build 400 housing units; a 10-year mortgage forgiveness program to encourage Atlantic City police officers to live in the city; and a $50 million project to rebuild the Inlet Boardwalk.

The goal is to expand the residential base of the city of 40,000 by 10,000 people, Guardian said.

The notion of bringing new housing to Atlantic City was welcomed by Edward Hagaman, council representative for the Northeast Regional Council of Carpenters, which has offices in the city and Hammonton.

"I like the inspiration in his speech and how he's trying to have everyone involved in his vision for the city," Hagaman said.

In the works: a $26 million project by Conifer Homes for 90 homes; a $16 million project by the Casino Reinvestment Development Authority for single-family townhouses; a project to create 12 luxury condo units under a five-year tax abatement plan; a $100 million project by Boraie Development, a group involving former NBA star Shaquille O'Neal, to build 250 multifamily housing units in the South Inlet area; and a new four-year college in Atlantic City starting with 1,500 students, with housing for 400.

"We need to make Atlantic City a place where developers want to build," Guardian said.

856-779-3928 @SuzParmley

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