Christie Given Approval For Immediate State Takeover Of Atlantic City

TRENTON, NJ – After months of arguments and uncertainty, Gov. Chris Christie’s administration on Wednesday was granted the authority to immediately seize control of financially distressed Atlantic City.

The state Local Finance Board voted 5-0 to approve a five-year state takeover of the local government in the seaside gambling resort — an effort Christie says is the best way to keep the city from becoming the first New Jersey municipality since 1938 to go bankrupt.

The decision gives the state the power to assume key functions usually controlled by local leaders: renegotiating union contracts, hiring and firing employees, selling city assets, reversing decisions of the city council, and more.

The city becomes the first to municipality to be taken over by the state since Camden in 2002.

“This is definitely a sad day in the history of Atlantic City,” City Council President Marty Small said after the vote.

Mayor Don Guardian had said in recent days that if the takeover was approved, the city would challenge the move in court.

But on Wednesday, he said city officials will hold off on such a move until they talk more with the state.

“I think everything is on the table,” he said. “We have to see how cooperative (the state is).”

Five casinos have closed in Atlantic City since 2014, causing the city’s tax base to plummet and blowing a $100 million hole in its budget. The 39,000-resident city is also more than $500 million in debt.

Christie, state lawmakers, and local leaders have bickered since January about how to help the city. The Republican governor ended up signing a rescue package in May that gave local officials 150 days to come up with a five-year recovery plan. The state could impose a takeover if the plan was rejected.

The state Department of Community Affairs shot down the city’s proposal last week. The Local Finance Board then voted Wednesday to finalize the takeover.

The only power the board did not grant the state was the ability to file for bankruptcy on behalf of the city.

Timothy Cunningham, director of the department’s Division of Local Government Services, will oversee the takeover. He said he wasn’t certain what duties the mayor and council will retain, calling the move “unchartered territory.”

“It’s an unbelievable responsibility — one I lost sleep over last the couple of days heading into this,” Cunningham said of the difficulty of the scenario. “And I’m sure I’m going to lose sleep tonight.”

Ted Light, a board member, said the vote was not an easy one.

“It almost make you feel you’ve got to be a god to do these things, and I’m not a god,” Light said. “But you have to make the decisions you feel are best.”

The state alresdy has oversight in Atlantic City. In 2010, Christie announced the state would take over the city’s tourism district and also installed a state monitor. In 2015, the governor appointed an emergency management team there. But the takeover expands the state’s role.

One of the key developments now will be what happens to the city’s Municipal Utilities Authority, which provides residents water. Guardian said Wednesday he believes the authority was the biggest reason the state pursued a takeover. Critics have feared Christie’s administration could seek to privatize it.

Lena Smith of Food & Water Watch, advocacy group that opposed the takeover, said in a statement Wednesday that the takeover “is about denying the people a voice in their own future, and the likely handover of a precious asset — the city’s water system — to private corporations” close to Christie, state Senate President Stephen Sweeney (D-Gloucester), and Democratic south Jersey powerbroker George Norcross III.

But Wall Street Credit rating agency Moody’s Investor Services issued a statement after the vote saying the takeover a “credit positive move” because the state now has the ability to make the city’s debt payments due Dec. 1 and 15.

“We will watch developments closely to determine how they will impact the city and the city’s Municipal Utilities Authority,” Doug Goldmacher, an analyst at the agency said.

And the city appears to find hope in some good else. The vote comes a day after Republican Donald Trump was elected America’s president. Christie, one of Trump’s top advisers, could be given a post in the new administration, forcing him to resign as governor.

That would mean Lt. Gov. Kim Guadagno would succeed Christie.

Asked if Guadagno would be better for the city’s situation, Guardian responded: “What do you think?”

Brian Murray, a spokesman for Christie’s office, deferred comment to the Department of Community Affairs.

Steve Young, a community activist in the city, actually invoked Trump’s election as a reason to vote against the takeover.

“This is an example of what this country could turn out to be under Chris Christie and President-Elect Donald Trump, taking away our rights and sovereignty,” Young told the board. “Who do we talk to as residents? What will government look like with the state of New Jersey overpowering the residents? We are headed for some bad times, and your city could be next.”


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