Atlantic City Struggles Despite Gov. Christie's Deep Involvement

In his recent State of the State speech, New Jersey Gov. Chris Christie bragged about how the state government has helped turn around Camden, long considered one of the nation's most troubled cities.

But another urban problem child -- Atlantic City -- went virtually unmentioned, despite an equally intensive effort there by Christie to try to turn things around.

Christie's appointment of a corporate turnaround expert as an emergency manager for the troubled city -- and his hiring of the man who led Detroit through its municipal bankruptcy to help out -- is just the latest in a long series of steps Christie has taken to try to fix Atlantic City. It can also be seen as an acknowledgement they haven't worked as well as he had hoped.

"We haven't gotten there, and I can't wait any longer, and so we need to take more aggressive action," he told participants in a summit meeting on the city's future. "This is not to declare that what we've done before has been a failure. In fact a lot of what we've done has improved circumstances here in Atlantic City, but we are digging out of an enormous hole that was brought over a long, decades-long period of time."

Kevin Lavin, a corporate finance expert, is Atlantic City's new emergency manager. Kevyn Orr, who helped both Chrysler and the city of Detroit through bankruptcies, is his assistant. They are tasked with finding ways to stabilize the city's finances for the long haul, reducing debt and restructuring operations.

The emergency order Christie issued in hiring the pair leaves the door open for Atlantic City to file for bankruptcy -- something state Senate President Steve Sweeney has vowed to try to block in court.

Christie acted to help the struggling city, its beleaguered casinos, and its residents, whose taxes were raised by 29 percent last year. But the move also could put some daylight between him and a situation not likely to materially improve by the 2016 election, in which he is considered likely to run.

"From a national perspective, when you say 'Atlantic City' now, the image conjured up in a 15-second sound bite is the loss of jobs, economic reversal and all kinds of negative images you don't want associated with you in a presidential campaign," said Brigid Harrison, a political science professor at Montclair State University. "The governor strategically wants to distance himself from that; this is not an economic success story he can brag about."

Atlantic City's problems are real, and writ large in partially burned-out neon letters along the Boardwalk: Four of its 12 casinos shut down last year, putting 8,000 workers on the street, and three of the survivors are bankrupt. Its casino revenue has fallen by nearly half in the last eight years, from $5.2 billion in 2006 to $2.74 billion last year.

The city itself has $397 million in debt and a $260 million annual budget for a city of just 40,000 residents.

Don Guardian, Atlantic City's first Republican mayor in 23 years, said the emergency manager is not needed, but credited Christie with trying to help his city.

"No other governor has done more for Atlantic City than Chris Christie," he said. "We have been blessed to have the sitting governor of New Jersey make Atlantic City's revitalization one of his top priorities."

In Camden, there have been major changes to schools, policing and efforts to attract businesses under Christie's watch. The Camden County government formed a new police force that replaced the disbanded city force, and the state has used tax credits to persuade big businesses to move to the city, promising thousands of jobs.

Christie has been equally involved with Atlantic City. He tabbed a close confidante, Jon Hanson, to come up with a five-year turnaround plan for the seaside gambling resort. The plan included creation of a state-run tourism district with more police patrols and sanitation, greater control of a casino reinvestment development agency and more direct control over casino regulation by bringing its main functions under the state attorney general's office, and a five-year moratorium on the idea of expanding casinos beyond Atlantic City.

Christie was an enthusiastic cheerleader for the failed Revel casino, committing the state to tax incentives that helped convince Wall Street to provide the final $1 billion needed to finish the $2.4 billion project. The credits, tied to specific profit levels, were never paid because Revel never turned a profit in its 2-plus years of existence.

He also fought, unsuccessfully thus far, to overturn a federal ban on legalized sports betting in all but four states.

The Republican governor has not signaled a position on a package of Democrat-sponsored bills that would let casinos make set payments in lieu of property taxes for 15 years, and would help pay down some of the city's debt. Those measures have stalled in the state Legislature.