Atlantic City Mayor says No Tax Break for Failing Trump Taj Mahal

In an effort to save the Trump Taj Mahal from its impending closure date on November 13th, a group of potential investors have asked that Atlantic City give the casino a break on its property taxes. However, this idea was nixed by Mayor Don Guardian today as he said that the casino will receive no such break.

“Given the difficult economic situation in Atlantic City, we are not in a position to accept these requests,” Guardian said. “We cannot afford these demands.”

The demands that Guardian speaks of include asking the city to reduce the valuation of Trump Taj Mahal from $1 billion to $300 million. This would drastically cut the $50 million in annual property taxes that the casino resort has to pay. Furthermore, it would make investing in the casino much more attractive to billionaire Carl Icahn, who’s thinking about dumping $100 million into Trump Taj Mahal.

However, the chief problem here remains that Atlantic City itself is also in trouble. Based on their ailing casino market and successful property tax challenges, the city has racked up a massive debt. They now plan to slash their budget by $40 million over the next four years and lay off workers. So allowing the Taj Mahal to operate with much lower annual property taxes would be yet another financial blow to the local government.

Given that the city won’t concede to a lower valuation of the casino, it seems increasingly unlikely that Icahn would bail Trump Taj Mahal out. He not only wants tax breaks from Atlantic City, but also $25 million in funds from a New Jersey agency and concessions from the workers’ union.

Regarding the latter, Icahn and Trump Entertainment, Taj Mahal’s parent company, asked Unite Here Local 54 to consider dropping pension plans and healthcare benefits for the workers. Icahn’s group believes that this is the only way to save the casino and the jobs of over 2,800 employees. However, the union has balked at this proposal, claiming that even if they agree to these steep demands, the casino is so far in debt that it would still close.

Considering the gaps in all sides coming to an agreement, Trump Taj Mahal may very well be the fifth casino to close in Atlantic City this year. Atlantic Club, Showboat, Trump Resorts and Revel have all shut their doors in 2014, reducing the town’s number of casinos from 12 to just seven.