ATLANTIC CITY--What will be Atlantic City's newest hotel and casino could receive a tax break from the state that some are strongly opposed to. Revel Entertainment executives say it's a proposal that could help Atlantic City with future development, while others believe it could severely hurt the gaming resort.

It's a project that's pushing through the tough economic times and may now be getting some help from the state of New Jersey. "We still have to raise the financing, we have to raise the capital, and we have to take the development risk," said Kevin DeSanctis, Chairman and C.E.O. of Revel Entertainment, "all this is saying is, if you do all those things and you give us this money, then we'll refund a little bit back to you."

The way the tax proposal, known as tax increment financing, would work, is that during the casino's first 20 years in operation, the state would allow a 75% abatement on sales and room taxes. "It's sort of like me saying to you, listen, if I give you $3 billion, will you give me $260 million back? I think almost anybody would take that deal," said DeSanctis.

"This is a bad deal for the citizens of Atlantic City and the taxpayers of New Jersey." The President of Local 54 is strongly opposed to the proposal, which was made possible through the Economic Stimulus Act of 2009. "I don't know why the citizens of New Jersey, running a $9 billion deficit right now, need to give $300 million to a casino developer who would still need an additional $700 million from banks that won't give him the money in the first place," said Bob McDevitt, "it's a bad investment all the way around."

DeSanctis says their first, second, and third priority right now is securing that financing and believes that this tax break could help. "I think what it does, it gives lenders comfort knowing there's a little bit more money there to make sure that they get paid back their loan," he said.

"Why isn't the state interested in supporting casinos in Atlantic City who have been open for 25 years and have paid billions in taxes in those 25 years," asked McDevitt.
He says one of his biggest concerns is that Revel coming online could potentially shut down one or two existing casinos, resulting in mass layoffs, however, DeSanctis thinks the union leader may have a separate agenda.

"My guess would be, Bob is looking to try to negotiate a contract," he said, "so, I think he's probably trying to put a little pressure on us. But, frankly, we're not going to reward bad behavior."

"That's not even the issue here," said McDevitt, "the issue here is one of fairness. Do you give someone hundreds of millions of dollars of subsidy knowing you're going to put other businesses out of business because of that subsidy?"

The proposal is before the state's Economic Development Authority, but it's unknown if new Governor, Chris Christie, supports it. "If we can do this and we're successful, then I think we'll bring other people into the city," said DeSanctis, "and that's our goal- not for us to be the last development. We're looking to bring other people into the city to develop."

State Senator Raymond Lesniak has proposed a bill that would block a referendum on the proposed tax break and effectively block Local 54's effort to stop it, and said, "The New Jersey Economic Stimulus Act stands as one of our most important tools to encourage new business investment and a strong economy for residents well into the future."