| NEW YORK, July 17
NEW YORK, July 17 New Jersey officials
considered a state takeover of Atlantic City's assets and
proposed punishing the struggling New Jersey gambling hub if it
did not agree, according to a draft document reviewed by
Atlantic City has come under increasing financial oversight
from the state, but the memo shows state officials contemplated
a dramatic intervention to help pay down its roughly $400
million of debt.
The memorandum, which circulated earlier this week among
city officials, proposed granting the state's Department of
Community Affairs the authority to value all the city's assets
and sell, transfer or lease them to help the city meet its
If the city refused to go along, the state would withold
half of the city's transitional aid, the memo said.
"That was absolutely unacceptable to me, and to our council
president and city council," Mayor Don Guardian told Reuters in
a phone interview on Friday. "It basically is saying sell the
farm, and that's just not what we want to do."
Guardian's office has since discussed other forms of
agreements with Timothy Cunningham, director of the division
that sent the memo and would have taken over city assets.
Cunningham apologized and told Guardian that the memo was a
draft that should not have been sent out, Guardian said.
A spokeswoman for Cunningham's division referred questions
to New Jersey Govenror Chris Christie's office, which did not
reply to requests for comment.
The state memo included all assets but targeted specifically
the Atlantic City Municipal Utilities Authority, which provides
the city's drinking water, even though it is an independent
authority not owned by the city. It would have to first be
dissolved under statute before any sale or transfer could occur.
A move to dissolve the utility failed in the city council
earlier this year. The memo sparked anger in the union
representing water utility workers, who are planning a protest
Over the weekend, Guardian said the city and state could
strike an agreement that seeks to bring the water utility under
city control to then find ways to maximize its revenues.
Atlantic City's emergency manager, Kevin Lavin, appointed in
January by Christie, contemplated privatizing city assets in his
"We've never had the opportunity to be at the table in the
discussions," G. Bruce Ward, the water utility's executive
director, told Reuters. "We have been firmly committed to the
city to assist it in any way that we can."
(Reporting by Hilary Russ; Editing by Andrew Hay)