June 30, 2017

New Jersey Has Shelled Out Over $6 Million For Atlantic City Oversight

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New Jersey’s Division of Law has spent $6.3 million with six consulting and law firms hired for projects related to Atlantic City’s oversight since March 2015, according to invoices released in response to a public records request.

The invoices are heavily redacted so it is hard to glean details of the lucrative advisory work, but they show that many more thousands of dollars have been spent on unspecified consulting and takeover-related litigation than on monetizing Atlantic City’s few remaining assets.

Just over half of that money was spent with Ernst & Young, which was hired in 2015 to analyze the city’s finances. The West Orange law firm Chiesa, Shahinian & Giantomasi, which was appointed by the state in November to run Atlantic City has charged $2.4 million for six months of work on everything from city council agendas to waste management and litigation, the documents show.

You can download a copy of the database compiled by Route 40, with links to each invoice, here. Proceeds from the database sale go to support our reporting costs. Route 40 Members receive the database for free – please email us for your copy.

Four other firms – Gibbons P.C., HJA Strategies, Phoenix Consulting Group, and Nassau Capital Advisers – have billed thousands of dollars for consulting and advising on debt issuance, budgeting and loan agreements, the documents obtained by Route 40 show.

The documents only relate to work done for the state Attorney General’s Division of Law, which is responsible for providing legal counsel to state departments and agencies. Many more thousands of dollars have been paid to outside consultants and lawyers by the Department of Community Affairs, which launched the takeover of Atlantic City last November.

Some of the biggest bills – a total of $413,386 – were for drafting the emergency loan agreement between the state and Atlantic City last year. The next biggest cost was related to litigation with the Atlantic City Firefighters, which began after the state sought to reduce pay, change work hours and cut jobs. That court battle has cost the state $373,101.22 to date. A similar battle with the Atlantic City Police Department has led to bills for $128, 054.88, the documents show.

On the other hand, the law firm run by former Senator Jeffrey Chiesa has charged relatively little for its work on Atlantic City’s Municipal Utilities Authority – just a little over $27,000, or 67 hours work at Chiesa’s $400-an-hour rate. That compares to about $206,000 charged for work related to “development/real estate”, according to the invoices. Chiesa, as the state-appointed overseer, is supposed to be looking for ways to help Atlantic City make money from its few remaining assets, including the MUA (water authority) and real estate such as the former airport Bader Field.

2 thoughts on “New Jersey Has Shelled Out Over $6 Million For Atlantic City Oversight

  1. A lot, I mean a whole lot, of money has been spent to “fix” Atlantic City. Are we fixed yet? If not, does anyone know how much more money will be spent until we are fixed? Is there an end in sight to all this fixing?

  2. The STATE continues to drain AC Finances and Tax Base by stealing 90+ Million in Luxury Room and Parking Tax at 100% the annual revenue share while failing to contribute 1 penny toward public safety in the State Tourism District!!! This is in addition to the over 850 lots the State holds tax free giving primo land deals to the politically connected.