New Jersey Governor Seeks to Roll Back State Control of Atlantic City

New Jersey Governor Phil Murphy (l.) announced he will seek to end the role of the city’s state designated financial controller Jeffrey Chiesa. The state currently controls Atlantic City’s finances through the state Division of Local Government Services. Chiesa and his law firm were appointed by former Governor Chris Christie to control the city’s finances as it faced possible bankruptcy in 2016. The move is part of a review by Murphy’s office to return the city to local control.

New Jersey Governor Phil Murphy is moving to end the designation of former state attorney general and U.S. Sen. Jeffrey Chiesa as controller of the city’s finances.

Murphy’s office said the move is part of a “review and recommendation process” that include reverting Atlantic City government functions back to the Department of Community Affairs and ending the designee’s role within 30 days, according to a press statement.

The state took control of the city’s finances under legislation passed in 2016. While Timothy Cunningham, the state Local Government Services director, was given governing powers over the city, he and the administration of former Governor Chris Christie appointed Chiesa as his designee in the role.

Cunningham will continue in his role as the primary point person for the administration said Lisa Ryan, spokeswoman for the state Department of Community Affairs—the division is within the DCA—and he will work with Atlantic City business administrator Jason Holt, Atlantic City state monitor Richard Richardella, and the DCA Commissioner’s Office, according to a report in the Press of Atlantic City.

“The Department is thankful for the efforts the Chiesa law firm has put forth to date in helping stabilize Atlantic City’s finances,” Ryan said in a statement. “We used the change in administration as an opportunity to take stock of the situation in Atlantic City and this is how we are choosing to move forward.”

Murphy appointed former U.S. Treasury undersecretary Jim Johnson in February as special counsel to review the state’s involvement in the city and to provide recommendations to return the city back to local control. Ending Chiesa’s role is part of the review and recommendation process, the press statement said.

“The economic revitalization of Atlantic City is critical to advancing our overall state economy,” Murphy said in the statement. “The actions we are taking today will ensure we are working in full partnership with the city to ensure economic growth and empowerment for all Atlantic City residents.”

The announcement also said that “business development efforts will be handled by state agencies,” and that some litigation matters would remain with Chiesa’s law firm, Chiesa Shahinian & Giantomasi PC, while others would be handled by the Attorney General’s office or outside counsel. The DCA will also work with other agencies such as the New Jersey Economic Development Authority to help promote economic development in the city, Ryan said.

Atlantic City Mayor Frank Gilliam “applauded” the move while City Council President Marty Small said in a statement that the announcement showed the administration’s confidence “in Atlantic City’s governing body.”

“We need to continue to work hard with the state on all business pertaining to the good people of Atlantic City,” Small’s statement said.

Chiesa’s time in control of the city’s finances was notable for several deals he made with city casinos to reduce tax appeal judgments against the resort and moves to rework union contracts with city workers.

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