Appeals court upholds dismissal of suit by tunnel opponents

Wednesday, April 8, 1998 | 3:43 a.m.

A three-judge panel of the Appellate Division of Superior Court said the City of Atlantic City did nothing improper in giving a 150-acre parcel of land to Mirage Resorts Inc. for development as a 4,000-room casino hotel.

The city did so amid assurances from Mirage that the project would be built, thereby meeting the public policy goal of returning the land - the former site of a municipal dump - to the tax rolls, the judges said.

"From our perspective, it validates the steps taken by the city and Mirage," said Mirage lawyer Gilbert Brooks. "There were mutual benefits both ways."

The First Ward Civic Association, the Third Ward Civic Association, the Westside Protective Homeowners Association and seven individual residents sued after the city gave Mirage the parcel.

They claimed the land deal violated city statutes and the New Jersey Constitution and that the city had not obtained fair market value for the land.

The suit was dismissed in December by Superior Court Judge L. Anthony Gibson in Atlantic City. The opponents appealed.

Judges Thomas Shebell, William D'Annunzio and Ariel A. Rodriguez found that although the city did give the land away, it did so based on representations that Mirage would spend significant amounts of money in building on it.

The land was assessed at $118 million, but the city tried for years, without success, to attract developers for it.

As such, the Mirage deal did not constitute a "gift of public funds" as contemplated by the New Jersey Constitution, the judges said.

Even if the casino hotel never gets built, the land would revert to the city and could be sold or given away again, the judges said.

Besides, the razing of homes along Horace J. Bryant Jr. Drive to make way for a $330 million tunnel - sought by Mirage as a condition of its project - will result from the state's action in approving the tunnel, not the city's action in giving Mirage the land, the judges said.

Construction on the tunnel and on the Mirage casino is to begin this fall.

In a separate lawsuit, Bryant's daughter, Lillian Bryant, and others are suing to stop the tunnel.

That lawsuit contends construction of the tunnel would violate the residents' civil rights because it would destroy a stable black neighborhood.