ATLANTIC CITY - Cash-strapped Atlantic City thinks it has found a way to pay off debt while fighting off a threatened state takeover.

Mayor Don Guardian says the city's Municipal Utilities Authority will buy the city-owned former Bader Field airport property for about $100 million.

The city will use the money to pay down debt - a key demand from state officials who are threatening to take over the debt-laden resort.

It also will keep the much-coveted water utility out of state or private hands.

State officials did not immediately respond to a request for comment.

Atlantic City is nearing default on a $73 million emergency state loan, but says there is more than enough money to pay it off.