In New York, four new casino resorts are set to begin operations from as early as next week amid criticism that previously agreed arrangements with local governments will see a trio of the properties benefiting from lucrative sales, mortgage and property-tax breaks.
According to a report from the Democrat And Chronicle newspaper, municipal leaders have defended the abatements as necessary to bring jobs and tax revenues to their areas while visitors lured by the new casinos are expected to spend more money locally and thus provide an economic boost for struggling parts of upstate New York.
“That’s the problem with a system where anybody who builds anything on a relatively large scale gets tax breaks because it’s just expected,” Kieran Michael Lalor, a Republican member of the New York State Assembly representing Dutchess County, told the newspaper “It just becomes part of the process where you put your hand out.”
However, the operators behind Tioga Downs Casino And Racetrack, Del Lago Resort And Casino and Montreign Resort Casino have defended the deals with local industrial development agencies as necessary in order to be successful and secure private financing while pointing out that slots will be taxed at 37% to 45% with gaming tables subject to a 10% duty.
“It was impossible to finance Tioga Downs [Casino And Racetrack],” Jeff Gural, the owner of the Tioga County facility, which is set to open with 942 slots and 44 gaming tables in early-December, told the Democrat And Chronicle. “It’s a miracle that it’s getting built at all.”
The newspaper reported that Tioga Downs Casino And Racetrack is set to invest $135 million into its property and plans to add 150 jobs while retaining 310 existing positions. In exchange, the local industrial development agency earlier approved nearly $6.2 million in sales and mortgage-recording tax exemptions for the project as well as a 20-year payment-in-lieu-of-taxes (PILOT) deal that could save the casino nearly $17.7 million.
The Democrat And Chronicle explained that the arrangement will see Tioga Downs Casino And Racetrack moreover contribute almost $39 million in taxes over the next 20 years, starting with $790,000 in 2016 and growing to $3.4 million by 2036. January is also expected to see local authorities consider a $144,000 sales tax break for the property’s $3.3 million plan to improve the nearby Tioga Country Club, which could amount to savings of $2.6 million over the next 20 years.
LeeAnn Tinney from Tioga County’s economic development office told the newspaper that the breaks pale in comparison with the benefits the expanded casino will bring to the region.
“It far outweighs, we believe and the community clearly believes, in what they might give up in real property tax or sales tax to have them located here,” said Tinney.
For his part, Gural proclaimed that he had to put around $85 million of his own money into the new Tioga Downs Casino And Racetrack and the tax breaks were necessary to finance the project.
“Every little bit helps,” Gural told the Democrat And Chronicle. “Instead of arguing with what the taxes should be, you agree on a number and phase it in.”
Regarding the Del Lago Resort And Casino, the $425 million development has agreed a PILOT arrangement that will see it pay $45.3 million over the next 20 years although this deal has been back-dated, which means the project will end up contributing nearly $4 million more than it would have done without the agreement. In exchange, it will hand over less than $1 million in property taxes for each of its first three years before this amount grows to $2.8 million in 2036.
Owned by Rochester-area developer Thomas Wilmot and expected to open in February with 1,950 slots and 84 gaming tables, the Del Lago Resort And Casino has moreover agreed to pay $10.5 million to the city of Tyre over the next 20 years for additional local services such as extra fire fighters and police. In return, the project is getting $16 million in state and local tax breaks for construction as well as nearly $3.4 million in mortgage-tax exemptions.
“The Del Lago Resort And Casino entered into a 20-year agreement that provides tax certainty for Seneca County and the Del Lago [Resort And Casino] and, importantly, delivers significant tax relief for the people of Tyre and Seneca County,” spokesperson Steven Greenberg told the newspaper.
For the Montreign Resort Casino in Sullivan County, which is expected to feature 2,150 slots as well as 102 gaming tables from early next year, a nearly $143 million break on sales and mortgage taxes is foreseen including $127 million for its 16-year PILOT deal. The tax package, however, has been updated meaning that the value of the property is to increase from $12 million to at least $53.5 million although this is not set to be factored in until after eight years before slowly reaching its full rate in 2034.
William Rieber, Supervisor for the city of Thompson, explained that the Montreigh Resort Casino has also agreed to pick up costs associated with new roads and infrastructure in and around the development.
“It’s going to increase our tax base close to 5%,” Rieber told the Democrat And Chronicle.
The newspaper reported that only The Rivers Casino And Resort At Mohawk Harbor, which is set to open in early-February offering 1,150 slots as well as 77 gaming tables, has not secured local tax subsidies.
“We were very grateful to be selected for one of the four casinos in New York state,” Ray Gillen, Chairman for the Schenectady County Metroplex Development Authority, told the Democrat And Chronicle. “But, the way we competed for this from day one was that there would be no incentives as part of the project. We thought it was important to compete fair and square.”