answering Mayor McCarthy on HCAs

mayorgarymccarthy2013bwWe’re pleased that the Schenectady Gazette Editorial Page allowed us to respond yesterday (Letter to the Editor,“Mayor missed point on casino package“, June 27, 2015, C5) to the Guest Column by Schenectady Mayor Gary McCarthy panning the Host Community Agreement notion. (see “Mayor: Schenectady casino deal better than Seneca host package“, June 12, 2015, C8, pdf. file) Due to space limitations, our Letter to the Editor was limited to 400 words. The longer 1st Draft follows. [Also see, “the Lago casino HCA and the Mayor”]

Lago Lessons the Mayor Missed

In Schenectady Mayor Gary McCarthy’s June 19th Gazette Guest Column, he answers critics who have asked why he never tried to negotiate a “host community agreement” [“HCA”] or similar benefits package with Rush Street Gaming [“Rush Street”]. (Schenectady Gazette, “Mayor: Schenectady casino deal better than Seneca host package“, June 12, 2015, C8, pdf. file) It is gaming industry practice, and common sense, for a potential host community to use its inherent leverage to bargain for impact mitigation funds, goodwill payments, revenue guarantees, or other concessions. But, Mayor McCarthy has chosen to be chief cheerleader and backroom muscle for Rush Street, rather than chief negotiator for the people of Schenectady.

We pointed the Mayor to the Lago-Tyre Host Community Agreement to rebut his excuse that such agreements were not feasible in New York State, not to recommend slavish adherence to its particular terms. Rather than learn from the Lago example, McCarthy made a two-pronged attack on the HCA: (1) Dismiss the messengers as foes of the casino with an “ironic” new cause, and (2) stress cherry-picked and unexplained numbers. It is, of course, not at all ironic that those who opposed the casino due to its expected negative effects are taking the Mayor to task for leaving millions of dollars on the table that could have been used to mitigate those impacts and improve Schenectady. Casino supporters also expect the Mayor to maximize casino revenues, jobs, and community benefits.

HCAs are not cookie-cutter affairs, but are tailored to each community’s situation. Comparing selected pairs of numbers from Seneca County and Schenectady proves little when our situations are so different. Schenectady has almost 70 times more residents than tiny Tyre, and Seneca County has less than a quarter of the population of our County, and far less development momentum. Unlike Schenectady, both Tyre and Seneca County did their homework: They learned what host communities have done elsewhere, they commissioned studies to understand the impact of a casino and to quantify its costs and benefits, and they actively and successfully negotiated with their casino applicant.

TyreLogoB&W As a result, Tyre and Seneca County believe they have negotiated very favorable terms with Lago. For example, an extensive study by the County Industrial Development Agency claims that the benefits from Lago for the County will be 51 times greater than its costs. Wilmorite is spending 40% more developing Lago ($425M) than Rush is at Mohawk Harbor. And, the property tax accord will bring in $3.83 million more over the next 20 years than the County would have otherwise expected.

For a detailed discussion of the Lago agreements, see tinyurl.com/InfoLago .

In contrast, the Mayor’s approach has earned Schenectady not one penny more than the law will demand from Rush Street once its Mohawk Harbor casino is in operation, and nothing prior to opening. Moreover, Schenectady has no reason to believe Galesi will freely give up its scandalously low PILOT payments, nor that Rush Street is likely to give up its practice of challenging tax assessments and seeking every available exemption. More important, with no pressure from the Mayor and no cost analysis undertaken by the City, Rush Street has never stepped up, as Lago did, to acknowledge both the reality of negative impacts and its obligation to mitigate them with payments in addition to the gaming revenue taxes it must pay.

Schenectady could have done much better. Rush Street has offered each of its other existing and proposed casino locations various payments and community benefits beyond what the law requires, including millions prior to opening, millions in guaranteed annual revenues, large ongoing community benefit and mitigation payments, local job and vendor preferences, and more. It even agreed to guarantee waterfront access and build a Green Roof in Philadelphia, and to give Brockton a guaranteed $10 million a year in benefits, along with its beautiful casino design.

To see how generous Rush Street has been outside Schenectady, and what Mayor McCarthy might have achieved, go to tinyurl.com/RushGiveaways .

David Giacalone

Editor, StopTheSchenectadyCasino.com

Schenectady, New York

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