Rivers Casino hits a new low for revenues

 

 Schenectady’s Rivers Casino’s 12th week in operation generated its worst revenues figures so far: GRR $2,237,542. That was 11.6% lower than its prior worst week, which ended April 16. Slots dollars were the lowest yet. And, last week’s poker dollars were down from the prior week:

Despite revenues going down for the 8th time in 10 weeks, Rivers Casino’s Schenectady General Manager, Mary Cheeks, had this conversation with TU food columnist Steve Barnes:

 Q: How has Rivers performed in its first three months, and how does that compare to company projections?

A: I have no complaints. We’re still in ramp-up mode, so I’m fine with what we’re achieving so far, and we’re making changes as warranted.

Also:

Q: What do your demographics show about where Rivers patrons are coming from?

A: Primarily from the Capital Region, but surprisingly enough to me, as someone who’s been in this business for 27-plus years, is the large amount we have coming from beyond 120 miles. Since the casino’s hotel isn’t open yet, we’re assuming most of them are day-trippers, not lodgers.

Q: The casino operates 24 hours a day. Is there really enough business to warrant that?

A: Yes.

Q: For example, on average, how many patrons are on the gambling floor at 3 a.m. on a Monday or Tuesday?

A: I’d have to guess at least 300, but it’s not just for gambling. [restaurants and lounge also open]

  • Personal Note: Why am I not a journalist? I do not have the poker face to deal with statistics-free generalities or half-answers, much less the unanswered questions.

Also, have you wondered about the size of payouts at Rivers Casino Mohawk Harbor:

Q: What is the biggest largest payout at Rivers so far?

A.  It was $47,000 on a slot machine.

Q: What was the biggest at the Philadelphia and Pittsburgh casinos in the 5 years that you handled both of them?

A. In Pittsburgh, $150,000, ad $100,000 in Philadelphia.

Poker strategy stumbles along the Mohawk (with updates)

 . . Rivers Casino Poker Room

 Despite good media coverage and optimism for River Casino’s roll-out of daily Poker Tournaments last week (see Times Union & Gazette), Schenectady’s Mohawk Harbor Casino posted record-low weekly revenue numbers for the second week in a row, with generated dollars down for the 7th time in 8 weeks. Total GGR for the week ending April 16, 2017 was merely $2,532,004, down  5.2% from the prior week’s nadir. Indeed, its Poker Table GRR during its first week of daily tournaments went down 12.9% from the prior week. And, slots GRR tumbled another 9.7%. Meanwhile, Capital Region competitor, Saratoga Casino and Hotel saw a 6.0% drop from its prior week’s Net Win numbers.

  •  For more information and discussion about revenues at the Mohawk Harbor Casino, see our posting on April 7, 2017, which has relevant charts and links; short URL: http://tinyurl.com/RiversDown . (Image at head of this blurb is  detail from C. M. Coolidge’s “A Friend in Need”.)

update (April 22, 2017, 12 AM): See “Income falls at Rivers, Saratoga: Gross revenues from gaming off more than 5% in week’s stretch” (Times Union, by Eric Anderson, April 22, 2017), which noted:

For Rivers, it’s the lowest weekly revenue figure since its opening in early February, and it came despite a series of poker tournaments during the week.

The poker room has been popular among casino customers, officials have said.

Observers have suggested that extensive roadwork on Erie Boulevard outside the casino may have played a part in the decline. . . .

The casinos haven’t released attendance figures, so it’s not clear how the restaurant and other food outlets have performed.

follow-up (April 28, 2017): Finally some good news for Rivers Casino Schenectady and those counting on its revenue stream. For the week ending April 23, 2017, GGR were $2,866,673, up 11.6% from last week’s lowest-ever figures. See the Official Weekly Report. A screen shot of the April numbers is immediately below this blurb. The Net Win figures up the road at Saratoga Casino were up 3.9%.

RiversRevs28Apr2017

revenues last week worst yet at Rivers Casino in Schenectady

 Rivers Casino’s 9th week of operation generated its worst week of revenues yet at Mohawk Harbor in Schenectady.  Revenues were down for the 6th time in 7 weeks, registering at $2,669,892, a reduction of 7.86% from the prior week’s dismal numbers. Its closest geographic competitor, Saratoga Casino & Hotel, saw a much smaller reduction last week of 1.5%. Here is a composite of the reported numbers on the Racing Commission site:

RiversRevsTo09Apr2017

For more information and discussion about revenues at the Mohawk Harbor Casino, see our posting on April 7, 2017, which has relevant charts and links; short URL: http://tinyurl.com/RiversDown .

print “His Station” by Coolidge

 The Schenectady Casino started daily poker tournaments last Monday, April 10, 2017, in the hope of increasing revenues. [see Gazette coverage, and Times Union coverage of the poker strategy] Those results will not be public until next Friday, April 21, 2017.

A shorter URL to use to share this posting is http://tinyurl.com/RiversRevsDown .

. . for discussion of projected revenues, check out what do those Casino revenue figures mean? (

record decline at Rivers Casino Schenectady

 

For the fifth time in six weeks, week-to-week net revenues at Rivers Casino in Schenectady declined last week. [see the composite Report to the right; and the Official Weekly Report.] The 19.8% fall in revenues, down to $2,897,721, was the largest to date at the Casino, which opened February 8. While Rivers Schenectady saw a significant decline, revenues at nearby Saratoga Casino edged up 1.8% to a Net Win of $2,858,905. (Compare the figures reported March 31, 2017 by the Times Union’s Eric Anderson, here; and click here for our prior revenue coverage)

  •  Rivers also reported its Revenue Tax distributions for February 2017, showing that Schenectady County and the City of Schenectady each received $191,991 as their home community share of revenues paid to the State. The average daily GRR for the opening weeks in February were, however, significantly higher than the daily average since then. Nonetheless, the payment of $191,991 for the 22-day partial month of February would result in an annualized total of $3,185,305. When selling the Schenectady Casino to the Racing Commission and the public, Rush Street (and Mayor Gary McCarthy) projected payment of $4.1 million each (22% more) to the City and the County once revenues stabilized.

. . share this post with this short URLhttp://tinyurl.com/RiversDown

update (Saturday, April 8, 2017): The Schenectady Gazette covered revenue and tax distribution for February and march in an article in today’s paper, “Rivers Casino revenues up in March, still behind projectionsFigures from first full month of operation reported” (Brett Samuels, April 8, 2017). As I wrote in a Comment left at the online webpage for the story (which also suggests other issues needing coverage):

deskdudeThe real news is not that — OMG!! — revenues for a 31-day month were higher than for a 20-day month, but that revenues have been down five of the past six weeks. In fact, the decline last week was 19.8%, while Saratoga Casino had about a 2% increase.

The Gazette article does give a nice summary of the projection shortfall issue (while also suggesting reasons revenues might rise as the year progresses):

If the current pace of just over $200,000 per month continues, the city and county would take in about $2.3 million for 2017, falling well short of Rush Street Gaming’s projections submitted in its 2014 application with the Gaming Commission. . .

That economic impact analysis, which included five-year projections for gaming revenues, estimated the low-end gaming revenue for the city and county would be about $3.3 million each for the city and county.

In preparing its 2017 budget, Schenectady County used the low-end revenue estimate, $3.3 million, and pro-rated it to a March opening. That would leave the county expecting about $2.75 million in casino revenue this year.

Rivers revenues down 4th straight week (with updates)

 Schenectady’s Rivers Casino at Mohawk Harbor faced its first major snow storm last week. The storm virtually closed the City down on Tuesday, March 14, but roads were serviceable the next day, with the nearby Stockade neighborhood (especially Front Street, which borders the casino complex) enjoying its quickest snow removal experience in memory. It is no surprise that Gross Gaming Revenues at Rivers Schenectady declined from the prior week’s record low figures, making it four straight weeks of falling GGR. In fact, the 1% reduction was less severe than I had expected, with $2,757,738 generated. The image at the head of this paragraph shows the weekly totals since Rivers opened in Schenectady on February 8.

The distribution of the revenues looks interesting to this non-expert observer:

  • slots revenues were down 17.6%, falling to $1,571,972
  • table game revenues were up 44.6%, soaring to $1,060,418

Did grandma decide to stay home, while the high-rollers were snowed in at Mohawk Harbor overnight the day of the storm?

. . you can find the weekly Rivers Casino revenue stats, usually refreshed on Friday morning, here: http://tinyurl.com/RiversSchdyRevs

. . see what do those Casino revenue figures mean? (

newspaper update (Monday, March 27, 2017): As of 1 PM today, the Gazette continues to avoid mentioning this streak of weekly revenue declines. Thankfully, the Times Union did report the revenue picture today, in “Area casinos had another down week” (by Eric Anderson, online on March 27, 2017). The TU notes that Saratoga Casino saw its third weekly decline, and “Rivers reported its fourth consecutive weekly decline”, noting “The most recent figures likely were depressed by a massive snowstorm that struck the Capital Region March 14.” TU also explained that even Rivers Casino’s best week so far does not meet the weekly average it would need to make their “stabilized” 2019 revenues projection. 

  • RiversSchdyRevs31Mar2017 update (March 31, 2017): For the week ending March 26, 2017, Schenectady’s Rivers Casino had its first increase in revenues in over a month. The total GRR, $3,613, 222, was the best take for the Casino since its first full week, with a 31% increase over the prior week’s dismal GRR, which was the Casino’s lowest ever. As you can see from the composite below of the Rivers Casino Total Gross Gaming Revenues Report, there were significant increases in slots (16%) and table games (57%!), with poker revenues up almost 9%.

RiversCasinoRevs31Mar2017

As expected, the Schenectady Gazette never reported that Rivers Casino had four straight weeks of GRR decline, but I’m betting this increase will be up soon at their website and in Saturday’s hardcopy newspaper.


LadyBug14Mar2017 p.s.
“Walkable Schenectady”?  Our Mayor likes to brag about our “walkable City”, as do the gents at Metroplex. A week after the mid-March snow storm ended, many crosswalks in downtown Schenectady were clogged at the curb with snow, and many sidewalks in downtown Schenectady were left unshoveled. The snow had stopped Wednesday morning, but on Saturday evening, March 18, I made the mistake of trying to walk from my Stockade home up Front Street, to Mohawk Harbor and then up Erie Blvd. I spent a lot of time precariously switching from sidewalk to street.

 Front St. at N. Church. . DSCF2601

I was particularly surprised at how difficult it was to be on foot near the Casino.

DSCF2589 . . [L] this is what confronted you on foot at the intersection of Front Street and Rush Street, if you wanted to head toward Erie Boulevard.

DSCF2595 . . DSCF2597 . . Once at the rotary at Rush St. and Erie Blvd., you had some snow climbing to do to get to the Nott St. side of the rotary, with an unshovelled sidewalk once across the street.

DSCF2599-001 . . [L] Most daunting was trying to head south on Erie Boulevard on foot. Once past the overhead walkway, virtually all of the sidewalk had the full 19 inches of snow, all the way to Stewart’s, at Green Street. If a business had shoveled at its driveway, the curb at the intersection and crosswalk was piled even higher. I was left to walking at sunset on the side of a very busy road, with fast traffic and lots of puddles. Not pedestrian-friendly, Mr. Mayor. Not a good introduction to visitors on the ease of getting from Mohawk Harbor to our much-touted downtown Renaissance.

another big drop in Casino revenues

 The numbers are out for the fourth full week (ending March 12, 2017) of revenues generated at Rivers Casino at Mohawk Harbor in Schenectady: just under $2.8 million; the worst week yet; and no snow storm to blame.

  • a 21% drop from the first full week
  • 9.9% less than last week’s numbers, which were down 11% from the prior week, and were never reported by the Gazette

  • The weekly average needs to be $4.3M to reach the $223 million annual gaming revenue number so often repeated by Mayor McCarthy, which is the projection for the “stabilized” 2019. So far, the four full weeks have averaged about $3.2 million, which won’t even generate the significantly lower first-year projections of the Casino and County.

  • Today’s Gazette tells us there are changes coming to Rivers Casino due to patron requests and frustrations. Changes in works at Rivers Casino, including poker tournaments: Some customers have expressed frustration”, by Brett Samuels, March 17, 2017). It would have been a nice place to mention the slide in revenues, rather than: “[I]t has continued to net at least $3 million per week in gaming revenue and pulled in $10.8 million in its first month from slots and table games after payouts.”

On St. Patrick’s day, we must ask our good boyo Mayor Gary McCarthy if anyone but leprechauns believes in magic pots of gold?

 . . from Hallmark

10 P.M. Update: The Times Union has covered the newest revenue figures, in the online article “Revenues drop again at Rivers Casino in Schenectady” (Eric Anderson, March 17, 2017). The piece gives some context for the numbers:

So far, the casino hasn’t reached the $4.28 million weekly average figure that was projected in an economic impact study by New Orleans-based The Innovation Group.

But that figure was for 2019, and by then the casino hotel should be open and construction at the neighboring Mohawk Harbors completed.

It’s also not clear whether bus tours to the casino have yet started. That also can be a lucrative source of revenues.

. . find the weekly Rivers Casino revenue stats here: http://tinyurl.com/RiversSchdyRevs

. . and, see our post: “what do those Casino revenue figures mean” (March 5, 2017)

what do those Casino revenue figures mean?

OPEN LETTER to the SCHENECTADY GAZETTE and Other Capital Region Media

. . and see March 10 update below . .

. . and “another big drop in Casino revenues” (March 17, 2017)

Dear Schenectady Gazette and Local Media editors and reporters:

ch6casinorev We need some context, please, when you give us weekly (and soon, monthly) numbers about the gaming revenue generated at Rivers Casino at Mohawk Harbor. [E.g., Gazette, TU, WRGB-Ch6News] Gaming revenue numbers are virtually meaningless without background information, such as typical patterns for casino opening revenues, and this Casino’s own projections for annual revenues. This is especially true because Rush Street Gaming will be paying its gaming taxes based totally on the net gaming revenue figures. That is unlike other casinos where minimum annual local contributions have been promised (including Rivers Casino in Pittsburgh, which has consistently fallen short of its projections, and used the shortfall as a reason to request reduced real estate assessment).

  •  images-7Reportage on the second week’s Casino revenue is a prime example of numbers without context. Neither the Casino’s projected revenue nor industry expectations or patterns in the opening weeks of a casino were mentioned. Moreover, the Gazette headline touted, “Report: Rivers Casino sees revenue boost” (Feb. 27, 2017), with the article stating that there was a 24% increase in gross gaming revenue ($33.8 million) and a 16% boost in net revenue ($3.5 million) for the first full week of operation. While it mentioned the snowstorm in Schenectady during the first week, there was no indication of how many days were counted in the first week’s numbers, which included a “soft” by-invitation opening day before the official opening. Nor was there any discussion of the significance of a 16% increase for a full 7-day week, which has 14.28% more days than a 6-day week, and 29.5% more days than a 5-day week. Instead, a prepared statement by casino officials is quoted: “We are pleased with the performance of Rivers Casino & Resort Schenectady during our first full week of operation.”

The Gazette and Mayor Gary McCarthy have consistently used the number of $223 million dollars in annual net gaming revenues for the Schenectady Casino, with a resulting payment of $4.1 million annually each to the City and to the County. $223 million is, on average over a 52-week year, about $4.3 million per week. So far, Rivers Casino Schenectady has posted net gaming revenue of of $3.55M and $3.47M for its first two full weeks of operation, after an opening short week of $3M. 

abacusThe average revenues for Rivers Casino’s first two full weeks, $3.51M, would result in annual net gaming revenues of $183M dollars upon which to calculate its State gaming tax bill. That is 18% lower than the $223M projection, and would mean a significant shortfall for local tax coffers.

 How well do casinos usually do during their opening weeks? I’ve been hoping the Gazette would tell us.


sleuth Last night, I spent about 30 minutes Googling casino opening revenues, and looking at the first two examples that came up, I discovered that the new mega-casino project MGM National Harbor, located on the Potomac River in the D.C. suburbs of Maryland, generated about $49M in gaming revenues in its first month (January 2017). Maryland’s racing commission hired two consultants to project annual revenues for National Harbor. One predicted $512M and the other predicted $575M. Annualized, National Harbor’s first month revenues are about $576 million dollars, which is on track to meet even the higher projection.

plungegraphsmY

trends?

 Similarly, in July 2015, Plainridge Park Casino near Boston generated $18.1 million in its first month of operation. Plainridge predicted an annual gaming revenue of $200 million. Annualized, $18.1M would total $217.2M, a nice 8% increase over the $200M projection. (see MassLive, Aug. 15, 2015) Note, however, that early success does not necessarily mean a casino will continue to generate comparable numbers.  Plainridge Park fell far short of its projections for the entire year.

 Shouldn’t the Gazette help its readers (and our Pollyanna-like political and business leaders) understand how Rivers Casino is doing compared to its projections, and historic revenue numbers for similar casinos? If Schenectady’s “Newspaper of Record” does not do that, I hope other media members less attached to Rivers Casino (and City Hall, Galesi Group, and Metroplex) will do some investigation, or at least basic research.

 In contrast to the Gazette Tilt we have pointed out frequently at this website (recently, as to likely incidents of crime), the Albany Times Union has taken the lead over the past couple of years on many topics relating to the casino and Mohawk Harbor, Schenectady’s City Hall, PILOTS, etc. I hope it will continue to play that journalistic role, and perhaps spark some responsible journalism and competitive motivation from the Gazette and other media outlets.

. . share this post with this short URLhttp://tinyurl.com/CasinoOpenRevs

  • P.S. What about attendance numbers? How is Rivers Casino doing compared to its projection of 7500 weekday and 10,000 weekend visitors? In July 2014, the TU editorial board was a bit skeptical of those numbers. Follow-up would be nice, as patterns emerge with more moderate weather.

newspaper update (March 10, 2017): This evening, the Gazette posted an article online titled “How Rivers Casino’s 1st month revenues compare to projections“, by Brett Samuels, with a comparison of Rivers Casino’s February revenues and tax payments, covering 20 days, with its first-year projections.  After noting that “the city of Schenectady and Schenectady county received $191,991 each,” for the first twenty days, the article points out that:

“[I]f the city and county each received $275,000 per month in gaming revenue for the next 10 months, it would total about $2.9 million in gaming revenue each for all of 2017, falling short of the casino’s own initial projections.”

. . . “In preparing its 2017 budget, Schenectady County used the low-end revenue estimate, $3.3 million, and pro-rated it to a March opening. That would leave the county expecting about $2.75 million in casino revenue this year.”

The article also points out that “There are a few factors still at play that could influence casino revenues the rest of the year,” and says that the opening of the casino’s luxury hotel, and completion of luxury apartments, and office and retail space this summer will draw more people to the site. [We continue to wonder just who wants a luxury apartment abutting a homely and hectic casino site.]

Here is a screenshot we put together from the Rivers Casino revenues document at the NYS Racing Commission, showing its revenues through its third full week,ending March 5, 2017. Its third full week showed a 10%+  net gaming revenue decline.

RiversCasino05Mar2017Revs

  • Late each Friday afternoon, you should be able to see the latest figures from the prior week, on the Racing Commission site, at this link: http://tinyurl.com/RiversSchdyRevs.

plungegraphsm follow-up (March 12, 2017, 3 PM): As of this point in time, the Gazette has not reported the significant drop in gambling revenue at Rivers Casino in its third full week of operation, which is mentioned immediately above and shown in the screenshot. The Gazette did report on the weekly revenue reports to the Racing Commission each of the past three weeks. Friday evening at about 8 PM, the Times Union posted the numbers, in a brief staff report headlined “Double-digit revenue decline at casino, racino” (March 10, 2017), saying “Rivers gross gaming revenue fell nearly 11 percent to $3,094,804 in the week ending March 5 from $3,472,354 a week earlier. At Saratoga, the net win fell nearly 14 percent to $2,845,411 in the week ending March 4 from $3,302,242 the week before.”

the Lago casino HCA and the Mayor

GMcCarthyMug In his June 19th Guest Column in the Schenectady Gazette, Schenectady Mayor Gary McCarthy attempts to answer 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”]. (Guest Column, “Mayor: Schenectady casino deal better than Seneca host package“, June 12, 2015, C8, pdf. file) The issue was first raised at this website in late April, in the posting “Mayor McCarthy left millions on the casino table“, with follow-up postings on May 18th, “Money on the Table, Part 2“, and May 27th, “Rush Street’s Giveaways“. Schenectady resident and business owner Mohamed Hafez, asked the Mayor directly about host community agreements at a City Council meeting on May 11th, and at subsequent meetings.

. . share this posting with this short URL: http://tinyurl.com/LagoPayments

 Mayor McCarthy replied to Mr. Hafez that such agreements are not required here, as they are in Massachusetts, and are not feasible in New York, because gaming tax revenues are paid directly to the State which redistributes a portion to the Host County and City.  That attempt by the Mayor to excuse his failure to seek a community benefits package from Schenectady’s casino applicant led both this website and Mr. Hafez to refer the Mayor to the Host Community Agreement [“HCA”] signed last year by the Town of Tyre with Wilmorite, the developer of the Lago Resort and Casino, in the Fingerlakes County of Seneca New York (which is described in detail at the bottom of this posting).  On June 5, 2015, the Gazette published a Guest Column by Mr. Hafez explaining the need for a host community agreement in Schenectady, and describing aspects of the Lago HCA. “Schenectady in need of host deal for casino” (reprinted here). That column led the Mayor to ask the Gazette for an opportunity to reply. [To see David Giacalone’s Letter to the Gazette Editor in response to Mayor McCarthy, click this link: “Mayor missed point on casino package“, June 27, 2015, C5.]

Mayor McCarthy wrote in the resulting Gazette Guest Column that the casino deal Schenectady has with Rush Street Gaming is superior to the Lago-Tyre Host Community Agreement. The Mayor compares select figures from the Lago HCA and the Tax Accord between Lago and the Seneca County Industrial Development Agency (IDA) and declares the “Schenectady deal” (there is no agreement) to be better. That is apparently because Lago received tax incentives/abatements not granted by Schenectady or Schenectady County to Rush Street, and the projected annual share of gaming tax revenue for the City of Schenectady, $4.1 million, is larger than the estimate of $3.9 million for Tyre/Lago.

TyreLogo Comparing individual, selected pairs of numbers from Seneca County and Schenectady proves little when Schenectady, with a population of 66,000, has nearly 70 times more residents than Tyre, and Seneca County, at 35,000 residents, has less than a quarter of the population of our County. The important point is that both the Town and the County IDA decided to do their homework (i.e., learn what potential host communities have done elsewhere and what the Town’s legal rights are, while commissioning a study to identify likely impacts, and quantify costs and benefits), and then to actively negotiate with their suitors. As a result, they each believe they have negotiated very favorable terms with Lago.

For example, Wilmorite is investing $425M at Tyre (40% more than Rush’s plans at Mohawk Harbor); the jobs it brings will cut the County’s unemployment rate significantly more than similar numbers of employees could do here; and the sales taxes generated due to Lago’s construction and operation will be significantly more than the annual sales tax abatement it has been offered. Seneca County will also receive payments during the period of its IDA accord with Lago that will offset the mortgage tax abatement granted to Wilmorite.

ida-lago-cost-benefit-analysis-table11 The IDA’s Lago Cost/Benefit Analysis concluded that the benefits from Lago for the County will be 51 times greater than its costs (including tax abatements), without counting the enormous benefits of the largest construction project in the County’s history. [summary chart at left; click on image to enlarge] And, Tyre, by the way, is expecting about $4000 in annual gaming revenues per resident, whereas Schenectady’s share of gaming revenues will be about $62 per resident. Moreover, the millions in extra mitigation payments by Lago that are scoffed at by Mayor McCarthy will be about $500 per Tyre resident per year, while Schenectady won’t be getting one cent.

According to the Seneca County IDA (Q & A on the Lago Resort & Casino Tax Accord, Feb. 12, 2015; empasis added):

A study commissioned by the IDA estimates the project will have a $1.8 billion economic impact in Seneca County. The project would also generate $45.3 million in payments to Seneca County; the Waterloo Central School District; infrastructure improvements; and more over 20 years.

As part of the proposed agreement, Seneca County would receive $3.83 million more than it would have expected to receive thanks to efforts by the joint IDA and County project advisory committee. This level of payment would exceed the level that would be projected to be paid under the already available New York State statutory 485-b property tax exemption program that this project would qualify for. For nearly 40 years, New York State has offered this 50 percent property tax exemption to businesses that invest $10,000 or more per year on building enhancements.

All of this is in addition to the Host Community Agreement with the Town of Tyre that will generate a projected $10.5 million in payments over 20 years to provide additional services such as fire, ambulance, and sheriff.

This said, Wilmorite has applied for a tax agreement covering sales, mortgage and property taxes. These include $16 million in New York State, regional and local sales tax exemptions, and $3.35 million in New York State and Seneca County mortgage tax exemptions.

As part of the accord, the developer has committed to purchasing construction materials and supplies from Seneca County vendors whenever possible, offsetting the local sales tax exemption.

In addition, as part of the accord, Seneca County would receive payments in future years, offsetting the mortgage tax exemption.

. . . .

For the reader’s convenience, we are repeating below our lengthy discussion, from the earlier posting “Money on the Table, Part 2“, of the Host Community Agreement between the Lago Casino and the Town of Tyre.

.

 Lago at Tyre. More telling than Albany’s efforts to obtain a community host agreement is what happened with the Lago Casino & Resort in the Town of Tyre, a tiny agricultural community in Seneca County, NY, which was the eventual “winner” in the Finger Lakes Region. Although Tyre has a population below one thousand, its leaders had a thoughtful and thorough response when they learned that the Wilmorite Corp. [also known as Wilmot] wanted to put a casino on a parcel within the Town. Beyond getting itself good legal advice and keeping its residents fully informed and involved, the Town commissioned the study “Impacts of Wilmot Casino on the Primary Impact Area: Emphasis on Socioeconomic & Public Safety” (June 2014, 44-pages), which was prepared by the Center for  Governmental Research, in Rochester, NY. Tyre also requested Cornell University to review and summarize a compilation of Canadian studies on the impact of casinos, especially problem gambling.

The well-informed leaders of the Town of Tyre Board of Supervisors were, therefore, prepared to negotiate a Host Community Agreement [“Tyre HCA”, June 2014, ] with the Applicant. (The HCA notes on its title page that the Agreement constitutes a “Community Mitigation Plan, as Contemplated by the Upstate New York Gaming Economic Development Act of 2013.”) The lengthy list of responsibilities accepted and covenants made by Wilmorite, the Tyre-Lago Applicant, is a testament to the thoroughness of preparation of the parties, and also to the strong desire of Wilmorite to secure the approval of the Town Board and be a good neighbor if it were selected for the Finger Lakes Region gaming license.  (For a good summary of the terms of the Tyre HCA, see “Details of casino host community agreement unveiled“, Finger Lakes Times, by David L. Shaw, June 13, 2014.)

 The Lago Casino owner-devloper agreed that, among other things, it would:

• Pay all costs and expenses incurred by the town for attorneys, accountants, engineers, consultants and others in connection with the casino review process.

• Pay the town $100,000 annually from 2016-21 for the purchase of development rights or other action related to the preservation of agricultural land in the town, to mitigate the loss of farmland.

• Preserve the graves in six known burial sites on the land.

• Pay for the training of a security force acceptable to the Seneca County Sheriff’s Office; for special training of deputies, as needed; and up to $100,000 a year for the anticipated hiring of an additional deputy because of the casino.

• Pay the cost of a new high-rise firefighting equipment for six Magee Fire Department firefighters and will pay the cost of a ladder truck for the department.

• Pay for any medical training required by North Seneca Ambulance personnel who respond to the casino for emergencies. If North Seneca handles a casino patient whose insurance does not cover the entire cost, the company will make up the difference.

• To fulfill a previous agreement with Seneca County Mental Health Department, pay for hiring one additional problem gambling treatment and one additional problem gambling prevention specialist. [Note: the protocol for setting up a Problem Gambling Prevention, Outreach and Education Program looks like a good place for Schenectady County to start to construct its own program.]

• Pay all on-site employees wages no less than 75 percent of the national average for each occupation.

•  To mitigate impacts on town services, pay the town $750,000 in 2015, $2 million on Jan. 15, 2016 (prior to operation), and $2 million on Jan. 15, 2017. For 2018 and beyond, the impact fee will be at least $2 million and be adjusted by formula. Once it begins operation, the Casino will receive credit for Gaming Tax Revenues received by the Town. That is, the Casino must make a prepayment of the annual minimum Impact Fee each January 15, with the Town refunding to the Casino the amount that it receives as Gaming Tax Revenues each year.

• Construct, install, operate and maintain, a six-inch private-force sanitary sewer main from the casino to the existing Petro orRoute 414 pump station.  And, construct and install a new water-line connection to the existing 12-inch water line located on the east side of Route 414, and work to create or extend a water district that includes the casino site. [Note: as anticipated by the Location Board’s application form, the Schenectady casino applicant has stated it will make analogous necessary utility improvements.]

• Design a telecommunications infrastructure for the casino, with at least one strand of fiber-optic cable dedicated to the town and its residents.

  • Implement, at its sole cost and expense, all actions described in the Engineer’s Report prepared for the SEQRA review, and perform all other traffic improvements recommended or required by the New York State Department of Transportation. [Lago estimates that the traffic mitigation measures will cost $4,152,500.]

• Apply to the Seneca County Industrial Development Agency for a payment-in-lieu-of-taxes on property and other taxes. [In the resulting accord with the County IDA, Lago agreed to pay $45.3 million over a 20-year period. That amount, according to the Agency’s estimates, is $3.83 million more than Lago Resort would pay if the project were fully taxed under the New York State statutory 485-b exemptions (which have long been available to businesses that invest $10,000 or more per year on building enhancements). See IDA Press Release, Feb. 12, 2015.]

  • Recognize the right of property owners near the Project to continue farming consistent with past practice using good agricultural practices.
  • Limit its lodging facilities to no more than 220 rooms, unless the Company provides the Town with independent forecasts that demand exists in the area for additional rooms, in order to limit the impact on other lodging establishments in the region, during the first ten years after gaming operations open to the public.

• Take out a $4 million mortgage on the project to secure the company’s obligations to the Town and County. The town will be given first priority lien on the mortgage.

  • Engage in Periodic Review and good-faith negotiation to deal with additional payments for unanticipated or miscalculated impacts, up to $1 million per year.

In accepting the Tyre HCA, the Lago Casino developer acknowledged that construction and operation of Lago would have both direct and indirect impacts on the community. Unlike the Mohawk Harbor Applicants in Schenectady, who denied or trivialized any impact on Schenectady or nearby communities, Wilmorite signed an Agreement stating:

Direct Impacts. The Company acknowledges that the construction and operation of the Project will cause direct impacts on the Town and its residents, including but not limited to impacts on Town infrastructure, environment, public safety, emergency services, social and other impacts (“Direct Impacts”). The Company shall mitigate the Direct Impacts in the manner described in this Article III.

. . . [And]  Indirect Impacts. (a) The Company acknowledges that, in addition to the Direct Impacts described above, the Project will also have known and unknown indirect impacts on the Town and its residents, related to or indirectly resulting from the construction and operation of the Project from time to time (“Indirect Impacts”). Indirect Impacts include, but are not limited to:

(1) increased use of Town services;

(2) increased use of Town infrastructure;

(3) the need for additional Town infrastructure, facilities, equipment and employees;

(4) increased traffic and traffic congestion;

(5) issues related to public health, safety, welfare and addictive behavior;

(6) issues relating to quality of life; and

7) costs related to mitigating other indirect impacts to the Town and its residents.

Schenectady’s City Hall never demanded a benefits or mitigation agreement with Rush Street and Galesi.  Indeed, the Mayor and his Administration, Metroplex, County officials, the Chamber of Commerce, and hopeful casino vendors, have never admitted to any likely negative effects. As a consequence, the City never did or commissioned any independent research or investigation that could be used to rebut the glib and facetious claims of the Schenectady Applicant that its casino would have no significant added costs or negative impact on the City, nearby neighborhoods or towns, or the County. This lack of vital information caused the only non-Democrat on City Council, Vince Riggi, to refuse to vote in favor of the proposed casino.

Mayor McCarthy left millions on the casino table

Hisstationand4aces-coolidge

.. . . . . . . . . . . . . . . . . . . . . *_/

  At Schenectady City Council meetings, Mayor Gary McCarthy is pretty good at maintaining his poker face, while raking and calling in political chips. But, it’s apparently a different story when the Mayor sits down to gamble on our City’s future with the Casino Gang from Mohawk Harbor (Rush Street Gaming and the Galesi Group).  Despite holding numerous trump cards, the McCarthy Administration has left a lot of casino cash, public benefits, and basic zoning protections on the table, to the future enrichment and probable amusement of the savvy businessmen who are planning to make millions of dollars at the Old ALCO site.

*/ above image: “His Station and Four Aces” (1903), by C.M. Coolidge

So far, all that Schenectady has received from Galesi Group’s Dave Buicko and Rush Street’s Neil Bluhm are unenforceable promises of big dollars and jobs down the road, with lots of disclaimers, footnotes, and revenue projections adjusted downward. We should have expected and demanded much more of Mayor McCarthy, and his Legal and Planning Departments. As explained below, at the very least, we should ask how the Mayors of cities as different as Philadelphia (PA) and Brockton (MA) got so much from Rush Street Gaming, while Schenectady ended up with only smiles and praise for their cooperation from the so-called Partners.

. . . BROCKTON, MA

About ten weeks ago, in February 2015, Mohawk Harbor’s Casino Gang gave Schenectady City Hall its litany of zoning “needs”, and Mayor McCarthy gave them everything they asked for, and more, with no tit for tat. That same month, Rush Street Gaming, through its Massachusetts affiliate Mass. Gaming and Entertainment (“MGE”), entered into an agreement with the City of Brockton as part of its application process for a Massachusetts gaming facility license. As the Boston Globe reported (emphasis added):

“The six-page agreement, negotiated by Mayor Bill Carpenter, would require the casino’s developer to provide the city $3 million in upfront payments  and then $10 million a year, or 2.5 percent of gross gambling revenues, whichever is greater, if a casino is built.”  (“Brockton would receive $10 million a year under casino agreement,” Boston Globe, Feb. 20, 2015)

That’s right, Rush Street recently entered into a contract, called a Host Community Agreement, to make three million-dollar payments to Brockton for Community Enhancement during construction of its casino, and at least $10,000,000 a year in combined payments guaranteed once the resort is open to the public. (See the Yes for Brockton website’s description of the benefits promised to Brockton by Rush Street.) In addition, along with other benefits for the City and its residents, the Host Community Agreement (summary) obligated Rush Street to:

  1. commission and fund comprehensive Impact Studies to be performed by independent, mutually-acceptable experts, to assess the impacts of the Project on the City’s traffic and transportation infrastructure, utility infrastructure, public safety, and other impacts such as education and housing.
  2. enter a Mitigation Agreement, after receiving its gaming license, to fund the mitigation of all identified impacts.
  3. pay property taxes during construction based on the arms-length acquisition price of the land
  4. grant a hiring preference for both construction and permanent jobs, first to qualified Brockton residents and then to qualified residents of Surrounding Communities.
  5. pay for or reimburse the City for customary expenses incurred in the permitting and impact-review process
  6. issue at least $50,000 per year in gift cards or rewards vouchers to be used at local businesses located off site.

RSppMGCcover . . RSppMGC

– above screen-shots: Cover & Brockton Benefits page from Rush Street Power Point presentation to Massachusetts Gaming Commission, March 2, 2015 –

In addition to the very significant factor of allowing each municipality’s voters, rather than merely the local Council, to approve an applicant’s casino proposal, Massachusetts Gaming Law [G.L. Chapter 23K, §15(8)] differs from New York’s in that it requires the applicant to enter into a Host Community Agreement that sets out the responsibilities of both parties. But, the only specifically-required element is an Impact Fee of an unspecified size.  Everything else — i.e., payments prior to opening the casino; guaranteed minimum payments for real estate taxes and community enhancement, preference in hiring to local residents for jobs and vendors, etc. —  is a matter for negotiation and bargaining between the casino developer and the City.

checkedboxs  The most important aspect of the Agreement made by Rush Street with Brockton (as well as the agreements with Philadelphia) is that Rush Street clearly believes it can give such significant, firm prior commitments to the City and the Community and, nonetheless, make a profit sufficient to warrant submitting the application, waging a vigorous campaign, and making the immense investment necessary to develop and operate a casino. The apparent but understandable irony, of course, is that Rush Street offers its pre-operation payments, generous goodies, and binding revenue promises to the cities where the fight against Rush Street is the strongest (or where it faces a vote by the residents), and offers virtually nothing to places like Schenectady where “leaders” eagerly support their proposal.  That makes Mr. Bluhm a good businessman and poker player, but not necessarily a good neighbor. The question now is whether the City (as well as the County and Metroplex) can make up for those lost opportunities and take the City back from the New Bosses at the Old ALCO site. 

update (May 11, 2015): When confronted, by Mohamed Hafez at tonight’s City Council Meeting, with the many promises made by Rush Street to Brockton, Mayor Gary McCarthy made the expected excuse that Massachusetts requires the Host Community Agreements. As stated above, that response is incomplete, and cannot justify McCarthy not demanding similar agreements be made by Rush Street with Schenectady.

In addition, the Mayor pointed out that all New York gaming revenues go to the State, which distributes the funds to counties and municipalities.  That argument ignores the fact that the casino operator has the ability to guarantee that the city will receive a minimum amount each year in total revenues, and to reimburse the City for any shortfall from the revenue redistributed by the State and County.  In addition, the casino pays real property taxes directly to the County, City and School District, and those funds can be the subject of an agreement with the City, as can the other promises made by Rush Street with Brockton and Philadelphia, and the many other items that appear in typical Community Benefit Agreements.

RushStreetGiveaways For a detailed response to the Mayor, see “Money on the Table, part 2” (May 18, 2015), which describes the many Host Community Agreements and Impact Mitigation Plans entered into by other potential Upstate New York host municipalities last year, and their implications when judging the job the McCarthy Administration has done in Schenectady. Follow-up (May 27, 2015): See our post and related chart on Rush Street’s Giveaways (to everyone but Schenectady).

Additional points about casino location in Massachusetts:

  • See the Mass. Gaming Commission HCA webpage, for an explanation of Host Community Agreements, along with both full texts and summaries of existing agreements with 5 communities awaiting casino location. Also, click here, for 9 excerpted pages we’ve scanned from the 5 summary documents.
  • Payments prior to Opening. While it will be years before Schenectady tax payers will be seeing casino revenues to help reduce property taxes, Massachusetts localities, thanks to Agreements like the one made in Brockton, are already seeing pre-opening payments. Indeed, according to an article this week in the Attleboro Sun-Chronicle, several years before any casino dollars will be generated in Massachusetts:

Fifteen communities . . . have received roughly $5 million from the state’s three licensed casino operators as part of compensation agreements negotiated with the companies.

The payments range from more than $1 million to Springfield to $50,000 apiece to nearby Ludlow, Wilbraham, East Longmeadow and Holyoke. [“Early spend spree” (AP, The Sun-Chronicle, Attleboro MA, April 19, 2015)

  •  Helping Surrounding Communities. As the above Sun-Chronicle article suggests, another difference in the Massachusetts Gaming Law is that Massachusetts specifically attempts to help Surrounding Communities receive mitigation funds from a casino applicant/operator. (That is another way in which our State law fails to protect the public, making strong advocacy by a Host city for its residents and neighbors even more important.) Therefore, under G.L. Chapter 23K, §15(9), an applicant for a license must “provide to the commission signed agreements between the surrounding communities and the applicant setting forth the conditions to have a gaming establishment located in proximity to the surrounding communities and documentation of public outreach to those surrounding communities.” In Massachusetts, therefore, Rush Street says it will start approaching neighboring communities for mitigation agreements as soon as the people of Brockton vote “Yes” on the Brockton Agreement. See, “Neighboring towns keep close watch as Brockton prepares casino vote“, Boston Globe, April 26, 2015.

images-7 In Schenectady, by contrast to Brockton, neither City Hall nor the Casino (nor Big Brother Ray Gillen at Metroplex) has acknowledged publicly that there will be added expenses or other negative impact on the people, neighborhoods, and businesses of Schenectady and nearby towns. Instead, when asked about increased costs for police, fire, and emergency services, or the added need for public assistance and school district expenses, the “Casino Partners” glibly and dismissively tell us that more than enough extra revenue will come to the City and County from operation of the casino to easily pay for any such impacts, with lots left over to reduce property taxes. Similarly, when Council Member Vince Riggi (the only non-Democrat on the City Council) has asked his colleagues to study and report on added costs to the City caused by operation of the Casino, he has been rejected out of hand. images-3 . Likewise, calls by residents, and Mr. Riggi, at Council meetings, for a commitment by Rush Street for minimum payments to the City have been scoffed at by The Partners.  Imploring the Mayor and City Council to bargain from strength while they still have leverage has been met with Mayor McCarthy’s poker face and Council President King’s averted eyes. The goal proclaimed by Rush Street in the Brockton Agreement, “To achieve certainty for both parties”, cannot be heard along the Mohawk. . . . . .

.BrocktonCasino  . . . Casino-RenderResort – Rush Street Casino Renderings: [L] Brockton; [R] Schenectady (click on image for larger view) –

Architectural Comparison: There is at least one more significant way in which Rush Street has treated Brockton better then Schenectady: Neil Bluhm is planning a project at the Brockton fairgrounds that actually looks like it could be both a “destination resort” and part of a New England community, rather than a retread of his Midwest Des Plaines Casino, which has the charisma of a 1970s shopping mall or branch bank (see images above this paragraph). The Boston Globe said the Brockton proposal was a sprawling plan reminiscent of a New England college campus. I have wondered since last summer why no one at City Hall, the County Building, or Metroplex sent Rush Street back to the drawing board to come up with a design worthy of our City, perhaps in sync with the look and feel of our Historic Stockade District. I wonder if Brockton’s Mayor did just that, or if Rush Street decided from the start to go show Brockton more design respect than Schenectady has received.

StockadeFlagCollage

Stockade images

 

By the way, in its environmental remarks to the Location Board, concerning impacting nearby neighborhoods or historic sites, Rush Street the Applicant said there are design elements of the project that reflect the Stockade influence. Perhaps they mean the cherry blossoms that will apparently bloom all year long at Mohawk Harbor’s Casino, but only about a week in the real Stockade District.

.

PHILADELPHIA, PA . . .

We have in Philadelphia’s SugarHouse Casino additional, strong evidence that Mayor McCarthy and his Legal and Planning Departments have underperformed immensely in dealing with Rush Street and Galesi on behalf of the people of Schenectady.  The Philadelphia casino is operated by Rush Street Gaming and owned by SugarHouse HSP Gaming, LP, which are both controlled by Neil Bluhm and his family.  SugarHouse gives us a telling demonstration of just what happens when a City and community actually bargain with Rush Street, rather than grovel like desperate and helpless supplicants.

  • Schenectady residents focused on lowering property taxes, as well as those interested in funding projects to combat expected social and neighborhood issues, should pay particular attention to the Philadelphia story.

SugarHouseEntryway Two major Agreements, made prior to its Selection to receive a gaming license in December 2006 and its Opening in September 2010, have had a significant impact on the SugarHouse situation, including the size, shape and timing of its benefits.  First, the City of Philadelphia entered into a Development and Tax and Claim Settlement Agreement (“The Development Agreement”) with HSP Gaming on December 17, 2007, three days before its application was selected for a gaming license.  Second, persons and entities representing four nearby neighborhoods entered into a Community Benefits Agreement with HSP Gaming relating to the SugarHouse Casino in November 2008, almost two years before its opening. [You can learn about Community Benefits Agreements, including the SugarHouse CBA, at the CBA weblog.] . . . . . In 2006, in another significant prior action, the Philadelphia City Council passed §14-400 of its Zoning Code, establishing the Commercial Entertainment District (CED) to permit licensed gaming facilities. That was a year before HSP Gaming was selected by the Gaming Commission. Similar to Schenectady’s original C-3 Waterfront Multi-use Zoning ordinance, Philadelphia’s 2006 casino zoning included a very strong public access requirement at riverfront locations (§14-406(5)(b), details below). Unlike Schenectady’s amended casino zoning provision, Philadelphia continues to specify the requirement of guaranteed public access to the riverbank. [By the way, there is no waterfront on the Braxton casino property. If there were, I’m sure its citizens would have achieved a firm promise of permanent waterfront access, as the folks in Everett and New Bradford, MA, recently did.]

Note: In December 2011, the Philadelphia Zoning Code was revamped and reorganized, but its casino district provisions were only renumbered to §14-405, and renamed, without changing their substance. The district is now called SP-ENT (Special Purpose-Entertainment). For those interested in making a comparison, the Repealed Casino District provisions can be found here.  Click on this link for the current SP-ENT provisions.

PENNTreatySSD Logo Not only did Rush Street Gaming enter into a comprehensive Community Benefits Agreement with Philadelphia for its SugarHouse casino, it went beyond the elements customarily found across the nation in development CBAs by agreeing to the creation of a Special Services District (“SSD”), controlled by four neighboring communities, to administer the CBA on behalf of the Community. The resulting SSD is called the PENN Treaty Special Services District (“PENN Treaty SSD” or “PTSSD”). Click this link for the full text of the PENN Treaty SSD Articles of Incorporation and the SugarHouse CBA.

Why “PENN Treaty”? According to legend, Pennsylvania founder William Penn signed his treaty of peace with the local Lenape tribe under an elm tree just off the Delaware River in 1683, at a riverfront spot near SugarHouse. The tree fell down in a storm in 1810, but the site was dedicated in 1894 and named PENN Treaty Park.

PENNTreatySSD Logo Here are some of the most important provisions in the SugarHouse Community Benefits Agreement:

1.Goals: The CBA says that SugarHouse wants to open on schedule, “with the minimum disruption practicable, during both development and operation to the Neighboring Community.” In addition, the Community Signatories are said to desire ongoing cooperation with SugarHouse, “in order to properly address the impacts of casino development and maximize the benefits of such development to the community.”

2.red check Special Services District: The Community Benefits Agreement includes setting up a Special Services District, called PENN Treaty SSD (“PTSSD”), which is a nonprofit organization formed and controlled by volunteers from the four Neighboring Communities that border on the Casino. As PTSSD states on its web homepage, it distributes grants and sponsorships to organizations that provide charitable benefits to the residents of the SSD. PTSSD started operations in January 2010, nine months before SugarHouse opened for business.

3.red check Funding:  It took two years of continued wrangling, but the Casino eventually began making the required payments under the CBA and the Special Services District has been sharing those funds since that time with the communities of Fishtown, Northern Liberties, South Kensington and Old Richmond.

1.PTSSD has already received $1,175,000 from SugarHouse under their CBA to fund projects for the benefit of the neighboring communities

2.SugarHouse agreed to pay $175,000 each year during the Pre-Opening period; $500,000 the first Post-Opening Year; and $1,000,000 in subsequent years, for 15 years, with upward adjustments up to $1.5 million.

3.SugarHouse also agreed to pay up to $35,000 for the legal fees incurred by the community representatives setting up the SSD, plus $1000 in startup expenses

4.red check Waterfront Access: SugarHouse agreed that “in no event shall such access be more limited than provided in the [Development Agreement it made with the City]”. As a result, as detailed at pp. 6-7 of the Development Agreement, once SugarHouse completed its Waterfront Promenade (during its first phase of construction), it must permit “substantial public access . . at all times along its waterfront pursuant to a mutually satisfactory agreement concerning such access,” with street entry from both north and south ends of the Casino complex, and with very limited partial restriction allowed for special events and safety reasons. SugarHouse must also consult with the SSD on a regular basis regarding access to the waterfront.

Note: This is of course, quite different from the situation in Schenectady, where Rush Street and City Hall collaborated to remove a public access guarantee from its C-3 Waterfront zoning provision: with Council Member Leesa Perazzo inanely explaining “we don’t need it because they’re going to do it anyway,” and Director of Development Jaclyn Mancini pointing out that “they’ll have access to the retail shops,” as if being able to shop at Mohawk Harbor retail establishments was in question and is equivalent to being able to freely enjoy the waterfront. When the topic of public access came up before the Planning Commission, Galesi Group’s CEO and representative Dave Buicko twice said “it’s private property”, and he admitted they want people to come as customers.

5. Promotion of Local Businesses.  SugarHouse must operate a Promotional Player Program with points redeemable at local businesses and must keep a list of businesses offering discounts to SugarHouse players’ club members.

6.Traffic. Miscellaneous obligations are undertaken by SugarHouse aimed at minimizing “disruption caused by increased or modified traffic” related to the development and operation of SugarHouse. For example, free parking must be provided for employees and casino guests to prevent spillover to neighboring streets. Also, a one-time $5000 payment was made to allow for free car washes for those nearby affected by construction dust.

In addition, the Development and Tax and Claim Settlement Agreement with the City of Philadelphia included many commitments, such as:

•Security, Safety, Medical Emergencies: SugarHouse will fund private security for its complex sufficient to maintain the peace; will pay for expenses related to 911 emergency calls from the Casino; and will provide or fund ambulance service for medical emergencies at the Casino.

•Traffic Report. In the first and third years of operation, SugarHouse must do a traffic count at specified intersections and provide a plan to remedy any failure to reach goals set forth in certain Traffic Letters.

red check Specified Settlement Payments and Use and Occupancy (property tax) Payments: Specific Dollar Amounts are pledged (see p. 10), with a minimum of $3.2 million in Settlement Payments, and $1 million in Use and Occupancy payments in each of the first 10 years, and $3.5 million in years 11 to 20, with CPI adjustments.

•LEED & Green Roof. SugarHouse will use an LEED Certified consultant, and promises to spend a minimum of One Million Dollars to construct a Green Roof on the facility covering at least 60,000 sq.ft. (Click here for the EPA webpage on Green Roofs) In Schenectady, the Casino Gang speaks more in terms of aspirations than promises, and they seem to be saying something like, “Gosh, we’ll do what we can to be energy efficient, as long as it doesn’t cost too much.”

•Waterfront Access. As discussed above in the CBA section, the Development Agreement (at 6-7) sets forth numerous public access requirements, and explains limited restrictions on access that might be imposed due to special events, construction, and safety concerns.

Zoning Code Differences. . . . The Schenectady City Council recently pushed through a set of C-3 Waterfront zoning amendments to meet the “needs” of the developer and operator, with the City’s incurious, almost-servile Planning Commission granting it major CYA protection (see our earlier posting). The resulting zoning code leaves the people of Schenectady with fewer rights and less protection. (See, e.g., our posting of Feb. 10, 2015, “zoning vote hands the Casino Gang a Blank Check“) In contrast, treatment of licensed gaming facilities in the Philadelphia zoning code was put in place prior to the selection of SugarHouse for a casino license and not tampered with at SugarHouse, as they had been in Schenectady under pressure to fulfill the pressures, whims and exaggerated deadlines of the Galesi Group and Rush Street. . Here are examples of the contrast between casino-related zoning provisions in Schenectady (its C-3 District provisions, §264-14, which are described, with a link to the final version, at tinyurl.com/C-3Changes) and in Philadelphia (its SP-ENT provisions):

Continue reading

the unpromising future of casino gambling

update: Cuomo on Declining Revenues (July 16, 2014)  Gov. Andrew Cuomo, when asked by reporters yesterday his reaction to predictions of reduced casino revenues due to oversaturation in the Northeast gaming market, responded (in “Cuomo: Size of NY casino play depends on investorsCapital New York, July 15, 2014) :

abacus “The private market, which reads Moody’s, which does this for a living, which is going to invest their money, will make a determination as to what scale and scope the market can support. And they will then build the buildings and employ people and run the business because they think it’s a good business to run.”

The Governor went on to say, “I’m sure they will propose what they believe will be successful.” Cuomo apparently was not concerned, as he told the reporters, “The state isn’t building any casinos. The state isn’t spending any money here, right? These are private companies which normally know what they’re doing.”

The questions for the Governor came at a conference in Niskayuna, where he was announcing the creation of a $500 million power electronics consortium led by General Electric in Albany that would give companies a a place to research and develop important new technologies. The State would pay $135 million to build the infrastructure for the consortium.  If he wasn’t asked at the press conference, we’d like to ask the Governor:

  1. checkedboxs Shouldn’t the Gaming Facility Location Board pause its review of casino applications and ask the applicants to reassess the “scale and scope the market can support” and to adjust their proposals, in light of the experts’ downward predictions? And,
  2. Why take a risk with the financial, fiscal and social problems caused by gaming, when Upstate development can be based on future-oriented, productive industries such as the technology represented by the Power Electronics Consortium?

[original posting]

plungegraphsmY There’s been a flood of recent articles and information pointing to the increasing unlikelihood of any casino fulfilling the glowing promises of revenues and resulting tax reductions and jobs made by its boosters.  For example, since we wrote “psst: the casino cash cow has too many calves” on June 21st, we’ve seen:

  • Moody’s downgrades U.S. gaming industry“, TU Capitol Confidential (July 1, 2014, by Benjamin Oreskes”)    Moody’s report notes a “strong indication that U.S. consumers will continue to limit their spending to items more essential than gaming, even as the U.S. economy continues to improve.”
  • Wait on casino licenses” (Albany Times Union editorial, July 6, 2014).  Here’s part of their discussion:

“These pessimistic prognostications merely underscore what is already known in New York. A lot of people will have to spend a lot of money at the new casinos if they are to deliver what those who pushed the state constitutional amendment had promised: job growth, increased school aid and lower property taxes. Developers of the proposed gaming resort for Schenectady, for example, predict attendance there would be around 7,500 on weekdays and 10,000 on weekend days. It’s hard not to be skeptical.

plungegraphsmBlack “The problems in other states suggest that the long-term success of New York’s planned casinos is dubious. And when casinos fail, all you have left is unemployment, empty buildings that can’t pay taxes and calls for a government bailout to rescue a struggling industry.”

  • Trump Plaza Casino In Atlantic City Expected To Close, Owners Say” (Huffington Post/AP, July 12, 2014):  “Atlantic City’s crumbling casino market disintegrated even further Saturday as the owners of the Trump Plaza casino said they expect to shut down in mid-September. . .  . If Trump Plaza closes, Atlantic City could lose a third of its casinos and a quarter of its casino workforce in less than nine months.”
  • Gambling on Casinos in New York” (New York Times editorial, July 13, 2014): “A five-member state board appointed by Gov. Andrew Cuomo is supposed to choose four sites and the companies that can build on them by this fall. This seems much too hurried. As Moody’s is warning, it is time to beware of all the promotional hoopla and realize that casino gambling does not always deliver on its promise.”
  • Fred LeBrun: “Minds once lost can be found again” (Albany Times Union, July 12, 2014): “We plunge ahead without so much as a nod from our leading politicians that wagering on casinos as an economic development tool may be a sucker’s bet and that just maybe we ought to take a harder look at ‘none of the above’ for the time being, whether there’s now a constitutional amendment in place allowing casinos or not.

    . . . “But not a peep. It’s a credit to how much can be bought in New York state for the $11 million the gaming industry spent in lobbying the same top pols.

    plungegraphsmMatte

    “It’s predictably annoying that our State Gaming Commission continues to take a strong stand in defense of the gambling crowd. It’s become the industry’s prime booster. . . .

    “What’s bothersome about the boosterism is that the Gaming Commission is also by statute the regulator of all gambling in New York. Its pronouncements show bias, which is at the very least inappropriate, unwise and not a confidence builder for the commission’s broader and thornier mandate to do what’s best, gambling-wise, for all New Yorkers even if that could ultimately mean saying no to everybody.”

    – each of the above articles is worth reading in full –

threemonkeys So, what are the unflinching boosters of the Schenectady casino thinking these days?  Mr. Mayor Gary McCarthy?  Madame Council President King? Stockade Association President Mary D’Alessandro?  The Trustees and Acting President of Schenectady County Community College?  The Me-too City Council members: Mootoveren, Kosiur, Perazzo? The Council’s self-appointed “financial analyst” Carl Erickson? Philip Morris, CEO of Proctors (and chief instigator and negotiator for what we like to call the FairGame Concert Cartel)?

How big of a gamble are the casino cheerleaders willing to take?  How do they weigh the self-interested promises of Galesi Group and Rush Street Gaming against the prospect of the probable increase in crime, problem gambling, and domestic violence, and a decrease in property values and the livability of the Stockade neighborhood?   Are they willing to accept the soul-deadening tradeoff of adopting a soak-the-poor fiscal policy, and the growth of problem gambling among our elderly and our college students, in the hope of obtaining increasingly uncertain future payments from the Casino, which they hope will appease the City’s taxpayers?  Does the shiny future they predict for Schenectady include the sight of a failing casino project along Schenectady’s riverfront and the inevitable request for tax breaks and financial assistance that we can expect once gaming revenues shrink along the Mohawk?

smallquestionmark Perhaps the most important question is: Do any of the so-called leaders mentioned above have the courage to stand up and ask the Gaming Facility Location Board to reject the Schenectady casino proposal, or at least to put off granting any license for the Capital Region, until it is much more certain that the jobs and revenue projections are realistic, given the tidal wave of negative predictions about the industry’s prospects?

Don’t forget: the Location Board has the power to reject all of the applications if none of them appears to meet the goals and requirements set up in the enabling statute and the Request for Applications.

As is stated in Section IV. A of the Request for Applications to Develop or Operate a Gaming Facility in New York State [Adobe pdf. version] [“RFA”] (at page 19):

In accordance with PML Section 1314.3, “Within any development region, if the commission is not convinced that there is an applicant that has met the eligibility criteria or the board finds that no applicant has provided substantial evidence that its proposal will provide value to the region in which the gaming facility is proposed to be located, no gaming facility license shall be awarded in that region.”

And, See RFA Sec. III  [at 17]

M. State’s Reserved Authority.

In addition to any authority set forth elsewhere in this RFA, the Board reserves the authority to:

3. Amend the RFA and direct Applicants to submit modifications to their Applications accordingly;

5. Reject any or all Applications received in response to this RGA, and reissue a modified version of this RFA;

6.  Withdraw the RFA at any time, at the sole discretion of the Board.

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psst: the casino cash cow has too many calves

toomanycalves

too many calves!

 An article in the Wall Street Journal this week revealed the Big Secret that everyone who’s done a little research, or just reads a newspaper regularly, already knows:  The great expansion of casinos in the Northeast over the past decade is “causing upheaval in the region.”  “Casino boom pinches northeastern states” (Wall Street Journal, June 19, 2014)  Indeed:

“States that adopted gambling earlier than their neighbors, such as Delaware, New Jersey and West Virginia, are watching dollars drain away, and new projects have some wondering how many facilities the area can support. Twenty-six casinos have opened since 2004, fueling a 39% increase in total annual gambling revenue in the mid-Atlantic and New England, according to a study by the University of Nevada, Las Vegas. Within 100 miles of Philadelphia, there now are 24 casinos, a big shift from the early 1990s, when Atlantic City, N.J., enjoyed an East Coast monopoly. At least a dozen more gambling spots are in the pipeline from Massachusetts to Maryland, raising fears in states such as Rhode Island that their casino tax windfall is at risk.

In reaction to the resulting dwindling of revenues:

  • Delaware casinos are asking the State for a $20 million tax break. “Delaware’s proposed tax relief for casinos, which needs legislative approval, would lower the table-game tax rate, eliminate fees and shift vendor costs to the state.”
  • “Delaware officials say declining gambling money—down 29% since fiscal 2011—is one reason the state cut 538 public jobs over the past five years.”
  • Public services have been reduced, in places like Ocean County, N.J., “because of a dip in casino revenues that fund programs for the elderly and disabled.”
  • Connecticut has forecast a 5% decline in state revenue from casinos in fiscal 2016 and a 20% drop the following year, and “Rhode Island is projecting it will lose about $422 million in casino revenue over the next five years, contributing to budget struggles.”

threemonkeys Somehow, the Casino Cheerleaders that have steamrolled approval of the Schenectady casino through the City Council and County Legislature seem oblivious to these trends. Maybe Mayor Gary McCarthy or County Planner Ray Gillen have some secret plan that will make Schenectady immune from the forces that have greatly reduced projections of casino revenues and put overly-reliant government budgets at risk.  As the casino cash cow is sucked dry by all those hungry calves, maybe the ALCO pig can fly and Galesi’s Goose really does lay golden eggs.

update (July 1, 2014):  Yesterday, the same day that 16 applicants seeking licenses for 17 UpState casino licenses dropped boxes and flashdrives with their final Applications to the Siting Board, with all their rosy predictions, Moody’s downgraded the outlook for the U.S. gaming industry from “stable” to “negative”.  See “Moody’s downgrades U.S. gaming industry“, TU Capitol Confidential (July 1, 2014, by Benjamin Oreskes”)    Moody’s report notes a “strong indication that U.S. consumers will continue to limit their spending to items more essential than gaming, even as the U.S. economy continues to improve.”

follow-up (July 8, 2014): Noting Atlantic City casinos that have recently declared bankruptcy or closed, along with the Moody’s report discussed above, and the Comptroller’s words of caution (in “DiNapoli: Gaming Revenue Plays Increasing Role In State Budget”  (NYS Comptroller Report, May 2014), the Albany Times Union‘s editorial board said on Sunday that the Siting Board should “Wait on casino licenses” (July 6, 2014).  Here’s part of their discussion:

“These pessimistic prognostications merely underscore what is already known in New York. A lot of people will have to spend a lot of money at the new casinos if they are to deliver what those who pushed the state constitutional amendment had promised: job growth, increased school aid and lower property taxes. Developers of the proposed gaming resort for Schenectady, for example, predict attendance there would be around 7,500 on weekdays and 10,000 on weekend days. It’s hard not to be skeptical.

“The problems in other states suggest that the long-term success of New York’s planned casinos is dubious. And when casinos fail, all you have left is unemployment, empty buildings that can’t pay taxes and calls for a government bailout to rescue a struggling industry.”

For more on this topic, see and our compilation posting, “the unpromising future of casino gambling” (July 14, 2014).

 

why are Mass. voters saying No to casinos?

 update (June 24, 2014): The highest court of Massachusetts decided today to allow a question seeking repeal of the state’s casino gambling law to go on the November state ballot.  See “Voters to decide fate of Massachusetts casino law“, AP/Boston Herald, June 24, 2014). Observers expect the gaming industry to wage an enormous advertising campaign, probably aided by labor unions, and other corporate groups who benefit from the operation of casinos. The article states: “John Ribeiro, chairman of the group Repeal The Casino Deal, said opponents were prepared for a ‘David versus Goliath’ fight in which they’ll likely be outspent ‘100 to 1,’ as they were in many communities that held local votes on casino proposals.”

 When the Massachusetts Gaming Commission met last week to select a licensee for the first resort-casino in the state, to be located in Western Massachusetts, there was only one casino proposal in contention, and the license granted was “tentative”?

 Do you suppose the casino cheerleaders in Schenectady City Hall and the County Building know why?

  • The MGM-Springfield application was the only remaining proposal in Western Massachusetts, because voters went to the ballot box and rejected all the other applicants.  Only Springfield would gamble on a casino.
  • And, the license can only be tentative, because over 90,000 people signed an initiative petition they hope will be on the statewide ballot on November 5, 2014, which would make the existing 2011 law allowing casinos void.. The courts are deciding whether to allow the initiative on the ballot.  If the Initiative is not allowed on the ballot or is defeated on Nov. 5, MGM’s Springfield license would go into effect.  Observers believe the Repeal the Casino Deal Initiative has a pretty good chance of succeeding, if it is on the ballot. See this Boston.com article.

In town after town, the people of Massachusetts or their elected officials have rejected specific proposed casinos.  And, across the State, tens of thousands of adults want the Casino Deal overturned, because they believe it is a very bad bargain for the people of their Commonwealth.

SmallShark Go to the lively Repeal the Casino Deal website for answers to my questions, and many more, with voluminous Resources, and a NIMBY page of Massachusetts leaders who are pro-casino, but have admitted they would not want to live near one.