The city of Schenectady will be receiving an estimated $3.5 million from the casino project before the facility is up and running.
Casino operator Rush Street Gaming of Chicago is required to pay the state a $50 million licensing fee by March 31. Of that fee, the city and the county will receive $2.5 million each.
On top of that, Rush Street plans to have an approximately $200 million mortgage on the casino. The city would get .5 percent and the county would receive .25 percent, or $1 million and $500,000 respectively.
Schenectady Mayor Gary McCarthy said the one-time revenue would be used for property tax relief.
“At this point my attempt would be to apply it toward our fund balance,” he said. “As we get into next year we’ll try to budget conservatively and look at the revenue stream coming in and other revenue to be able to offset some of the property taxes that have been a major issue.”
Rush Street has not yet paid its fee for a casino license but plans to do so by the end of the month, according to Gaming Commission spokesman Lee Park.
“Rivers Casino and Resort Schenectady will create hundreds of jobs and generate millions of dollars in tax revenue for the city and the county,” Rush Street said in a news release. “With construction well underway, the next step in that process is payment of the state gaming license fee, which we plan to submit by the March 31 deadline.”
Rush Street is partnering with Rotterdam developer the Galesi Group on a $330 million Rivers Casino and Resort at Mohawk Harbor at the old Alco site off Erie Boulevard.
The casino is currently under construction and is expected to open by next March, according to Rush Street CEO Greg Carlin.
Once operating, the casino is projected to provide the city and the county with $4.1 million each annually in gaming revenues, plus about $2 million to the Schenectady City School District.
The del Lago Resort and Casino in Tyre, Seneca County is the only facility that has paid its licensing fee to date, Park said. Rochester developer Thomas Wilmot paid the fee on Wednesday.
Montreign Resort Casino in Thompson, Sullivan County also received a casino license from the Gaming Commission and has yet to pay its licensing fee.
Of the $50 million licensing fee, 80 percent is distributed statewide to schools and for tax relief, Park said. Another 10 percent goes to counties throughout the host region and the remaining 10 percent is split between the host municipality and the host county.
That means in the Capital Region, surrounding counties will get a portion of 10 percent, or $5 million, of the licensing fee. The $5 million will be split among Albany, Rensselaer, Saratoga, Fulton, Montgomery, Schoharie and Washington counties.
Once Rush Street pays the licensing fee, the money will be distributed when it’s received and processed by the state Comptroller’s Office, Park said. It is unclear when the city and the county would receive the payment.
Of the estimated $200 million mortgage on the casino, $1 million will be given to the city along with $500,000 each for the state, county and Capital District Transportation Authority.
Council President Leesa Perazzo said the additional revenue for the city is a “game changer” and will help to lower taxes for residents.
“To me this is just the beginning of revenue that will take some of the burden off the taxpayers,” she said. “All the other development on the site will also strengthen the tax base.”
McCarthy noted that the 2016 city budget includes a .5 percent tax reduction thanks to the sale of 19 properties along Barrett Street and Seminary Place as part of the Live-In Schenectady project.
The City Council plans to vote on the sale of the properties, totaling $200,000, during its meeting on Monday. As part of the project, a group of 15 investors plans to build 10 homes in phase one and another 15 homes in phase two.
“When we did the budget last year the final approval had still not been given to the casino,” McCarthy said. “I talked about in the 2017 budget a roughly 10 percent tax cut. It’s a light at the end of the tunnel in terms of property tax relief.”
In addition to the casino, Galesi is developing the 60-acre brownfield along the Mohawk River with housing, hotels, office and retail buildings, a 50-boat-slip harbor and biking and walking paths.
Construction is underway on Galesi’s 204-unit apartment building, with ground-floor retail space, along with BBL’s 124-room Courtyard by Marriot hotel. Townhouses, office and retail will follow.
Galesi is looking at a 45B tax program on the apartment building, which would have the developer pay 50 percent of taxes the first year, with a 5 percent increase each year for 10 years, according to Ray Gillen, chairman of the Schenectady County Metroplex Development Authority.
Gillen said Metroplex hasn’t had discussions with Galesi yet regarding tax payments on the office and retail buildings on site.
Gillen stressed that the casino and the casino’s adjacent 163-room hotel would pay full taxes and would not receive a payment in lieu of taxes, or PILOT, agreement.
The Courtyard by Marriott hotel is also paying full taxes, he said.
“The casino and the casino hotel will pay full taxes,” he said. “That’s direct payment to the city and the county and then you get sales tax as well.”
Perazzo said she believes the development of Mohawk Harbor, along with other projects happening downtown, is helping to make Schenectady more of a destination.
“I always said I believed in my heart of hearts that Schenectady would come back,” she said. “And here we are. We have been building toward truly being a tourism destination. There are so many wonderful things happening.”
Reach Gazette reporter Haley Viccaro at 395-3114, [email protected] or @HRViccaro on Twitter.
Categories: Business
