by Josh Resnek
In the coming year, if all goes as it is expected with the casino and hotel, the city should net at least $40 million above the $208 million budget just approved.
By any stretch of imagination in the world we live in, $40 million is a mighty amount of free cash to do with as you please in a small city of 50,000 residents.
Forty million a year for many years to come from the casino
and hotel, or more, should make Everett’s treasury among the richest in Massachusetts.
At a finance meeting last week at city hall, the mayor and the city’s Chief Financial Officer Eric Demas detailed the windfall.
As part of the Encore Host Agreement, the city receives $25 million a year for in lieu of tax payments.
The bonus ball, is the per room tax income the city will receive from the 670 room hotel.
With most of the rooms renting for more than $600 and many of them at the $1200 level per night, “this could add from $6 million to $10 million,” said Demas.
More likely than not, he hinted, the amount could be closer to $12 million.
This is every year, amazingly enough.
With Everett’s cut of casino earnings from the state and with the hotel tax and the in lieu of tax payments being deposited into the city treasury, the total amount of casino-hotel compensation to the city could be at the $40 million mark during the first year of operation.
Neither the mayor nor Demas, nor anyone on the council said a substantive word about the possible use for the added cash payments. In fact, the mayor, his CFO and everyone to a person on the city council have all adamantly agreed, the schools get nothing more than the $85 million just agreed to as part of the city’s budgetary process. So far, this is the only promise made by the city’s elected public officials about what to do with the windfall.
Followers of the city’s budgetary process expressed awe at the possibility of such a huge amount of free cash dovetailing the $208 million city budget.
“It is a bonanza. But we, the people of Everett, are paying for it,” said Councilor at Large and former Representative Wayne Matewsky. “The money must be used with care to preserve the advantages the casino are going to bring us. If every dollar is spent, then we are wasting our most precious resource – which is cash,” he added.
Neither the mayor nor Demas consented to speak with the Leader Herald.
Of course the payments of $40 million a year are almost entirely dependent on the revenues coming into the casino and hotel – rather than on the stipulations as enumerated in the Host agreement.
If the casino and hotel revenues are light, if visitation and income expectations are not met, if the casino and hotel are not a robust success for Wynn Resorts, then this experiment to begin in about 18 days will have to be reevaluated, and the Host agreement, out of necessity, renegotiated.
If the casino and hotel’s income is light, then it cannot pay the rich in lieu of tax payment as stipulated.
If the hotel is only half filled, there goes the hearty room tax revenues the city is depending on.
Everything depends of on the level of success the casino and hotel achieves; how much money it takes in, how many hotel rooms are rented, what exactly the bottom line is.
On the other side of the coin, when the doors open, if the casino and hotel are met by mobs of men and women gambling, and 670 guests filling all the hotel rooms every night, well, the Wynn Resorts treasury will be engorged with cash and the Everett city treasury will be awash with newly found money.
Also, there is another possible multi-million dollar a year cash bonus heading into the city treasury if and when the Ever Source tax case in court is settled – and it will shortly be settled.
Ever Source is the city’s largest taxpayer at $15 million a year.
The Ever Source tax deal is at an end after ten years.
Being renegotiated is the assessment for the huge industrial energy producing facility located on the edge of the Mystic River directly across the casino and hotel site.
Former Governor William Weld has been paid well over $1 million by the city to support the city’s contention that the Ever Source tax assessment is way too low.
Some believe the sprawling energy site should be assessed for $1 billion.
The assessment number being bandied about is all over the place, according to sources familiar with the tax case.
Sources said a new tax deal with Ever Source could lead to an additional $5 million to $10 million a year for the city in tax revenues when the case is settled.