Reports say casino could be on the block, $800 mil price tag
By JOSH RESNEK
The Encore Boston Harbor Casino and Hotel is apparently up for sale.
The price: $800 million.
This is a far cry from the $2.6 billion price tag it cost for Wynn Resorts to build the complex.
The possible sale of the casino and hotel could have serious financial repercussions for Everett.
Encore is the largest income producer for the city by a wide margin.
Any interference with that, like a sale at a vastly reduced price, would impact its income potential for the city.
Questions already exist about whether or not Encore has made all its in lieu of tax payments to the city and whether or not it will shortly be attempting to renegotiate its host city agreement to reflect the sharp downturn in income.
The Leader Herald has received several bold statements from industry leaders and insiders who claim that Wynn Resorts is now hiring a broker and has already made several quiet inquiries to industry leaders about purchasing the Everett property.
“They want to sell it and move on,” said one source, who wished to remain unnamed.
“They know they can’t continue the business plan for a five star operation in Everett,” added the source. “When Steve Wynn was pushed out of the scene, the entire business plan was shattered.”
“The virus has hurt the operation, but it wasn’t working the way it was supposed to even before the virus hit,” the source said.
Encore cost an estimated $2.6 billion to build, furnish, and to open in June 2019.
Since March, despite an admirable effort by Encore to maintain its 5,000-person workforce for several months into the pandemic, the workforce has shrunken from 5,000 to about 800.
The hotel is closed.
The casino is operating at severely reduced hours.
Income projections have been obliterated.
Despite the positive possibilities for a return to normal a vaccine provides; it is unclear how long Encore and the gambling industry will need to suffer losses before there is a return to stronger income projections and realities.
In other words, how long will the bleeding last until there is a turnaround?
If the project is sold, questions will arise about the ability and the willingness of the new owners to maintain the nearly $30 million a year it must pay to Everett for the privilege of owning the operation.
Considering the effects of the virus and the restrictions placed upon the casino and hotel by the state, income has been hovering in the $40 million a month range – a far cry from the $800 million to $1 billion in income hoped for when the doors first opened.
The hotel’s closure for so long is damaging the city of Everett hotel room tax income which was expected to be at least $5 million for the year.
It is estimated that room tax income will be in the $1 million range, if that, for 2020.
City officials do not comment to the Leader Herald.
However, it is known that city officials and the mayor are concerned about the project’s possible sale and how the $30 million host city arrangement will be maintained.