Is Everett’s Host Agreement suitable for the future?
By JOSH RESNEK
Host agreements such as the one the mayor negotiated with the Wynn Corporation in 2019, are not subject to change.
We suppose that anything can be changed in this world we live in but a host agreement is like the Magna Carta – that is – it is set in stone.
This means the city is to receive $30 million a year in lieu of taxes for a very long time no matter how much money the casino generates in gambling revenues.
Right now, the casino is nearing the $60 million a month mark after a period of post pandemic powered growth.
It is believed by casino analysts that the growth spurt should maintain itself and that growth itself should continue with a steady rise as time goes by.
At $60 million a month, which annualized, is $720 million a year, the city receives $30 million.
If the casino has a $800 million year, the city receives $30 million.
A deal, after all, is a deal.
At this rate, the city receives about a 5% in lieu of tax payment from the casino.
The state receives 25%.
What seemed like a bonanza for the city at first blush is not perceived as a bonanza any more.
In fact, the split doesn’t seem fare. Nor is it tied to inflation.
Paper money is spent quickly. Money is worth less every year.
A new ladder truck can cost more than $1 million.
A fleet of city vehicles can cost three or four times that in total.
Infrastructure repairs or even the city’s contribution to a new high school that is needed could eat up the $30 million in one fell swoop.
The $30 million a year the mayor bargained for with Encore 2 years ago does not today look to be the money tree that it was supposed to be.
The hotel can generate an additional $5 million a year for the city at present level of room taxation charged by the city and paid by the hotel to the city.
But even that healthy addition comes up short today because the hotel is only half filled and for a long time, almost a year, was closed or limping along because of the pandemic.
Everything under the sun can be litigated today.
The Everett city host agreement with the casino and hotel can be litigated.
The casino might have the right to cancel the host agreement if it was failing, or at least to reduce it.
By the same token, the city likely has the right to bargain for a better deal if casino income shoots through the roof.
Both sides would have to come to the table and prepared to act.
That could take some mighty doing.