It is inevitable.
The expansion on lower Broadway for the Encore Casino and Hotel is presently under discussion.
A series of public hearings are being held. The first, several weeks back, produced yeas and nays – more yeas than nays – and it is expected the second hearing will do the same.
Allowing the casino and hotel to expand its footprint on lower Broadway makes great economic sense for the Wynn Corporation.
At the same time, taking obscenely horrible commercial industries and putting them out to pasture to clean up the polluted land for a major investment in entertainment venues is all about common sense, frankly.
Obviously, the expansion only makes complete sense for the city if the city is rewarded appropriately with an added amount of income from Wynn and that traffic and congestion are mitigated as serious real time issues.
Wynn is presently taking in about $750 million – to $800 million a year on lower Broadway.
The city receives about $35 million to $40 million in a host agreement payment from Wynn of $30 million yearly and the city also receives hotel room tax income.
In other words, the city’s income for hosting a billion dollar a year operation on lower Broadway is well under what it should be receiving.
We estimate the city should receive about a 10% return from Wynn for allowing the expansion as well as the operation of the casino and hotel.
This makes sense as inflation has robbed the city of almost 8%-10% of the value of the $30 million a year it receives as per the Host Agreement.
Concerns should be aired at the public hearings. Concerns should be met by Wynn and everyone else.
Bottom line, the city should be receiving closer to $75-$80 million a year.
If Wynn can take in $1 billion or near to it, the city deserves to receive a much larger payment more reflective of what is fair and just.