Zoning tax exemptions could take a big bite out of revenue from proposed new casino slots and table game sin Delta.
For months now, the City of Delta, British Columbia has been mulling over a proposition from Gateway Casinos & Entertainment. That company would like to construct its next tourism-promoting gambling complex atop the old Delta Town & Country Inn. But the proposal isn’t looking so glamorous as it once did.
Like most city’s across Canada, when a new casino project comes about, Delta has been eyeing up the financial benefits. The municipality was calculating a 10% cut of the province’s revenue, with estimations coming in around $2.5 to $3 million annually, not to mention hundreds of thousands in permit and application fees. Those figure could drop significantly due to special zoning laws and tax exemptions.
New Casino Slots and Tables in Delta
Gateway Casinos is looking to invest $70 million into the new entertainment complex, complete with casino, hotel, restaurants, convention space and other amenities. The company says will employ up to 700 workers, playing host to between 500 and 600 slot machines, with 24 table games in the mix. Gateway’s location for the project is the intersection of Highways 17A and 99; an 11-acre parcel that currently accommodates the old Delta Town & Country Inn.
The British Columbia Lottery Corp (BCLC) is on board with the plan. City officials have met to discuss the proposal twice already in open hearings, and gave preliminary approval for Gateway’s rezoning application for the property last week. A public participation meeting will take place on May 1, followed by a throng of other procedures and permit approvals that must take place before construction can begin.
These are all standard proceedings with any new Canadian casino, but there is something a bit different about this one. This week, after the rezoning application received preliminary approval, it’s come to light that the property in question lies within the boundaries of a special economic investment incentive zone.
Delta Casino Project Losing its Luster
The property is located in a zone that is eligible for the ‘Delta Industrial and Tourism Revitalization Tax Exemption Program‘. Any new project in this area that meets one of four specific criteria may qualify for property tax exemptions and a reduction in municipal fees. The goal of the program is to, “establish a revitalization tax exemption program to encourage higher value industrial and commercial tourism development in Delta”.
According to this bylaw, the Delta casino complex could qualify for a municipal tax exemption for up to 5 years. They may receive up to 60% discounts on all permit and application fees. Furthermore, property taxes would be “frozen” at the current 2018 rate, guaranteeing a static payment of $157,000 per year for the next 5 years.
Once construction of the casino is complete, Gateway could accrue a maximum benefit of $450,000 in property tax relief, plus an additional savings of $265,000 in permit fees that would have gone to the municipality.
As for that $2.5 to $3 million in payments resulting from Delta’s 10% cut of provincial revenue from the casino… that’s liable to take a hit as well. Estimations suggest Gateway could entertain as much as $500,000 a year in tax breaks for the first 3-5 years of operation. Suddenly, with the May 1 hearing looming, the proposal for new casino slots and table games is starting to lose its luster.