"I am a little bit suspicious as to how much each of those individuals have studied this proposal," B.C. Pavilion Corporation (PavCo) chairman David Podmore, commenting on opposition to a proposed $500-million casino project in downtown Vancouver.
Nevada-based Paragon Gaming and PavCo have proposed a casino that will be open 24-hours a day, 365 days a year, with 1,500 slot machines, 150 tables and off-track betting. The development, adjacent to BC Place, would also include a three-star and a four-star hotel, and spaces for small-scale concerts, banquets and exhibitions.
The $500-million proposal, which requires the city to rezone prime downtown land, came with an economic impact assessment that sets out enticing potential benefits for the federal, provincial and city governments.
But a closer look at the numbers indicates some of the benefits may not be as substantial as initially proposed.
As well, the consultants Deloitte & Touche LLP, who provided the economic impact report, have flagged several issues for those individuals who study this proposal to raise at a public hearing for the rezoning slated for next Monday.
The Deloitte & Touche report, dated Oct. 6, 2010, holds out the promise of $285.5-million in annual economic benefits for the federal, provincial and city government. The province agrees with estimates of $28.6-million in sales taxes and income taxes, and $195.7-million in gaming revenue.
However, the numbers for the city's annual payout may not be as firm.
According to the consultants, the city will see $17.2-million in gaming revenue, $5.6-million in property taxes and another $700,000 in hotel marketing fees. While promoting the project, Paragon has drawn attention to additional revenue for the city - $300,000 for a fund to mitigate the possible negative impacts of gaming and $1.4-million for Vancouver's public art program.
Both Paragon and the consultants failed to include the full picture.
The Edgewater casino at the Plaza of Nations, which would be moved to the new location, currently sends the city $7-million in gaming revenues. The new casino would mean an increase of $10-million in gaming revenue, not $17-million.
Similarly with property taxes and the contribution to the social responsibility fund. A casino is assessed in the same category as a hotel, department store or other commercial enterprise. Alternate developments could yield similar revenue in property taxes.
Meanwhile, the $300,000 contribution to the fund to mitigate gambling problems is really an increase from the operators' current requirement to pay $200,000. Likewise, Paragon's commitment to the city's public art program is a requirement under city policies that would be charged against whatever was built on the site.
However, it is comments from the consultants themselves that raise the most questions about the promised benefits. Here's a sampling:
The hypotheses represent plausible circumstances but need not be and may not have been fully supported.
A detailed feasibility review/analysis has not been undertaken, nor should one infer that such a study has been undertaken.
Information furnished by others … has not been verified in all cases. No warranty is given as to the accuracy of such information.
We have not audited or otherwise verified the capital cost estimates associated with this project.
Deloitte & Touche set out a list of 17 general assumptions and limiting conditions at the end of their report. With the economic impact assessment on such shaky ground, how much confidence can be placed in the promise of economic benefits?
Despite Mr. Podmore's skepticism, opponents to the casino project may be quite familiar with the proposal. It seems as if City Hall will not have to wait for the casino to open in order to place the first bet.Report Typo/Error
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