NORFOLK, Va. (WAVY) — Hundreds of millions of dollars in economic impact, and tens of millions every year for the local tax base and Virginia public schools — those are the economic projections for the Norfolk casino that was approved by nearly 2-1 Tuesday at the ballot box.
The Pamunkey Indian Tribe plans to operate the $500-million complex, which would be located next to Harbor Park. They say by year three, it will generate between $350 and 400 million in gross revenue. Those numbers come from a consultant’s study — and their representative says they take into account that Portsmouth can also build a casino less than ten miles away.
“We weren’t gonna make a promise and then say, ‘Oh we didn’t know that Portsmouth was gonna pass [its referendum],’ and then scale back,” said spokesman Jay Smith.
Smith says their numbers are more conservative than Norfolk’s own economic impact study.
He says the casino, hotel, restaurant and entertainment venue will be purchasing nearly $100 million each year in food and supplies — and the 2,500 permanent jobs created will mean $750 million in overall impact to the Hampton Roads economy.
A local economist has his doubts, saying casino forecasts are often on the high side.
“There are enough casinos that have failed to make us wonder whether Hampton Roads could sustain a casino in Norfolk and a casino in Portsmouth,” said Bob McNab, professor of economics at Old Dominion University.
The operators of a casino in Pittsburgh that opened in 2009 had projected similar gross revenues. A study found that in the first ten years of operation, the Pittsburgh casino had yet to meet its revenue targets. The Rivers Casino’s best year so far was 84% of projections, its worst about 53%, according to the study.
Smith says that won’t be the case in Norfolk because their study is even more conservative than one commissioned by the City of Norfolk — taking into account that a casino can now be built less than 10 miles away in Portsmouth.
McNab says true economic impact for a casino comes from dollars brought into the area from outside.
“If all you’re doing is circulating dollars from Virginia Beach to Norfolk, then Hampton Roads doesn’t see a very large economic impact,” McNab said.
“Part of the reason we like this location is that it’s right next to a an Amtrak station, it’s right off of the interstate so it’s gonna be easy access,” Smith said. “We are going for a destination resort-casino. That is absolutely who our target audience is.”
Hiring is expected to begin in December, with ground breaking in the spring and a completion date in late 2022.
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