Norfolk manager suggests using revenue from casino to help ‘mitigate impacts’ on businesses

Norfolk

NORFOLK, Va. (WAVY) — The City of Norfolk has finished a 34-page report on the fiscal and economic impacts of the $500-million casino proposed to be built near Harbor Park.

The report — which was sent to City Council members Tommy Smigiel Jr. and Mamie Johnson by City Manager Chip Filer because they are co-chairs of the Mayor’s Committee on Gaming — has been requested by those who are skeptical of the deal and its promised impacts on the region.

Staff estimates annual tax revenue from the resort casino proposed by the Pamunkey Indian Tribe in King William County will range from $24.8 to $44.5 million. They gave a range because the final scope and scale of the project is still uncertain.

Plans for the $500-million casino near Harbor Park include a 300-room full-service hotel, steak and seafood restaurant, sports bar and grill, cafe, spa and 2,500-seat entertainment venue.

The report found more hotel rooms are needed. The report didn’t find there would be any negative impacts on the existing hotel industry.

“One reason we are confident in this claim is that hotel revenue has increased in Norfolk by 46% over the last 5 years. This increase is being driven by increasing average daily rates and new hotels particularly in downtown Norfolk. Indeed, the downtown Norfolk hotel sub-market needs additional hotel rooms. So, the additional of 300 rooms at the casino will provide needed supply,” the report reads.

Meanwhile, for existing restaurants, “there are likely to be establishment closures with the
opening of the resort and casino. Whether those closures are truly caused by the opening of the resort or merely correlated with the opening will be unclear.”

Staff is recommending some of the new gaming revenue be used to improve “overall market conditions” for businesses downtown to help “mitigate the impacts” the new casino could cause.

Smigiel said that could come in the form of money for small business grants.

What improvements the market conditions would look like is unclear.

Overall, the staff report says the minimum amount of revenue generated by the project — $24.8 million — would still offset the amount of any expenses the city would face.

“Staff see no scenario where the entire stream of new tax revenue from the casino hotel would be used to offset the additional expenses. Thus, staff predict Norfolk will realize a significant and positive fiscal impact even in net,” the report reads.

The tribe has made a $150,000 donation to help attract a full-service grocery store in the city’s St. Paul’s neighborhood near the project, win or lose at the ballot box. The area is currently a food desert after its grocery store, a Save-A-Lot, closed in June.

The project has faced scrutiny since its proposal.

Whether the plan comes to fruition is up to a voter referendum Nov. 3.

Groups opposed to the project called for an investigation after flyers with the pro-casino logo were given out with food at area food pantries. They were printed by the “Yes Norfolk Referendum Committee,” which is solely funded by donations from the Pamunkey tribe.

Groups in opposition have also cited other reasons for their scrutiny, ranging from effects on the environment and small businesses, to confusion about various parts of the deal.


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