The City’s Host Community Agreement (HCA) was signed and reviewed by residents such a long time ago, but with the opening of Encore on June 23, that agreement was triggered into action – and it will mean $25 million in payments to the City over the next fiscal year.
Chief Financial Officer Eric Demos said the HCA is now in effect, and he is actually expecting a $440,000 payment within the next 30 days for the eight days the casino was open during the current fiscal years. On July 1, a new fiscal year begins and the larger payments in the HCA will take effect.
The two big pieces of that agreement include a $5 million annual payment for the Community Impact Fee, a payment that goes up by 2.5 percent every year.
The second, larger payment is a $20 million Payment in Lieu of Taxes (PILOT) that the resort will pay annually to the City. The agreement is structured to require the PILOT instead of a regular property tax payment. That payment also goes up by 2.5 percent each year.
Together, Demos said, they make up the bulk of the $25 million mitigation payment.
“Those funds will be collected quarterly and they will go to the General Fund,” he said. “They will definitely be used for property tax relief to the residents and they’ll help us build our reserves back up. We had to draw down our reserves with the school funding issues. It’s important we start building our reserves back up, but we also want to make sure there is property tax relief for residents and businesses.”
Payments, he said, are due on Sept. 30, Dec. 31, March 31 and June 30.
In addition to the two big items that are now coming due, the City also expects to collect several million dollars on hotel excise taxes and meals taxes.
Demos said that used to be estimated at about $5 million, but he believes it will now be more like $8 million.
“I want to see how they do and how they hit their revenue targets between now and the setting of the tax rate,” he said. “From this point, $6 million seems conservative.”
Those payments go to the state and then are returned to the City on the “Cherry Sheet” each year.
Another source of revenue is the new Parking Lot on Lower Broadway across from Encore that the City will operate for three years.
“That will be in excess of $5 million to $6 million per year as well,” he said.
That money, however, will be dedicated to transportation – particularly to some of the transportation initiatives Mayor Carlo DeMaria has been talking about recently, such as “Gold Standard” Bus Rapid Transit on Lower Broadway.
Additionally, a separate payment – not associated with the City – goes to the new Everett Citizens Foundation and is meant for community initiatives.
Catherine Denisi of the Mayor’s Office has been heading up that effort, and the Foundation has been seated and they have had three meetings.
Denisi reported the Foundation will be releasing applications to the public on July 17, giving a two-month window to apply before the September deadline. The Foundation members will review the application and make grant awards from the $250,000 payment from Encore. Their next meeting will be in August.
Demos said the resort is going to be a major shot in the arm economically for Everett, and a great deal for taxpayers.
“The resort is going to be an economic engine,” he said. “It is also a big win for the taxpayers of Everett and for the businesses here too. It will only stimulate more growth and development. A project like this is transformational.”