Casino developer could get tax break; land was granted 10-year abatement
10/12/2009The proposed developer of a Toledo casino assured an audience recently that his company would not seek any tax incentives on the Miami Street site for the new casino.
But that may not stop Penn National Gaming Inc. from getting a tax abatement anyway if Issue 3 passes on Nov. 3.
"We are not here looking for a handout in this community, looking for [tax increment financing], or STAR bonds, or any of these types of tax advantages that maybe other businesses come into the community and seek," Eric Schippers, senior vice president of Penn National, declared at a forum attended by local business leaders this month.
The forum was part of an effort to promote passage of the constitutional amendment Issue 3, which would authorize four casinos in Ohio, including one in Toledo.
Penn National has committed to spending at least $250 million for a casino at 1968 Miami St. in East Toledo, a former industrial brownfield site.
The property was awarded a 10-year tax exemption on increases in the value of the land on March 17, after the Ohio Environmental Protection Agency issued a covenant not to sue.
Under the exemption, the value of the land is held flat for 10 years, although the construction improvements would be taxed at their full value.
River Road Redevelopment bought the property in 2006 for $565,000. Owner Bradford White of Middletown, Ohio, would not disclose the price that Penn National agreed to pay for the land under its option to purchase.
The two parcels totaling 44 acres were listed with Signature Associates for $2.27 million.
Lucas County Auditor Anita Lopez said that because the exemption applies only to the land, any improvements on the property would be subject to the full property tax, which could be substantial.
"If they construct something of any magnitude of what we've seen in Detroit or Indiana, it is going to be a fairly large taxable building," she said.
The parcels currently generate $17,324 a year in property taxes with no improvements at all.
Penn National has provided no architectural drawings, but Mr. Schippers said Penn envisions a gaming floor on one level. No hotel is planned.
Penn National Gaming, which also operates Raceway Park in Toledo, is one of two backers of Issue 3.
In a memo dated March 17, state Tax Commissioner Richard Levin declared that the property had received a "covenant not to sue" from the Ohio EPA and that it would have a 10-year exemption on increases in the value of the land.
At the time, the commissioner said the owner had a 60-day window in which to decline tax exemption.
Mr. White said the tax abatement on the property value was created as an incentive to get people to take risks on land that was costly to clean up.
"I wasn't in a position to turn down the abatement order," Mr. White said.
He did not rule out the possibility that he would rescind the abatement, if that's even possible, but said he would not do anything to jeopardize his ability to develop the property if the casino plan falls through.
Louis Bauer, a former Rossford mayor, said Mr. Schippers was "misleading" in suggesting that he would not seek tax advantages for developing in Toledo.
Bob Tenenbaum, a spokesman for the Ohio Jobs & Growth Committee promoting the issue, said the tax exemption was under control of the property owner, not Penn National.
"It would not have been their option to turn down this property tax exemption," Mr. Tenenbaum said.
Contact Tom Troy at:
tomtroy@theblade.com
or 419-724-6058.