Harrah's Philadelphia Casino & Racetrack faces hefty tax bills
CHESTER For the first time since it opened seven years ago, Harrah's Philadelphia Casino & Racetrack is getting hit with a property-tax bill.
And what a bill.
If it stands, the $5 million payment to three entities will make the casino not just the biggest taxpayer by far in the city of Chester, the Chester Upland School District, and Delaware County, but one of the biggest in the region.
The county Board of Assessment rejected an appeal from Harrah's last month. The company now faces a Friday deadline to file a lawsuit fighting the $218 million assessment of its 65 acres on the Delaware River.
A casino spokeswoman did not return calls last week, and a lawyer who has represented Harrah's declined to discuss its plans or potential court arguments.
But Harrah's could take its lead from other casinos in the area. Parx Casino in Bensalem and several casinos in Atlantic City are among those that have fought to have their taxes reduced, asserting that they were not as profitable as anticipated, or that the buildings had been assessed at more than their fair market value.
The added tax revenue would be especially important in long-struggling Chester, where Harrah's owes $1.6 million in property taxes this year.
The money could provide a significant boost - more than 20 percent - to city coffers. Chester collected $7.2 million in property taxes last year, City Councilman Nafis Nichols said.
"We're able to loosen up and breathe a little easier" with the money from Harrah's, he said.
The Chester Upland School District does not release its 2014-15 tax rate until July, but it would collect $2.8 million from Harrah's under its current tax rate.
Harrah's Philadelphia Casino & Racetrack was part of a Keystone Opportunity Zone that expired at the end of December.
To attract economic development to Chester, the tax-relief program exempted properties from real estate taxes. The new assessments for those properties total $21 million, in addition to the $218 million for Harrah's, Delaware County Assessment Manager John VanZelst said.
VanZelst said he expected Harrah's to appeal its assessment, which would take more than a year to resolve. The value of the casino itself would be at issue, ultimately determined by a judge.
Property owners often hire outside appraisers to provide second opinions of assessed value and present those findings in court.
"Since we're talking a lot of money and [Harrah's owners] think they have a strong case, they're probably going to take it to court," VanZelst said.
Joseph O'Brien, the lawyer who represented Harrah's before the Board of Assessment, said he could not comment on whether he would file an appeal. He declined to say what he thought would be an appropriate assessment for the casino.
"Obviously, we felt it was significantly lower than what the county had asserted," he said.
The county has already sent the casino a 2014 tax bill for $1.22 million, which Harrah's must pay even if it files an appeal.
"As far as I know, they lost and we sent out a bill," VanZelst said. "So until I'm instructed otherwise, the bill stays that way."
Beyond property taxes, state law requires casinos to turn over a portion of their revenue from slots and table games to local governments. Harrah's gave $10 million to Chester and $5 million to Delaware County last year, according to state records.
Harrah's would not be the only casino in the region to take its property-tax fight to court.
Parx is fighting its $54 million assessment in a court appeal filed in 2011. Under its current assessment, the casino owes $2.3 million in taxes this year, according to county records. It paid its 2011, 2012, and 2013 taxes under protest, according to a bond-offering document from the Bensalem Township School District.
In Atlantic City, casinos have successfully appealed tax bills, arguing that gaming revenue had fallen substantially as competition opened around Pennsylvania in recent years.
Valley Forge Casino Resort has a smaller property-tax bill; it owed $270,000 in 2014, according to Montgomery County assessment records. SugarHouse Casino in Philadelphia has not appealed its assessment of $150 million.
Harrah's has not taken steps toward fighting its assessment in the city of Chester, which has a different assessment process than the county. Its $52.5 million assessment in Chester translates to a market value of about $210 million - lower than the $294 million market value of the county's assessment.
As tax breaks expired in Chester, the Delaware County Council extended the Keystone Opportunity Zone for some properties, including land surrounding PPL Park where development plans have not materialized. PPL Park is still exempt from taxes because it is owned by a government body.
Some other property owners that lost their tax breaks also appealed. Widener University's Technology Park won the largest adjustment before the county Board of Assessment, VanZelst said; its assessment was reduced from $4.2 million to $2.4 million.
Until this year, none of top 15 taxable properties in Delaware County was in the city of Chester, which for years lacked new private development.
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