SugarHouse OKs $67 million payment to city

SugarHouse Casino will pay Philadelphia more than $67 million over the next decade to partly offset the 10-year tax break granted all new construction, City Solicitor Romulo L. Diaz Jr. said yesterday.

Instead of paying no property taxes at all for a decade, SugarHouse will pay between $5.6 and $7.4 million annually over an 11-year period.

The city had insisted, as part of a development agreement to smooth the way for construction, that the casino negotiate a payment. "We have worked very hard with the community and the city to build a mutually beneficial project," SugarHouse spokesman Dan Fee said.

The tax abatement was authorized by City Council in the 1990s to jump-start new home and business construction.

The settlement does not get the city the $10 million a year in property and occupancy taxes that otherwise would be paid by each of two new casinos.

"What we're really trying to do is fix a tax revenue for the city for the next 11 years," Diaz said. The period covers one year of construction and the 10-year abatement span.

The city already was in line to receive $28 million, including $5 million for the Philadelphia School District, via host fees that are required by the 2004 gambling law.

The city's other licensed casino, Foxwoods, is disputing how much tax it owes in advance of construction for its empty lot on Columbus Boulevard in South Philadelphia. The Board of Revision of Taxes is expected to rule in the next week. Foxwoods has said it should pay $119,000 annually for the tax years 2006 and 2007, while the city says it should pay more than $1 million annually.

Foxwoods spokeswoman Maureen Garrity said that Foxwoods had not committed to offsetting the construction abatement, "but it's part of a larger conversation with the city."

Diaz testified at a City Council Rules Committee hearing on competing bills - one a zoning measure that would allow SugarHouse to begin construction, and one that would prohibit building on the SugarHouse and Foxwoods sites.

Council President Anna Verna, the committee's chair, put off a vote until September. Both SugarHouse and Casino Free Philadelphia, the city's leading anti-casino organization, claimed victory.

"The ground has shifted substantially," said Fee, who said it was progress that the bill to allow construction had received a hearing. Fee noted that a vote on Councilman Frank DiCicco's proposal to ban casinos within 1,500 feet of any homes also had been postponed.

"We consider this to be a real good day for us," Fee said.

Foxwoods, meanwhile, has asked the state Supreme Court to force the city to issue building permits immediately. Foxwoods is ready to start construction, but SugarHouse said it would not seek a city building permit until local neighborhood organizations were on board with the project.

Casino Free Philadelphia coordinator Daniel Hunter said he hoped Council would spend the summer working to find new sites for the casinos.

The neighborhood coalition paid Robert Goodman, a professor at Hampshire College in Amherst, Mass., to testify about casinos' impacts on crime and the economy.

Goodman, backed by Temple economics professor Frederic Murphy, said the casinos would siphon money from other city businesses and bring the city economic losses from problem gamblers and crime.

Goodman urged the Council to force as many concessions as possible from casinos, including finding locations, before it was too late.

"You've got a good hand - you'll get what you want to get from the casinos now," Goodman said. "I suggest you play it."

At the beginning of the daylong hearing, construction-trades workers and neighbors supporting casinos traded chants, shouts and collective stomping with their adversaries opposing the casinos, including neighbors and anti-casino groups.


Contact staff writer Jeff Shields at 610-313-8173 or jshields@phillynews.com.