Developers behind a plan to transform Omaha’s Horsemen’s Park into one of Nebraska’s first casinos are counting on the city to pony up $17.5 million in tax incentives to bring the project over the finish line.
A $220 million plan by Warhorse Gaming Omaha — a subsidiary of Ho-Chunk Inc., the economic development arm of the Winnebago Tribe of Nebraska — calls for a significant renovation and expansion of the current Horsemen’s campus near 60th and Q Streets.
The project would create a “dynamic casino, racing and entertainment complex” that would include 1,200 gaming machines, live and simulcast horse racing, gaming tables and a stage for live entertainment, as well as a sports bar, food hall, coffee shop and central bar area, according to a city document.
Renderings of the proposed Warhorse Casino show a colorful, modern facility that would include a draft house, terrace and VIP lounge.
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Construction is expected to begin in mid-summer and could wrap up by September 2022.
In November, roughly two-thirds of Nebraska voters approved constitutional amendments to allow casinos at the state’s six licensed horse-racing tracks and devote some of the money to a tax credit for property owners.
The ballot campaign was bankrolled by Ho-Chunk, and its success paved the way for the group to pursue casinos at tracks in Lincoln, South Sioux City and Omaha.
The Omaha Planning Board on Wednesday unanimously recommended approval of a $17.5 million tax increment financing request for the project. The request, which represents 7.9% of the casino’s estimated total cost, soon will go before the Omaha City Council for final approval.
Tax increment financing, known as TIF, is a popular, sometimes controversial redevelopment tool based in state law that allows developers to take out a loan to help cover eligible redevelopment expenses in areas that have been deemed blighted.
The loan is paid back, generally over a 15-year period, by using the increased property taxes that are generated on the new development. During the TIF period, the property owner continues to pay a portion of property taxes based on the valuation that existed before any improvements. After the TIF loan is repaid, property taxes collected on the higher-value, improved property then start flowing to the tax rolls.
Project leaders expect to spend about $6 million on public improvements, including storm water drainage and utility work, according to city documents. They’ll also make improvements along Q Street, including an expansion from two lanes to three and a sidewalk connection from the casino to the nearby Keystone Trail.
The casino also would have more than 1,400 paved parking stalls, a Planning Department memo states.
Lance Morgan, CEO of Ho-Chunk Inc., said in an interview that those public infrastructure improvements will help to increase access to the area and safety of the area.
“Those are the kinds of things that make a lot of sense from a TIF standpoint,” Morgan said.
The casino is expected to “directly and indirectly” create about 2,400 jobs, about 520 of which will be permanent full- and part-time jobs on the site, according to the memo.
“I think that the focus has to be on the jobs that we’re bringing to the community — the significant tax revenue we’re bringing to the community,” said Lynn McNally, executive vice president of the Horsemen’s Benevolent and Protective Association. “And we’re here to stay.”
Horsemen’s Park has operated from its existing site since 1998. An existing 45,000-square-foot building will be renovated, and a clubhouse will be expanded to 20,600 square feet.
The TIF request faces opposition. Pat Loontjer, the executive director of Gambling With The Good Life who for decades has led the charge against legalized gambling in Nebraska, said she thinks the TIF request is an abuse of the program.
When weighing TIF requests, the Planning Board considers several factors, including whether the project would be economically viable without the incentive. In the Warhorse Casino’s case, “the return on the investment would be unacceptably low due to the significant project costs,” and thus wouldn’t occur without aid, according to the memo.
Loontjer said she doubts that a casino developer needs such an incentive.
“They don’t need a handout when you’re talking millions of dollars in profit,” Loontjer said.
“It’s obvious this is going to proceed, irregardless of if they get the (TIF request),” she said.
Among other requirements, projects that receive TIF must be located in a blighted area and must meet objectives of the city’s comprehensive plan. The Warhorse project met all TIF requirements, the Planning Department memo said.
Brendan Bussmann, who works for a Las Vegas-based gaming and hospitality consulting firm, was surprised to hear of a casino requesting a tax incentive.
In his 17 years in the industry, Bussmann said he could recall only one other casino project, in Las Vegas, that had sought a tax break. Officials “basically laughed them out of the room,” said Bussmann, who is director of government affairs for Global Market Advisors.
Casinos typically only ask for approval to operate in a city, and nothing more, Bussmann said. He said he was pleased that Nebraskans who want to gamble will soon spend their dollars in-state, but he said he found it “hypocritical” for the developers to ask for tax relief after they helped sell the constitutional gambling amendment on the idea that it would provide property tax relief.
“I think it’s disingenuous to ask for your own property tax relief in the same process,” Bussmann said.
McNally said the project will benefit the metro area for years to come.
Said McNally: “It’s going to bring (new opportunities) to the city of Omaha and Douglas County.”
This report includes material from The Associated Press.
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