When Island View Casino Resort opens a new casino, it is expected to save millions under a new agreement with the state port for waterfront acreage south of U.S. 90.
Island View currently pays the port 5 percent on gross gambling revenue of more than $25 million a year. Under an amendment to the lease, the gross would be reduced to 2 percent on revenue of more than $170 million. It would be 1 percent on revenue that exceeds $200 million.
The savings would apply to the combined gross revenue of the current and the new casino. The Port Commission approved the amended lease Tuesday, but it must still be signed. The Gaming Commission also would have to approve the project, including financing, before the casino could be built.
The north side casino grossed $167 million during the last year of its current lease, Executive Director Jonathan Daniels said. If north-side casino grosses $170 million and the new casino contributes an additional $50 million in its first year, he said, Island View would owe the port about $800,000 instead of $2.25 million because of the lower percentage.
The port sees the deal as a win because Island View said it could justify building the south-side casino only if the port agreed to the lower percentage owed on gross revenue of more than $170 million.
The casino also pays the port $1.25 million a year to lease the south side land. Island View is expected to pay the state port a total of $7.2 million in 2016, according to the port’s estimated budget, which is slightly more than the port’s combined revenue from maritime operations.
Grand Casino Gulfport operated a casino, hotel and parking garage on the south side before Hurricane Katrina damaged the property in 2005, forcing the resort to close.
Gulfside Casino Partnership bought the property in 2006, renovating a hotel on the north side and adding a casino. State law was changed after Katrina to allow casinos to rebuild north of the waterfront as long as they maintained control of the waterfront property to the south.
Gulfside rebuilt the south side hotel tower in 2015. According to the Harrison County Tax Assessor’s Office, the south-side hotel restoration, valued at $48 million, is exempt from county and city property taxes, but is subject to school property taxes.
Under a new agreement, the city and county will forgo tax collections on hotel tower improvements through 2022, county Tax Assessor Tal Flurry said. Island View has no tax exemptions on its north-side properties.
In addition, the city in 2015 relinquished to the casino segments of several streets that run through Island View’s north side parking lot. Island View is contributing $2.5 million over five years to sponsor an annual holiday light extravaganza at the city’s harbor.