PETER CONRADI/Bullet News
Niagara Falls Mayor Jim Diodati says it’s not fair for Fallsview Casino to get a 50 per cent-reduction in property taxes, and he worries how that will be viewed in the community.
“It’s a very negative thing,” he said. “It passes the burden on to the rest of the taxpayers in the community. It’s very frustrating to deal with this. We’ve been trying to negotiate with OLG for quite some time. It’s a real bone of contention.”
Diodati was reacting to news that Fallsview Casino had won an appeal and received a significant cut in its property assessment for 2013 – from $564 million to $278 million. That means the Casino will be almost $3 million less in property taxes to the City of Niagara Falls than it did in 2012, and almost $3 million less to the Region.
“I’m sure this might encourage others to launch their own appeals,” added Diodati “And when people do that it will again will be passed on to taxpayers. They are setting the stage for discontent and for a lot of resentment.”
Ontario Lottery and Gaming has argued from the day Fallsview Casino opened its doors in 2004 that the assessment was too high. It has taken MPAC this long to make the adjustment
“It’s a lot,” said Niagara Falls finance director Todd Harrison said. “We’re predicting it means we’ll be getting $2.8 million less from Fallsview Casino this year. We were expecting a cut, so we’ve been looking to identify some opportunities to offset that loss through reviewing expenditures and revenue.
“But it’s significant when you consider that our total budget is $99 million. A $2.8-million reduction is a lot.”
MPAC is the agency that assesses property values in Ontario. Owners are able to appeal the assessment if they think it doesn’t reflect the value of their property. In 2012 the average single-family detached home in Niagara Falls increased in value over the last four-year period to $221,000 from $210,000, according to MPAC.
With a business, though, the process is more complicated. It takes into account things like cash flow and revenue and the overall value of an operation. Owners are still able to appeal, though, and Ontario Lottery and Gaming has been arguing since the doors opened on Fallsview Casino in 2004 that the MPAC assessment is too high. An ongoing appeal of that assessment from 2004 to 2012 has still not been settled.
If OLG is successful with that appeal, it stands to receive a substantial refund from the city of Niagara Falls and the Region – something around $3 million from each level of government over nine years – or around $54 million in total.
Niagara Falls is fighting that appeal, and council met in-camera last Tuesday to plot its latest course of action.
Said Diodati: “No one you will speak to will agree with this type of direction. Nobody. We are happy to host a casino, but you go into a deal with a certain set of rules and an understanding, and then the rules change part way through the game. They are rules you can argue about, but have no impact on.
“There is no magic money tree out back. The bills have to be paid. And when we lose revenue they have to be paid by the rest of the taxpayers. There has to be a formula for assessing property that captures all the value. They have one of the most valuable pieces of real estate in the city. They have prime falls-view property. That’s worth a lot of money. They need to pay a fair value for it.”
OLG spokespeople did not provide explanations about why they believe the tax assessments have been too high.
Dino DiCienzo, CEO of Canadian Niagara Hotels which owns six properties Niagara Falls, said his company has appealed tax assessments over the years. He said he didn’t know what the proper assessment on a casino should be since one has never sold in Ontario. But he argues that the real issue for the Fallsview casino is not its property tax bill, but the government model under which it is forced to operate.
“The government needs to let private business get involved. When you look at Casino Niagara, they say their vision is to reposition it and reinvest. The problem is they don’t have a model other than saying they will put money into it. Then it’s hard to get them to make a decision to reinvest.
“They are always ready to cut a big cheque for the projects, but what are they doing to put money aside to reinvest? All of the assets are going to age and its not just casinos. If Casino Niagara had a private operator they would put the money back in to make sure it stays current and competitive.”
Casino Niagara is located on property between the Crowne Plaza and Sheraton on the Falls, two of DiCienzo’s hotels. Canadian Niagara Hotels leases the space to OLG. Falls Management Co. runs the two local casinos for the government.
“Where this concerns us is that the decrease in taxes gets spread over the balance of taxpayers,” said DiCienzo. “That’s pretty significant.”
About 4,500 people work at the two casino properties in Niagara Falls, which makes Fallsview Casino and Casino Niagara the No. 2 local employers behind only the District School Board of Niagara, according to figures from the Region. Niagara’s casinos took in $599.8 million in 2010-11, down from $617.9 million the previous year and $632.7 million two years ago. They had 8.4 million customers in 2010-11, 9.1 million in 2010-09 and 9.5 million in 2009-08.