(16th in a series of posts on City Government)
The Sands is changing hands. New Owners Wind Creek coming soon.
To tell the truth, the Sands has been invisible to me.
The Gadfly was aware of the hubbub surrounding its approval and construction. But did not feel especially involved one way or the other in the decision.
And he has not been involved since it opened. Though a regular at ArtsQuest/SteelStacks events, Gadfly has never been to the casino, never been to a show – maybe once or twice to the outlets, never even been caught in a traffic jam in the vicinity.
To tell the truth, Gadfly is hardly aware of the Sands’ existence.
So how should I feel about the fact that so soon after it started, the Sands is getting a new owner?
As I read the news stories yesterday, I could not help but remember CM Callahan’s claim at Council a couple of weeks ago that the Sands brings in more money for the City than the Bethlehem Steel Co did in its heyday.
He made me think that not only is the Sands invisible to me but the “good” it does for the City has been pretty much invisible to me as well – tax dollars that fund public services.
So maybe that’s where his thoughts should go when wondering how he should feel about the entrance of a new owner.
Because some serious money will be generated. One-time, not continuing. But a wind-fall from Wind Creek.
The City stands to gain a yet undetermined but significant amount of money from a “casino transfer tax.”
In fact, the City provisionally included $6m income from the casino transfer tax in the 2019 budget (see p. 278 – 7th column from the left). Remember that is not a fixed number. It could well be considerably less. But the City will receive one-time income from the casino transfer tax when the sale is consummated.
Read down that 7th column and see what the City tentatively plans to spend that “extra” money on if it gets $6m.
When the exact amount is determined, the City and Council will have another conversation about the exact expenditures. But that list will give you an idea what’s on the radar.
For instance, Gadfly knows there are followers who will be glad to see $40,000 for a pedestrian bridge feasibility study and $50,000 for Rose Garden improvements.
So Gadfly guesses that he should be more aware of and appreciative of the benefit that this developer brings to the City.
Here are some links to bring you up to speed on the Sands/Wind Creek situation. Perhaps you will be amused as he is about speculation that there might be a water park on the old steel property. Now that might get Gadfly to break out some old 60s demonstrator duds and posters and take up a battle station on the Minsi Trail Bridge.
Five key takeaways: Nicole Radzievich, “What we know about Sands buyer’s plans for Bethlehem Steel property.” Morning Call, January 16, 2019.
Video interview with new owners: Lehigh Valley Live
Public comment: “What they’re saying about Wind Creek’s plans for Sands Bethlehem casino.” Morning Call, January 15, 2019.
It’s important to remember that the deed transfer tax is only paid on the value of the real estate portion of the sale of the Sands Casino to Wind Creek Casino, and not on the business value of the transaction.
For example, let’s say that of the $1.3 billion price the business value is $1 billion. That would mean that the 2% deed transfer tax would only be paid on $300 million netting $6 million in deed transfer tax. One percent ($3 million) goes to the Commonwealth and the other one percent ($3 million) gets split between Northampton County ($1.5 million) and the City of Bethlehem ($1.5 million).
We can be sure that the deal will be structured so that the minimal amount of deed transfer tax has to be paid, which will mean the actual real estate value will be the lowest that is legally possible.
The original estimate of $6.5 million coming to the City of Bethlehem was erroneously calculated on the published deal value of $1.3 billion.