Casinos revitalize towns, but future uncertain - Tuesday 12th of April 2005
Ornate black and gold street lamps line the newly paved sidewalks of Elgin???s downtown, and dozens of stately Victorian homes have been repainted in their traditional yellows, greens and blues.
From the town???s historic neighborhoods to the new Fox River walkway, Elgin has been given a fresh look since the Grand Victoria casino opened here 10 years ago. The state???s highest-grossing casino and the last to open in Illinois has poured about $250 million into Elgin in tax revenue alone.
The casino has been so successful over the years that Elgin has been able to buy parcels of land, rid them of contaminants and give them to developers ??? for free. That would not have been possible before the casino, Mayor Ed Schock said.
???We spend $4 million, we get $40 million in private investment and we get our money back in new property taxes in three to four years,??? Schock said. ???After that, everything???s gravy.???
The story is similar in Alton and Joliet, where riverboat casinos have created streams of cash for their communities.
Lawmakers authorized riverboat casinos in the early 1990s as a financial boon for decaying Illinois river towns. Local officials point to freshly paved streets and revitalized business districts as proof of gambling???s benefits, and Illinois lawmakers are talking about allowing more casinos, partly so the cash-strapped state can tap even more tax revenue.
Other cities, including Chicago, also want in on the action, hoping casinos can spur similar redevelopment and tourism.
About 10 percent of the $200 million annual budget in Elgin, about 40 miles northwest of Chicago, is money from the Grand Victoria. The city has used the cash to build a new police department, recreation center, two water parks and the downtown riverwalk. It also has repaved miles of streets, improved acres of parkland and awarded grants to homeowners and businesses to renovate their properties.
The difference between Elgin now and before the casino is like night and day, Schock said.
???Because we have committed almost all of the money to capital projects, almost everyone who lives here can see the benefits of the boat having been here,??? the mayor said.
Casino money has financed $10,000 grants to help renovate the outside of homes, improving neighborhoods that were ???really fighting for their lives,??? Schock said. Businesses can apply for grants covering 35 percent of renovation costs.
Fred Steffen got $156,000 from the city to renovate the downtown building where he lives and where his restaurant, Cafe Magdalena, is located.
???It???s a new town. The downtown, a lot of the preservation, comes from boat money,??? Steffen said.
City officials are pleased with the progress, but they have been careful not to let Elgin become dependent on casino money.
When the state raised its casino tax to as high as 70 percent in 2003, local tax revenue from the nine casinos dropped almost across the board. Casino owners also have complained about the highest-in-the-nation tax rate, saying they have no incentive to invest in the boats if they can???t make money.
???If the boat went away tomorrow, while we would miss the money and a number of projects would be slowed down, we would not have to change any of our operations,??? Schock said. ???Nothing that???s a recurring expense comes out of the boat.???
Just east of St. Louis, Illinois??? first authorized riverboat casino, the Alton Belle, has pumped more than $90 million into Alton since it opened on the Mississippi River in 1991. The city???s historic downtown, once filled with rundown, vacant buildings, has been revitalized as an entertainment hotspot. Early fears that a casino would increase crime never panned out, officials said.
???When I walked the beat down there, I was the only guy down there,??? said Mayor Don Sandidge, Alton???s police chief from 1986 to 1989. ???Now it???s stuffed every night, you can???t find a place to park. That???s all come about because of the Belle.???
About 20 percent of Alton???s budget is casino money. It has been used to pave streets, build a state-of-the-art police headquarters and replace decrepit homes. But unlike Elgin, Alton also uses casino tax revenue to cover some of its fire, police and public works payroll.
If the casino were to leave Alton, the city would be in trouble, Sandidge said.
Alton saw a nearly $1 million drop in its casino tax revenue when Illinois lawmakers raised the state casino tax in 2003. The loss forced city officials to cut dozens of vacant positions.
Sandidge hopes to draw new commercial development to Alton to build the city???s tax base and reduce that reliance.
???We???re hoping as this continues, we???ll be able to rely less and less on boat money. But with the governor???s tax on gaming, it???s pretty well killing our gaming here,??? he said.
In Joliet, economic development officials said the Empress and Harrah???s casinos have helped make the city an entertainment destination that includes a minor league baseball team and NASCAR track ??? businesses that pump up the economy and don???t rely on the casinos for patrons.
???It???s become a destination other than steel and commerce,??? said Bob Herrick, spokesman for the Will County Center for Economic Development.
Chicago Mayor Richard Daley hopes his city can reap the economic benefits of a casino soon. He has joined with business and labor groups to back plans for a casino on Lake Michigan that they estimate would generate up to $1 billion a year for the state and local economies.
South of the city, a coalition of suburban mayors hopes the Legislature authorizes a new casino in their area. They said it would be a lynchpin for an entertainment complex that would include restaurants and a hotel and draw an estimated 3.8 million visitors a year while creating $190 million in state and city taxes and 4,600 jobs.
Country Club Hills Mayor Dwight Welch, whose town is one of several potential homes for a casino under gambling expansion proposals being discussed in Springfield, said thousands of area residents now go to Indiana to gamble.
???The naysayers say that we don???t need it, but it???s already here,??? Welch said. ???We???re losing revenue and jobs.
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