Casino news source: Delco Times - http://www.zwire.com
A month into its operation, has Harrah’s Racetrack and Casino been a boon or bust for the city?
By ALEX ROSE, arose@delcotimes.com
02/25/2007
One month into a new era of legalized gambling, Harrah’s Chester Casino and Racetrack is already starting to benefit some businesses, though others aren’t so sure the roll of the dice with the gaming giant is going to pay off with a positive impact.
"I haven’t heard anyone say it has been good for them," said Darrell Jones, president of the Chester Chapter of the NAACP and point man for a group looking to draft a community benefit agreement with Harrah’s.
"I haven’t seen any benefits as far as the community," said Jones, noting traffic for the casino is mostly directed along Route 291, barely skirting the city.
One place that’s definitely begun to feel the pinch is New Jersey. While gaming revenue for Atlantic City’s casinos was up 4 percent last year over 2005, a recent Associated Press report puts overall revenue at Atlantic City casinos this year down nearly 3 percent from 2006, with slots revenue dropping 7.2 percent.
"..G)aming experts are predicting a yearlong drop of 5 percent or more as competition with other states heats up," according to that report.
In Delaware, the state’s Economic and Financial Advisory Council also is forecasting a $3.2 million drop in the government’s share of slots revenue within the next two years.
Some Chester businesses along the Route 291 corridor, meanwhile, have seen business going up slightly. Bob Ginn, owner and operator of Ginn’s Restaurant and Bar, about a minute by car down Route 291 from the "racino," said he’s seen a few new faces since slots operations began at Harrah’s in January.
"Very little traffic is coming down 291, but the traffic that is coming down 291, we’re seeing some of the trade from there," said Ginn.
"We do generally pick up a few," said his nephew and business manager, Joe Harvey. "They say they’re on their way to Harrah’s or just came from Harrah’s. Some ask for directions, come in and have a drink while they’re here."
Ginn has been building up his business since he acquired it eight years ago, and the property now features a martini room for private functions and a mixologist to compete with the casino’s specialty drinks. A disc jockey also will soon be spinning records for the contemporary crowd Sunday evenings.
"We’re trying to prepare for things they might get at the casino, but they can get it at our place now as well," said Harvey.
B. Cottman, who sells winter wear from a folding table on Avenue of the States in downtown Chester, said he hadn’t seen any new traffic .
"All the traffic’s going down to Harrah’s," said Cottman, who theorized the casino would not only fail to invigorate local businesses, it would actually hurt them.
"It’s going to end up robbing the economy because Harrah’s does business in Chester," he said. "It’s going to rob the city. Look at Atlantic City. The only (business) district they have is the casinos."
Around the corner, sandwiched between closed-down storefronts, a business owner who declined to give his name said the city has been going "down, down, down," since he opened his store 16 years ago.
Though he is only a few blocks from the casino, he said he sees no traffic on his street. He said he more or less breaks even just selling lottery tickets, but the store likely won’t be there more than a year from now.
Cheryl Stevens, owner of Cheryl’s Southern Style Restaurant and Catering on Welsh Street, said she has seen a slight uptick in business, likely due to her proximity to the SEPTA station across the street.
A ticket agent there, who declined to give her name, said she had definitely seen an increase in customers passing through from points outside the city, many of them seniors.
Stevens said she hopes, as do many small-business owners, that the warm weather on the horizon will bring with it more customers. She’s even thinking of expanding her hours during weekend evenings, when she said she sees most of the increased foot traffic.
Some, like Richard Wilcox, owner of Phatso’s Bakery, already have a direct connection with the racino. Wilcox supplies the Club Cappuccino coffee shop in the casino with fresh-baked goods, but he’s also seeing new business coming back to his Welsh Street location.
"Our customer base is starting to change -- we’re getting a lot more new faces coming in," said Wilcox. "I would attribute that to the opening of the casino. People that had been there had some of our product from Club Cappuccino, so they found out where they can get some of the product from there."
Wilcox isn’t sure yet what percentage of his business comes from casino sales, or what he will ultimately supply them with -- right now, both are still waiting for the numbers to settle as Harrah’s figures out their customers’ tastes -- but Wilcox is confident he has a solid business relationship there.
"Well, I should hope so," he said. "I don’t think they’re leaving anytime soon, and I’m not going anywhere, so it should be a long-term business relationship."
While some are only just now getting a taste of the peripheral business Harrah’s draws in, others, like Italian Brothers Fifth Street Deli, have been able to cash in since casino executives began showing up about a year and a half ago.
"Harrah’s has been very good for us," said the owner, Jimmy, who only gave his first name. "We get a lot of business off Harrah’s. ..I know all the executives. They order all the time."
But Jimmy wasn’t convinced the opening of the slots parlor heralded a new beginning for Chester’s downtown. With "big box" stores like Target as the main competition these days, it’s simply a different business climate than the era before the city’s economic downturn, when small boutiques and specialty stores flourished.
"It’ll never be the same like it was down here," he said. "It’s a whole different ballgame."
Meanwhile, economic development in the city continues, and might soon bring in some new tax-ratable business. (While Harrah’s will pay $10 million annually to Chester and $6 million to $7 million annually to the county, it lies in a Keystone Opportunity Zone, and is therefore exempt from most taxes until 2013).
Teres Holding Co. LLC will begin demolition in June of several Widener University-owned buildings to make way for a $50 million development project along Providence Avenue between 14th and 16th streets, slated for completion by September 2008.
The project will house a Chester Police substation and is looking to bring in a full-service bank, a 24-hour convenience store, a bookstore, a coffee shop, a theme restaurant, apartments, offices and a boutique hotel.
According to a release from Widener, revitalization of the area will generate an estimated $1.8 million in real estate taxes for the city and Chester Upland School District over 10 years, plus more than $800,000 in earned-income tax and $600,000 in business privilege taxes.
Ahsan Nasratullah, chief executive officer of Teres, said the city has a lot of big assets that, by and large, have simply been overlooked.
Chief among them is Widener University, the main campus of which lies next to the development site, and Crozer-Chester Medical Center, which is also nearby. Both bring in thousands of potential customers every day, said Nasratullah -- all the development company has to do is convince businesses they’re worth catering to.
In order to do that, said Nasratullah, you need to develop a large portion of land with an open, mixed-business system that allows the risk of entering this particular market to be spread out.
"You really do a top-notch design that establishes the benchmark, that this is where we want to be, and people see the vision," he said. "It’s not just us that would develop that road, but we would expect that an open design would invite other people to come in."
"I would think that at some point, when Harrah’s is running at peak operation, a group of entrepreneurs would look at the central business district," said city Councilman Monir Ahmed. "I think a lot of it is going to depend on the success of the Widener project, and I have no doubt that it is going to be successful."
But when that comes, he said, local merchants might have to re-think their marketing strategies to stay competitive -- while urban wear is fine, he said, you only need so many pairs of jeans.
"I look at Harrah’s as the anchor for other businesses that are here," said Councilwoman Marrea Walker-Smith. "I think what we have to do is find a way to connect Harrah’s to the existing businesses here, and I think that’s going to take some creative marketing."
As head of the city’s Department of Public Safety, which also has jurisdiction over licenses and inspections, Walker-Smith said she has already seen a high level of interest in the central business district from potential developers, and some investors are already snapping up properties along Avenue of the States.
"The infrastructure is what you start with, then one success builds on another success and you get a little economic momentum, and that’s where I’d say we are now," said David Sciocchetti, executive director of the Chester Economic Development Authority.
What Chester began doing, said Sciocchetti, was playing to its strengths -- especially that of geography.
With access to several major transportation systems and by virtue of being in the middle of major metropolitan areas along the eastern seaboard, Chester’s location is what would be termed its biggest "competitive advantage" in the business world, he said.
"For a period of time, these advantages were just bottled up due to missing pieces," he said. "It took a lot of time to put those pieces in place."
But Chester doesn’t have the luxury of relaxing just yet, said Sciocchetti.
"I wouldn’t say we’re King of Prussia or Radnor or places where you don’t have to keep working hard at it," he said. "Right now, a lot of hard work is starting to pay off, but we have to keep working hard."
Sciocchetti said there are still a couple of places in Chester that can accommodate large projects like the Wharf at Rivertown and Harrah’s.
"I’m hoping we’ll develop a couple more big projects and then hopefully a lot of in-fill," he said. "Things go in cycles and I think we’re in a positive cycle right now, so we’re going to get as much going as we possibly can." |
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