Boston Mayor Marty Walsh played his cards well by withdrawing his opposition to the $1.7 billion casino being built in Everett in exchange for an extra $6 million in annual payments over 15 years from developer Steve Wynn. But what will area homeowners be dealt?
Experts say is casinos are a mixed bag of benefits and liabilities for area homeowners.
The $30 million in one-time payments Wynn will be making to the city of Everett and the projected $25 million in annual property taxes is a nice pair of benefits for the city, but studies show it isn’t a winning hand for everyone at the table.
According to a recent study commissioned by the National Association of Realtors, which studied the impact of 358 casinos on their communities, some Everett-area homeowners can expect to see their home values decline.
“In general, externalities of congestion and other social costs appear to have a negative impact on home values in the immediate area of a casino,” the report reads.
According to the report, there are many variables than can affect just how much values can be impacted, but one study concluded that homes within 1 mile of the casino could see a 4.6 percent drop in property values.
Fortunately, and by design, there are relatively few residential properties within a mile of the proposed casino site, but there are some within a mile-or-so radius in Everett, Medford, Somerville and Charlestown.
The median sale price of a single-family home in Everett was $307,500 in 2015; in Somerville, it was $625,000; in Medford, it was $450,000; and in Charlestown, it was $887,000, all according to data from The Warren Group, publisher of Banker & Tradesman.
A 4.6 percent decline in home values in any of those communities would be significant, especially now, when values in most Greater Boston communities are expected to rise.
Professor Albert Saiz, director of MIT’s Center for Real Estate, confirmed the bad news for homeowners closest to the casino site, but suggested those a little further away could see small increases in home values.
“Studies typically find there is a bit of a negative impact on residential properties in the immediate area,” Saiz said. “Further away, there isn’t a lot of impact, and 3, 4, 5 miles away they might see a bit of a positive impact.”
Source: The Warren Group and NAR
Everett Mayor And Voters Go All In
Still, in a 2013 referendum, Everett voters approved the agreement between Wynn and the city by an overwhelming majority. Of the votes cast, 86 percent were in favor of the deal that would allow Wynn to build what was then estimated to be a $1.2 billion project.
Everett Mayor Carlo DeMaria said he sees the casino as a boon for the city and hasn’t heard any concerns about decreasing property values from residents.
“I really haven’t heard any negative talk from our residents,” DeMaria said. “I’ve noticed both residential and commercial values in Everett are going up. That’s possibly due to the casino and the jobs it’s going to bring, but also possibly other factors.”
DeMaria said the casino project has been a catalyst for other initiatives that will revitalize the city, including increasing public transportation options to Boston, increasing walkability and making better use of underutilized lots, all of which he thinks increase value to Everett homes.
“This isn’t like Atlantic City where you have no other venues; this is Boston,” DeMaria said. “We’re a world-class city. People want to live here. We have the best hospitals in the world, the best universities. People are very happy. I see [the casino] as a very positive development.”
Location, Location, Location
The NAR study noted that the local economic impact of a casino is largely dependent on its location. The more successful the casino, the more money it pays in state and local taxes. Casinos in urban areas generally don’t do as well as those in rural areas, according to the NAR study.
“Indian casinos in very rural areas are frequently cited as generating significant local economic benefits, largely due to the depressed nature of the local economy,” the report states. “This has not generally been the case for urban casinos.”
Another barrier to profitability is competition. Foxwoods, the first casino in the area, has recently reported a decline in revenue due to both the economy and increased competition. The Wynn casino will also compete for gambling dollars with Plainridge Park in Plainville, Massachusetts, Twin River and the Newport Grand in Rhode Island, Foxwoods and Mohegan Sun in Connecticut and the new MGM Grand in Springfield, which is expected to open in 2018, the same year as Wynn’s.
“Casinos that are close to each other tend to split the available business, reducing profitability,” the report says.
For her part, Century 21 North Shore Office Manager Maria Silviera thinks the casino will boost property values in the city, despite concerns.
“I believe the casino coming to Everett will be good for property values,” Silvieria said. “I’m not concerned about them going down. Honestly, I think the impact will be positive. Since the news came that the casino is coming to Everett, values have gone up. People are concerned about traffic, but people are seeing more good possibilities than bad possibilities.”
Revenue Predictions Are Unreliable
The degree of positive economic impact a casino has on a community depends on how profitable it is, and that is difficult to predict. Plainridge Park had a strong opening last summer, but monthly revenues have fallen every month since then, according to the most recent a Massachusetts Gaming Commission Report.
It’s not just the number of customers, but where those customers come from that counts. If an Everett resident who works in Everett spends money in an Everett casino, that doesn’t bring money into the local economy.
“To the degree that a casino can attract outside money from a wide geographic area, the level of prosperity and tax revenue of the immediate jurisdiction will be enhanced,” the NAR report says.
Wynn has also agreed to give Everett residents hiring preference for construction and casino jobs. However, the report also points out that construction jobs are short-lived and casino jobs tend to be lower-paying.
Saiz said he thinks the site was well-chosen to minimize the impact on residential properties; it is an industrial site along the Mystic River, wedged between routes 1 and 16, far from most of Everett’s residential neighborhoods. Still, as with any large attraction, there will be traffic.
“The employment effect will be positive,” Saiz said. “The job impacts will be positive and more diffuse. Traffic will be impacted within 1 to 4 miles of the site. The design is super important with regard to traffic. Also, there will be noise.”
Editor’s Note: This article has been updated with the correct spelling of the mayor of Everett’s last name.
