In an 8-1 vote, the Danville City Council on Tuesday evening approved changes to the agreement with Caesars Virginia that solidifies an investment nearly double what was originally planned in 2020, but dials back jobs and moves a planned stand-alone entertainment center into a multipurpose space.
“I just don’t like changes when we are already in the game,” Council member Madison Whittle said before the vote.
“All of these things you thought you were getting from Caesars, you are getting today,” Caesars Virginia General Manager Chris Albrecht said addressing council. “And we will open before the end of this year.”
Danville City Manager Ken Larking said the changes to the agreement — in the works between casino leaders, city officials, attorneys and consultants — were mostly routine.
According to council member Lee Vogler, many residents were concerned about the elimination of a stand-alone entertainment venue, something that was part of the casino referendum passed in November 2020.
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“A big part of what our voters got behind was I think that entertainment aspect,” Vogler said, noting that some people may never set foot inside the casino space, but would go for the “big events” coming in.
“You are still getting Caesars Entertainment,” Albright said, highlighting the company name. He said it’s become the norm to have a multipurpose space to provide concerts, comedy shows, boxing events and what he called “world-class meetings.”
The temporary Danville Casino facility — a giant tent-like structure that opened almost a full year ago — is drawing more than 100,000 visitors a month.
“It’s not going away,” Albright stressed of the entertainment space that will still have 2,500 seats. In fact, they are in talks now to settle on the first acts that will perform in the first quarter of 2025.
Larking said the city looked to consultants and lawyers versed with casino operations when making these changes. Those consultants said it’s considered best practice to have a multipurpose space.
It also meets the “spirit” of what was presented when Caesars won the bidding process to be the city’s casino operator four years ago.
The original minimal investment of $400 million has ballooned to $750 million, something spelled out in the updated agreement.
The jobs likely won’t be as many as first promised, however. In 2020, the number of workers was pegged at 1,300. The agreement adopted Tuesday night puts it in a range of 900 to 1,300.
“A lot has changed in our country and our community since the pandemic,” Larking said.
“The workforce has changed,” he continued. “The industry has had to innovate.”
Simply put, it doesn’t take as many people to get the job done now.
On a positive point, Larking said since many employees are tipped, having slightly fewer workers will benefit. If they had 1,300 employees who shared the same tip pool, there would be less compensation.
When it comes to the actual wages, Caesars still agrees to pay at least $15 an hour, but the city upped the agreement should the federal minimum wage rise in the future. In that case, the casino operator must pay 125% of the federal minimum wage.
“Basically it’s better for the employees,” Larking said.
The city manager reviewed the competitive process Danville used to pick Caesar’s. Seven operators competed.
“Out of that process we got the best development agreement, I believe, in the state of Virginia,” Larking told council members.
He said he asked a consultant what cities do when a casino development infuses an extra $40 million into a budget, like the one in Danville.
“There is no example of another city that has an agreement like that,” Larking said he was told.
With the increased investment, revenue also will jump from original forecasts from the real estate tax side.
In the end, the revenue Danville will receive from the casino once it’s fully built is about the same as what Boston gets, Larking said consultants have said.
“We’re a little bit smaller than Boston,” Larking said with a smile.
He said “Danville hit a home run when it came to the development agreement.”
In direct payments alone, the city has received north of $40 million from Caesars Virginia. That includes $15 million in upfront money, $5 million for the land and at least $20 million from gaming revenues.
That doesn’t account for the increase in the hotel or meal taxes from more visitors in the River City.
“There’s a lot of indirect tax benefit,” the city manager pointed out.
Whittle questioned changes to language surrounding gross or net revenue. Larking explained he was the one who made that request to alight the agreement with Virginia law on how it determines casino revenue.
“I am very comfortable with what is being presented,” Larking explained of the changes to the agreement. “It is something I highly recommend we do.”
Council member Sherman Saunders likened the alterations to building a house.
“Things come up that you did not expect and you modify those changes,” he said. Sometimes there are additions and sometimes subtractions.
“But I think that Caesars has been very straight with the city from Day 1,” Saunders said. “Just know that we are making sure that everything is going to be just as we planned to be.”