As Everett voters prepare to have their say on a $1.2 billion casino proposal for their city’s riverfront, home buyers and developers aren’t waiting to see what hand they’re dealt.
Observers report brisk action in residential and commercial real estate markets in Everett, Revere, and nearby communities. Many hope to line up a winning hand before the Massachusetts Gaming Commission awards a casino license for just one site in Eastern Massachusetts.
“It’s like ‘Game of Thrones:’ Everybody is positioning themselves behind the scenes,” said Gerry D’Ambrosio, a Boston attorney who represents developers and communities north of Boston. Commercial real estate deal-making “is the most active I’ve seen it in 20 years.”
On Saturday, Everett residents will vote on whether to support or reject Las Vegas casino magnate Steve Wynn’s bid to build a gambling resort at a former Monsanto chemical plant site on the Mystic River. Perhaps later this year, Revere voters will assess a separate proposal to locate a Caesar’s Entertainment casino at Suffolk Downs near the Revere-East Boston line. The commission won’t license a casino until and unless local voters say they want it.
A casino seems to be in the cards for either Everett or Revere, D’Ambrosio said, since both stand to draw more traffic than Milford, a dark horse bidder for the region’s single license.
In Everett, median selling prices for multifamily homes are up $108,900, from $275,500 in April-June 2012 to $384,400 in the same period for 2013, according to the Greater Boston Multiple Listing Service. The median price for condos has jumped $110,000 — from $133,000 to $243,000 — over the same timeframe.
While a few investors are vying to flip foreclosed properties, most buyers are individuals and families who plan to live in homes they purchase, according to Jackie Forman, a Century 21 real estate agent who has sold property in the area for 28 years. Buyers aren’t expecting a casino to drive up home values, she said, but they’re expecting values to hold up.
“There could be more people looking to move into the city” to be near casino jobs, she noted, as well as more locals with steady incomes to support a mortgage. “But honestly, I’m not sure how [a casino] would affect” the market.
Some foresee a casino boding well for local property owners. Already strong demand for rental properties could get even stronger and push up rents as casino workers look for housing close to their jobs. What’s more, historically low property taxes in Everett could drop even further under the city’s plan to rely on new revenues from a Wynn casino to the tune of $25.2 million per year.
“Schools will benefit, as will tax rates,” says Stephen Rocco, Everett Chamber of Commerce president. “Certainly drawing in more [tax-paying] businesses will be an advantage.”
D’Ambrosio is also seeing speculation heating up in the commercial property market. Developers are staking out positions for a casino-driven hotel construction boom. Whether a casino is located in Everett or Revere, he said, the region can expect anywhere from four to 12 new hotels to provide as many as 3,600 new rooms.
Proposed casinos would depend on nearby hotels to house their guests in an urban resort model that’s been replicated in such cities as Cleveland, Cincinnati, and New Orleans .
Earlier this month, John Payne, president of partnership development for Caesar’s Entertainment, told more than 100 potential local vendors at Suffolk Downs how his firm’s casinos rely on local restaurants and hotels. An example: Harrah’s New Orleans.
“Harrah’s New Orleans has a hotel that’s 450 rooms, [but] it has demand for more than 1,500 rooms,” Payne said. “So on a Saturday night, we fill our 450 rooms. Then we go out and we buy 400, 500, 600, or 700 rooms with local hotels and put our customers in those hotels.”
The same partnership model would play out in the Revere area, he said, presuming the region has adequate capacity.
While communities wait to hear where a casino will go, developers are hedging their bets. Some are buying options in Everett, D’Ambrosio said, in deals that involve cash payments in exchange for rights to buy and develop parcels at fixed prices in years ahead.
Revere can accommodate as many as 1,500 new hotel rooms, according to Mayor Dan Rizzo. Some projects are already in the works. At Revere Beach, Roclid LLC is planning to break ground in September on a project involving as many 400 hotel rooms, plus 149 residential units and 50,000 square feet of retail space, said Revere economic development director John Festa.
This month, Covington Realty Partners of St. Louis presented plans to build 194 residential units on another Revere Beach parcel. And the Wonderland Ballroom’s ownership group is talking with the city about putting a hotel on that site if a casino is approved for nearby Suffolk Downs.
For some area business owners, it’s still too soon to buy property since the casino’s location is an open question. But it’s not too soon to do research.
Gina Walker, owner of North Shore Shuttle, said her company would eagerly scale up to help transport guests between hotels and a casino. That would mean expanding a fleet of nearly 100 vehicles and finding additional parking space.
“We’re doing our due diligence” in researching potential properties, she said, declining to give specifics about where she’s looking.
Revere florist Kerri Abrams expects she’d need more warehouse space if she were to win vendor contracts for weddings and other functions at a Suffolk Downs casino. She’s not buying or leasing yet, but she’s investigating what’s available.
“I’m at the point of thinking about how to grow,” said Abrams, owner of Kinship Floral. “I haven’t really checked prices yet because I’m not there yet because [the casino] is not there yet. But [I’m starting] to think about it and make a master plan.”
While some developers are buying options, others are splitting the distance between proposed casino sites. Chelsea, where the Route 16 corridor connects Revere and Everett, is attracting developers whose projects will likely be located no more than a few miles from a casino in either direction.
Since March, developers have signed agreements for at least two Chelsea properties that are likely slated for hotel development, D’Ambrosio said. One is at 285 Central Ave.; the other is near the Carter Street exit off Route 1.
“Hotels are clearly being contemplated because of the casino buzz,” D’Ambrosio said. “Whether a casino goes in at Suffolk Downs or a little further up the street in Everett, the Chelsea hotels will be situated in between to service either one.”
Others are pressing ahead with plans to build no matter where a casino is. Revere Beach is ripe for new upscale development either way, Rizzo said. The city will continue to expedite permitting and consider tax incentives in efforts to bring hotel projects to fruition.
“The casino would be another feather in our cap,” Rizzo said. “At that point, the city may not need to entice a developer with tax credits.”