Portsmouth could welcome a casino if Virginia legalizes gambling

The Portsmouth City Council voted Monday to support an agreement that, if Virginia lawmakers legalize casinos, would see the city sell a 50-acre site near the Tidewater Community College campus to Rush Street at $400,000 per acre with a minimum price of $10 million.

According to the nonbinding agreement with Rush Street Gaming, the site must have enough space for the possible construction of a parking garage and a “first-class” hotel, the Virginian Pilot reports.

“I promise you we will build something you’ll be proud of,” said Rush Street chairman and co-founder Neil Bluhm, a real estate billionaire and Democratic megadonor whose company has been in talks with the city since at least February. “We couldn’t be more thrilled that you’ve selected us to develop a terrific entertainment district facility.”

Earlier this year, the city announced plans to open a casino along the Elizabeth River at the site of a former Holiday Inn at 8 Crawford Pkwy. But Economic Development Director Robert D. Moore later said staff identified the new parcel as a better place for a casino than the waterside location.

A pair of California gaming consultants have since visited Portsmouth to tell public officials that a new casino — a coveted anchor to the entertainment district the city wants to build — could make about $145 million in profit its first year after opening.

Rush Street didn’t say what amenities its Portsmouth casino resort would have, but its recently opened Rivers Casino & Resort Schenectady in upstate New York has dining options that include a steakhouse, a pizzeria, and a burger joint.

According to a February 2018 report from the Albany Business Review, the casino resort fell far short of its gambling revenue projection and faced increased competition one year after opening. The $330 million casino and adjacent mixed-use development, however, were credited for transforming vacant land that had been polluted from decades of industrial activity.

Monday’s 6-0 Portsmouth City Council vote, made during a specially called meeting, gives the city’s blessing to Rush Street’s deal with the Portsmouth Economic Development Authority, the independent agency that owns the land.

State Sen. Louise Lucas, D-Portsmouth, has long tried to get commercial gambling approved for Portsmouth. This year, the city aligned with Danville and Bristol to push legislation that would allow economically challenged cities like themselves to hold referendums, letting residents decide for themselves if they want casino gambling.

Four other cities, including Norfolk, were included in legislation that was passed this year and will be considered for final approval during the upcoming General Assembly session. Officials from nearby Hampton have already said they plan to lobby legislators to add them to the list.

As state lawmakers ponder whether to legalize gambling, Moore has said that, no matter what, Portsmouth will carry on with plans to develop the site as an entertainment district. Though the city hopes its project’s anchor will be a casino, Moore said that might change.

Rush Street, on the other hand, won’t invest in Portsmouth if gambling isn’t legalized, so the city would have to find a new developer if the legislation fails.

The developer will help lobby for the project, according to the new agreement, which also says Rush Street will try to use local vendors and hire people from Portsmouth. It estimates needing roughly 1,000 workers who will earn an average salary of about $55,000.

Part of the planned site off Interstate 264, known as Victory Village, is where a company had planned to build a mixed-use development similar to Virginia Beach’s Town Center. But after years of legal wrangling with the city, the developer backed out and the Economic Development Authority agreed to buy back 19 acres for the assessed value of $5.1 million.

Moore wants to break ground on the new project by January 2021, though the plan is contingent on what Virginia lawmakers and, potentially, local voters, decide about legalizing gambling in the state. By 2026, he estimates the development could bring the city government $10 million to $15 million in tax revenues.

Monday’s vote passed with little discussion, though Councilman Bill Moody touted the developer’s interest in boosting Portsmouth’s workforce with nearby TCC.

Bluhm said he was optimistic that local voters would approve gambling if state lawmakers OK a citywide referendum.

The company has casinos in Des Plaines, Illinois; Schenectady, New York; Pittsburgh; and Philadelphia. Unlike the massive resorts that pack the Las Vegas Strip and the Atlantic City oceanfront, Bluhm said, these “regional casinos” are tailored to each city based on public input.

“For us to feel successful, we’re going to have to make sure that the community is happy with what we end up doing,” Bluhm said. “In every case, we’ve had really good results.”