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Government and People
Capital Horizon Entertainment Complex
1730 17th ST NE, Washington, DC 20002
Paid for by the Citizens for Lottery Expansion Initiative Committee, Vickey Wilcher, Treasurer. Our reports are filed with the Director of Campaign Finance, D.C. Board of Elections and Ethics
Let the Residents Decide: Lottery Expansion Initiative Would Spur Economic Development on NY Avenue
WASHINGTON, D.C. - The residents of the District could win the opportunity to vote on a ballot initiative in November that would result in the development of a $500-million privately-funded Entertainment Complex in Northeast Washington. The proposed Capital Horizon Entertainment Complex would be located on the New York Avenue corridor, and would include a 600 - 800 room marquee hotel, a conference center, underground parking, a spa, retail shops, a banquet facility and restaurants, a multiplex movie theatre, a bowling alley and an entertainment area with video lottery terminals - a new lottery game.
The ballot initiative presented today to the D.C. Board of Elections and Ethics would pave the way for residents to approve the project.
The project was described in testimony given today for the proposed "Lottery Expansion Initiative of 2004" which seeks to put the issue of lottery expansion on the November ballot. The proposed expansion of the lottery is only one part of Capital Horizon, but is an essential element of the economic development project. The new lottery game would be played on electronic video game terminals, but like existing lottery games, would be controlled by the central lottery computer and regulated by the DC Lottery.
The project is expected to create upwards of 1,500 new permanent jobs upon completion, plus hundreds of construction jobs, with hiring preferences for D.C. residents. It will generate scores of business opportunities for DC local and minority-owned business enterprises. The project developer already is entering into Memoranda of Understandings with local businesses and organizations, pledging to work toward the goal of awarding 50% of the dollar value of contracts to DC-certified LSDBEs (Local, Small, and Disadvantaged Business Enterprises). In full operation, Capital Horizon Entertainment Complex represents an estimated $214.3 million annually in new revenues for the City, which could provide additional funds for D.C. Public Schools and new funds for prescription drug benefits for the City's senior citizens.
The text of the proposed Initiative states that "it is the strong recommendation of the people of the District of Columbia" that revenues from video lottery terminal operations should be used for the public schools and for a new DC "Senior Citizens Prescription Drug Benefits Fund", with the remaining going to the District Treasury's general fund. In other words, by voting "yes" on the proposed Initiative, citizens will be urging city officials to use VLT revenues for these purposes. However, it would be up to the D.C. City Council, through the normal budget process, to determine if the new revenue would be used for the recommended purposes.
"For more than 20 years, City officials - including myself, when I was on the City Council - have recognized the potential for New York Avenue to become a driving force in the City's economic development plan. Capital Horizon Entertainment Complex will be a major leap forward in achieving this goal," testified John Ray, former City Councilmember and the counsel to the Initiative committee.
A number of local leaders testified at the hearing in support of the Initiative. Those endorsing the project included:
"This is an important Initiative that will generate new jobs and much needed revenue for the District of Columbia," said Mr. Richardson. "In addition to the job opportunities and increased lottery revenue, I am confident a project of this magnitude can be a boon to the tourism industry. The mix of business, dining, shopping and recreation facilities will attract visitors and tourists to a part of DC that has been neglected."
If placed on the ballot, citizens would vote whether or not to expand the lottery by amending the DC Lottery Law to add new sections that authorize the licensing of video lottery terminals - commonly called "VLTs" - in the District of Columbia. A "yes" vote will also be a recommendation for the District to increase funding for the public schools and to help District seniors pay for prescription drugs with the revenues raised from the VLT fees.
Capital Horizon Entertainment Complex: A Good Investment for Washington, DC
Provides Engine for Economic Development and Growth
Capital Horizon Entertainment Complex (CHEC) is a proposed economic development and stimulus project that will develop a 12-acre plot of land in Northeast Washington -- bordered by New York Avenue and Bladensburg Road. The entertainment complex will include a 600-800 room hotel and conference center, a spa, several restaurants, retail outlets, a shopping emporium, a gaming facility with video lottery terminals, a banquet facility and ample underground parking.
This development will provide an economic boost to the New York Avenue corridor and to the City.
Increasing Revenues for Washington, DC
When fully developed, Capital Horizon will contribute approximately $214 million in new revenues to the District each year -- $190 million from VLT operations, and another $24 million from property, employee income, sales, hotel, restaurant, and commercial parking taxes.
The VLT facility is expected to yield $765 million in net annual revenues after winner payout, of which 25% of these revenues would go to the District to be appropriated by the City Council in the usual budget process.
The process to be submitted to District voters would recommend applying revenues generated by VLTs to increase funding for D.C. public schools and to establish a new fund to help D.C. senior citizens pay for prescription drugs. By voting "yes" on the Initiative, citizens will be urging city officials to use VLT revenues for these purposes, with the remaining going into the District's general fund.
If District voters approve, and city officials follow their wishes, DC students could see as much as $40-$65 million in additional revenue. This money would be enough to pay the entire cost of purchasing new textbooks for every student in the public schools, expand athletic or arts programs, or finance all public-school transportation needs.
Capital Horizon Entertainment Complex will be funded completely with private funds and without any assistance from the District government. All upkeep and maintenance will be assumed by the investors at no cost to the City.
Creating Jobs and Opportunities
The proposed ballot initiative, the Lottery Expansion Initiative of 2004, would allow the citizens of Washington, DC to have an opportunity to vote on this proposed development in the November election. The proposed initiative expands the DC Lottery to include a video lottery gaming. The video lottery terminals would be contained in one location in the City as part of the Capital Horizon Entertainment Complex.
Building the Capital Horizon Entertainment Complex and staffing its restaurants, hotels and entertainment venues is expected to generate at least 1,500 new jobs for the District.
Increasing Participation of Local and Minority Businesses
Capital Horizon Entertainment Complex is committed to having significant ownership in the development come from the District. The local investor group is being finalized at this moment and an announcement is forthcoming.
This project will employ, use, and contract with minority and disadvantaged businesses based here in DC. Demonstrating this commitment, the developers are entering MOUs (Memoranda of Understanding) with DC business organizations, pledging to work toward a goal of awarding 50% of the dollar value of contracts to DC-certified Local, Small, and Disadvantaged Business Enterprises.
Capital Horizon Entertainment Complex
|Construction and Land Cost||$380 million|
|Furniture, Fixtures, & Equipment||$100 million|
|Pre-opening Costs: Cage funding||$15 million|
|Salaries/Uniforms/Training/Franchise Costs etc.||$15 million|
|Total Cost of Investment Upon Completion||$510 million|
|Expected Net Annual VLT Revenue after Winner Payout||$765 million|
|Revenue Share to the District @25% of Net||$190 million|
|Net VLT Revenue after Revenue Share to the District||$575 million|
|Project Operating Expenses||$392 million|
|EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) @ 30% (Industry Average)||$168 million|
|Debt Service @ 12%||$61 million|
|Depreciation Expense||$15 million|
|Property Taxes||$9 million|
|Project Net Operating Income||$83 million|
|ROIC (Return on Investment Capital)||16.3%|
|Number of Employees||at least 1,500|
|Average salary||$37,000 annually|
|Property Tax||$9 million|
|Employee Income Tax||$7 million|
|Room Tax ( 600 rooms @ $200 @ 95%)||$6 million|
|Sales Tax||$1 million|
|Commercial Parking Tax||$0.5 million|
|Restaurant Tax||$0.8 million|
Located at New York Avenue & Bladensburg Road NE, in Ward 5, the proposed Capital Horizon Entertainment Complex represents an over $500 million investment in our city. Developed entirely with private funds, Capital Horizon is expected to create at least 1,500 new permanent jobs upon completion, plus hundreds of construction jobs, with hiring preferences for DC residents. It will generate scores of business opportunities for DC local and minorityowned enterprises, and an estimated $214.3 million annually in new revenues for the city.
Paid for by the Citizens for Lottery Expansion Initiative Committee, Vickey Wilcher, Treasurer. Our reports are on file with the Director of Campaign Finance, DC Board of Elections & Ethics.
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