Eldorado Resorts Getting a Sweet Tax Break For Housing Nevada-Reno Students at Circus Circus
Posted on: September 30, 2019, 11:54h.
Last updated on: September 30, 2019, 02:55h.
Eldorado Resorts, the operator of the Circus Circus in Reno, is cruising toward a tax break for housing 1,300 University of Nevada-Reno (UNR) students at the property after a July explosion on the campus left two dormitories uninhabitable.
The blast was caused by problems in a boiler room and injured eight people. Soon after the explosion, the university made a deal with Eldorado to provide temporary living arrangements for students that were on campus for summer school. On Aug. 1, the gaming company and the school reached a more comprehensive, $21.6 million agreement to turn a Circus Circus tower into Wolf Pack Tower, a play on the nickname for UNR’s sports teams.
Under the terms of the agreement between Eldorado and UNR, neither the company nor the school will be liable for the usual 13.5 percent tax rate assigned to guest rooms in Reno. The Reno Sparks Convention and Visitors Authority (RSCVA) told UNR prior to the finalization of the pact with Eldorado that the university would not be on the hook for taxes, reports The Nevada Independent.
The University looked at other properties throughout Reno-Sparks. None can replicate what the West Tower can provide – 1,300 beds, complete University control of the entire building, and proximity to our campus,” says UNR on its housing and food website. “Wolf Pack Tower is located five blocks (less than one mile) south of campus.”
UNR is paying Eldorado in monthly installments and some of the tab is being picked up by the school’s insurance providers.
A Year Of Tax Breaks
Eldorado, which is in the process of acquiring Caesars Entertainment for $17.3 billion, a deal that will make the company the largest domestic casino operator, will not have to pay the 13.5 percent room tax for about a year.
The tax benefit to the company could be as high as $2 million or more, reports The Nevada Independent. The reason for Eldorado’s tax break is straight forward: because Wolf Pack Tower is housing UNR students and some staff, it is not considered “transient lodging,” meaning the occupants’ stays are significantly longer than those of traditional hotel guests.
Wolf Pack Tower is in a non-gaming area of Circus Circus, but Eldorado and UNR took steps to prevent access to the casino floor. For example, students going to their rooms don’t go through the casino, and a skywalk that previously adjoined the tower to the gaming area has been shuttered.
Potentially Positive Impact
Missing out on $2 million in room tax revenue would appear to be a negative for the city of Reno. But at least one expert sees the removed room supply as potentially benefiting the region’s tax collections.
Elliott Parker, a professor and chair of UNR’s economics department, told the The Nevada Independent that visitors that would normally stay in the non-gaming part of Circus Circus now occupied by UNR could be compelled to consider more expensive rooms at that property or at other Reno venues, potentially boosting the room taxes collected by the city.