What will a casino do for property values?

Question

I've got a friend who said that an indian casino is going to be built next door to his small neigborhood (50-60 homes in neighborhood) -- the casino property will be directly adjacent to the neighborhood (as-in sharing a common boundary line). And, they will both share a common entrance road off the main access road (casino will have other access, but this is the only neighborhood access -- there will be no pass-through traffic in the neighborhood).

My thoughts are that it can be bad or good -- values could go up if the casino creates a commercial growth response and a developer wants the small neighborhood for a commercial project, golf course or something along those lines. But, as far as residential goes, I think it is bad. Too close to the "evil" gambling and the threat of increased crime (whether true or not, the perception will detract) and any casino workers that want to buy to be close to work will be lower income people, so at best they will maintain market level (but based on my friend's income level, I think they will be a step down).

What are BP's thoughts on the situation?

Karen Margrave · Answer

Values on the adjoing subdivision will probably go down, due to the increased traffic, noise involved (there will probably be live entertianment) fights in the parking lots etc. The homeowners should all band together and try to meet with the developers of the casino and the local building department to try to mitigate as much as they can. Seems strange that such a heavy commercial use would be allowed next to residential.

Owners may also be able to get the tribe to buy out their homes, and use them for housing for tribe members, or they may have a non profit that could use for low income housing.

Andy B. · Answer

Bill Gulley I don't think selling now will work, but he is exploring that idea, the problem is that this has been officially announced and ground is being broken within the week, so the damage is done I think.

I am thinking it might be better to wait and see if there is any expansion or subdivision plans for tribe members or whatever that may buy the neighborhood and that would be the best bet.

Of course if the traffic, noise and crime gets out of hand, it may be a different story.

Thomas Handy · Answer

Steve Babiak I was just in Philly and my mom was saying the casino in Chester was slowing down business in the mom and pop shops. Business was already slow and the casinos made it worse.

Karen Margrave · Answer

Not all indian owned land is soverign. We developed a medical/dental clinic for an indian tribe in northern California. We were offered the opportunity to build their casino, but because we didn't think it would be an asset to the community, passed on the offer. The casino is on soverign land, the medical/dental clinic is not, nor is the hotel, convenience stores, etc. they've built. They've also purchased another 80 acres close to the freeway, and probably will build a casino on that. A river runs next to it, so they will probably say it is ancestral land, and it too will be soverign.

After the tribe started making truckloads of money (from all the development started by the chairman that was head of the tribe when we dealt with them) they decided to kick that family out of the tribe, though they went to court and proved their ancestry. However; one of the families had more members and was able to kick out the smaller family. The smaller family (and original tribe chairman) went to state court, which ruled it was a tribal issue since they were on soverign ground.

The idea of the Indians helping each other as voters had anticipated hasn't turned out to be true. But, those in the tribes with casinos do make alot of money that they invest in various businesses. They also continue to get government grants for housing, day care centers, etc. which I find rather curious.

The most leverage will be before the casino construction is started. Once it starts, the property owners are pretty much stuck with what happens.

Steve Babiak · Answer

The suprising crime issue with the casinos in the Philadelphia area is people leaving their kids in the car while they gamble away for hours!

Bill Gulley · Answer

I don't know what the crime issues might be (well, I do, but property crime) may not be a problem. I heard that at a casino in OK (Joplin area) someone was breaking into cars and was nailed. The place is stuffed with security cameras inside and out with the entire property covered. As that get's into the neighborhood you may not have coverage but if they have to go past that casino to get out and you have the time of the crime, the bad guys may well get caught, and remeber indians can sneak up on bad guys. LOL Probably depends alot on the area.

Maybe he could sell to an employee there. I assumed it was public knowledge not to hide it but perhaps limit future losses.....but then again, it might not be so bad of a hit, I wouldn't hold it, but he may be happy to. Never know....it's almost a roll of the dice!

Ryan M. · Answer

We had this happen by one of our mobile home communties. Not as close as what you are but 2 miles away on the same road. It really hasn't done anything for or against us yet. It has been open 1.5 years. The traffic helps some with putting new people in but not much. I don't forsee it being very negative in our condtion but as a single family home owner I wouldn't like the least bit.

The thing with casnios and they are starting to do it now here is once they develop cash they put in their own neighborhoods for the tribe members, their own hotels, etc. Once they have strong cash there is nothing stopping them there not worried about permiting/approval, they are their own nation. When your on their ground you are not in your state anymore. I could go on and on about casiNO(s) but will leave it there.

Bill Gulley · Answer

Good idea Karen.

Traffic, 24/7 will be the problem IMO. Values would dive, tell your friend to sell now (LOL).

If the casino were around other commercial properties, C-Stores, retail areas, that increased traffic would be a plus, but not for residential. It will be seen as functional obsolecense in the eye of the residential appraiser in the future. Good luck with it...

Larry K. · Answer

I agree with you. It didn't do anything good for the residences in Atlantic City. Even the small commercial nearby is bad. Keep in mind though AC was in bad shape when they started building the casinos.

The tax revenue and presence was supposed to revitalize AC. Did not work out that way.

Not sure how though how it has affected values in more rural areas though when a casino comes into town.

Perhaps if you are one of the players right in the line of the development and your use is well associated it could work out well.

Dale Osborn · Answer

Not sure as to property values, but for your residents it will be a problem. Your rent money will be spent at the casino with the hopes of doubling or tripling it. You will end up having to evict them and then face the need to replace them. Many will not want to be that close to the casino so filling vacancies becomes a problem.

It might be best to try to sell these properties and do a 1031X into something better.

What will a casino do for property values?

What will a casino do for property values?

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