Portsmouth casino to open first, hotel later
PORTSMOUTH — The company behind Portsmouth’s upcoming casino wants it to be the first to open in Virginia, maybe as soon as late next year. But at first, it likely won’t include the hotel shown in glitzy renderings.
In a meeting Tuesday with the City Council, representatives of casino operator Rush Street Gaming said their development agreement with the city guaranteed they would build a hotel, but they don’t plan to open it at the same time as Rivers Casino and its connected restaurants, lounges and entertainment spaces.
Mike Tobin, a senior vice president for Rush Street, said the hotel would take longer to build and that the pandemic has introduced uncertainty.
Tobin said hotels have been hurt over the past year and a new one needs to take into account new concerns and expectations guests may have. The company also doesn’t have enough information, he said, to decide how many rooms to build or know who most guests will be: families, business travelers or casino regulars, for example.
Tobin said rushing the hotel and ending up with many empty rooms could be detrimental to the success of the overall project, which he deemed an “entertainment center,” not just a casino.
On Wednesday, Vice Mayor
De’Andre Barnes said there was benefit to Portsmouth’s casino being first to open in Virginia. But once others open, he wonders if Portsmouth’s can compete without a hotel.
“I’d rather see it all happen at once. … If the casinos in Norfolk and Richmond have hotels and more places to stay and things to do nearby, where would people choose to go?” Barnes asked. “Too many people in the city operate as if Portsmouth is already a destination. We still have to make it a destination.”
Interim City Attorney Burle Stromberg said the development agreement allows the firm to start working on the hotel at any time but requires it to begin work on the hotel upon hitting certain revenue benchmarks once Norfolk’s casino opens.
If Portsmouth’s casino earns a profit of $175 million in one year or $250 million over two years while competing against Norfolk’s casino, then Rush Street must begin building the hotel within a year.
But if work on the hotel hasn’t started after four years of the Portsmouth casino being open, then the city’s economic development authority takes over the project and can seek a new builder.
Barnes said he wants the casino to succeed and benefit the city, but the flexibility in the development agreement creates uncertainty, making it feel more like a handshake deal than a binding document.
Rush Street operates four casinos. Its casino in Schenectady, New York has a hotel, and one is in the works at its Pittsburgh casino. Its casinos in Des Plaines, Illinois and Philadelphia don’t have hotels.
Rush Street plans to invest more than $300 million in the Portsmouth project, which is expected to create 1,300 permanent jobs, along with 1,400 construction jobs.