Home » NEWS » Coast casinos: new property tax appraisal rates too high
Unfavorable rates hurting industry, says Engelstad

Coast casinos: new property tax appraisal rates too high

BILOXI – Ralph Engelstad says that if he could sell the Imperial Palace in Biloxi for what it is currently being appraised for

by Harrison County, he’d be delighted. But he’s not at all happy about paying taxes on what he feels is a highly inflated


“The casino hotels are appraised way too high,” said Engelstad, who also owns a casino resort in Las Vegas. “If someone

wants to write me a check for that amount, hurry over and I’ll take it. I’ve never seen anything quite like this. Here in Las

Vegas in the middle of the Strip next to Harrahs and across the street Caesar’s Palace, I have a casino resort with 2,700

rooms and the taxes are $1.4 million. And in Mississippi I have the same kind of facility with 1,100 rooms, and I believe our

taxes are almost $3.7 million. The tideland’s lease is another $500,000 on top of that.”

Engelstad says Mississippi doesn’t have favorable property tax rates, and that hurts the industry. If the appraisal isn’t

adjusted by Harrison County, Imperial Palace intends to sue.

“We will litigate,” Engelstad said. “We don’t like to litigate, but we can’t pay these kind of taxes.”

The appraisals are just for the casino hotels and other resort amenities, not the casinos. Other casino hotels in Harrison

County are also protesting their appraisals rates as being far too high. The casinos say the hotels are being appraised at

$358.6 million too much, which would represent about $5 million in tax revenues for the county, cities and schools. Harrison

County’s portion of the tax revenues has already been budgeted.

Rich Westfall, senior director of marketing for the Isle of Capri Casino Crowne Plaza Resort in Biloxi, said they have

retained a consultant to work on the issue.

“Our thought on it is that we just want to be treated fairly like any other industry on the Coast,” Westfall said. “We just want

it to be as fair as possible.”

Beau Rivage spokesman Bruce Norse said the county should base the appraisals on income rather than the replacement

value of the hotels.

“The current appraisals were done on a replacement cost approach, meaning what it would cost if we had to replace the

hotel,” Norse said.

“The law allows for three ways to appraise property. Another way is the income approach which is the approach we have

used to come up with our value. The third way is a comparable sales approach. But since there are no comparable

properties to Beau Rivage, that approach can’t be used.”

The county has placed a value of $439 million on Beau Rivage’s properties on the Coast, which includes other investments

such as 500 acres purchased for construction of a golf course. Norse said the income approach would place the value at

$252 million. Beau Rivage feels its property taxes should be about $7 million per year compared to the $11 million it would

pay under the county’s current appraisal.

Are casinos being seen as cash cows and treated differently than other kinds of businesses? Norse says no.

“Some private residents have had their home values double, and they are disputing that,” Norse said. “As far as us being

picked on, our numbers have several more zeros on them compared to the average person with a home. But our arguments

are basically the same.”

But Bernie Burkholder, president and CEO of Treasure Bay, says he believes that a more “global approach” to the issue of

casino taxation should be taken. He said that for all categories of taxes, including gaming taxes, property taxes and sales

taxes, Treasure Bay has paid $60 million in taxes since opening.

“I think there is a point where I definitely feel I am paying more than my fair share,” Burkholder said. “I’m not sure there is

an equitable evaluation between casino and non-casino hotel properties, and I think that is something that needs to be

looked at.”

Treasure Bay’s hotel was appraised at $12 million when the company believes it should be assessed at $8.8 million.

Burkholder said he didn’t think the amount of revenue being generated by the property supports such a large increase in

appraised value.

Other businesses and homeowners in Harrison County are also challenging the appraisal rates. Appraisals for real property

have increased 40% since the last reappraisal, which was in 1986. The appraised value of Harrison County has gone up

from about $1 billion to $1.5 billion. Much of the increase is attributed to new construction, especially the casino building

boom. Casino activity is also credited with having a big impact on increased market values for homes and businesses in the


Harrison County Tax Assessor Tal Flurry maintains that the casinos and other property owners have been fairly accessed.

“An appraisal is an opinion of value,” Flurry said. “One person’s opinion may be different from another. We have gone

through an appraisal or update mandated by the state for all 82 counties. All assessors strive to follow the law and place a

market value on property. We feel the value of the casino properties presented to the board for their approval reflect the

market value of the property.”

Flurry said it is common for businesses and homeowners to challenge appraisal values. There are 87,000 parcels of land in

Harrison County. The value of about 6,000 parcels was challenged at informal hearings earlier this year. Some appraisal

rates were adjusted before the rolls were turned over to the board of supervisors. Out of the 6,000, the value of about 700

parcels is still being contested. Flurry said the number of protests actually wasn’t as great as anticipated.

Flurry said he wasn’t certain why property tax rates are so much lower for properties in Las Vegas, and recommended

contacting the Clark County, Nevada, tax assessor’s office. Jeff Stoebner, who works for that office, said that Nevada uses

a different method of determining taxes than is used in most states, including Mississippi. Taxes work out to a little more than

1% of value. Engelstad’s property in Las Vegas is valued at $142 million, a value that has depreciated over time for the

casino built in 1960.

Nevada doesn’t have an income tax, has sales taxes about the same as Mississippi and a lower tax on gaming revenues,

6.75% compared to 12% in Mississippi and 8% in New Jersey. Stoebner said it is likely property taxes in Nevada are

lower than Mississippi because Nevada is making up the revenue in other areas such as room taxes.

And although the tax on gaming revenues is lower than Mississippi, Nevada generates more income off gaming taxes

because of the large concentration of the gaming industry in the state.

Chuck Patton, executive director of the Mississippi Gaming Commission, said he doesn’t think that property tax levels in

Mississippi are too high.

“Personally I think property tax in Mississippi is very reasonable,” Patton said.

Andy Bourland, executive director, Mississippi Gaming Association, said he wasn’t aware of property taxes being an issues

anywhere else except on the Coast.

Harrison County supervisors said they believe the appraisal rates are fair, and that a major reduction wouldn’t be equitable

to other county taxpayers who are facing higher tax bills on their homes and businesses primarily because of a casino-d

real-estate boom. Board of Supervisors President Bobby Eleuterius said he couldn’t tell home owners that their taxes are

going up, but the country is going to give a b


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