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
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
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