Mohawk Harbor has Moody’s feeling positive about city
Moody’s Investors Service has revised its outlook to positive for the city of Schenectady, citing the future revenue from the Rivers Casino and Resort at Mohawk Harbor.
Moody’s attributed the positive outlook to the city’s improving finances through cost containment, conservative budgeting and fully funding pension payments, according to a report released on Friday.
The outlook is also based on the development of the old Alco site off Erie Boulevard, renamed Mohawk Harbor, which will be the home of a $330 million commercial casino by the first half of 2017.
“The outlook also reflects the development of Mohawk Harbor, including the construction of a resort casino, which is expected to bolster the local economy and augment city revenues ,” the report states.
Factors Moody’s lists that could lead to an upgrade include sustained trend of structurally balanced operations and additions to reserves; significant tax base and revenue growth from Mohawk Harbor; and material decrease in debt levels.
Moody’s also listed factors that could lead to a downgrade, which include a decline in 2015 fund balance greater than estimated; return to structurally imbalanced operations; and deterioration of the tax base.
The investors service also assigned an A3 rating to the city and affirmed the A3 rating on the city’s $14.6 million of outstanding general obligation (GO) bonds.
“The A3 rating incorporates the city’s moderately-sized tax base located near the state capital, below-average socioeconomic profi le, improving financial position, high debt burden, and elevated pension level,” the report says.
Rotterdam developer the Galesi Group is revitalizing the 60-acre Alco site with apartments, condominiums, townhouses, office and retail, a 50-boat-slip harbor and a casino.
The casino, to be operated by Rush Street Gaming of Chicago, was approved for a license by the state Gaming Commission last month. It’s expected to be built and opened in about 18 months, according to Rush Street.
The Rivers Casino is projected to make $223 million in gaming revenue by its third year of operation. The casino is expected to create 1,200 permanent jobs.
Mayor Gary McCarthy has said he expects a 10 percent property tax reduction for city residents in 2017 when the casino opens.
Council President Leesa Perazzo, who also serves as the council’s finance committee chairwoman, said she is hopeful that homeowners will see a slight reduction in taxes at that time.
“We’re still battling high property taxes,” she said. “I would love to show a huge reduction in 2017. It’s just going to depend on when those revenues come into the city. With the awarding of the license, I’m not sure what that will look like.”
Rush Street is projected to provide both the city and the county $4.1 million each in revenue each year, along with $2 million for the Schenectady City School District, as outlined in the Upstate NY Gaming and Economic Development Act.
The Mohawk Harbor development is ongoing as other construction projects, like apartment, retail and office buildings, are underway along parts of lower State Street, Broadway and Erie Boulevard.
Perazzo said she believes the city always has more work to do but that the Moody’s report reflects that Schenectady is moving in a positive direction.
“Our last couple of budgets clearly indicated we were going in this direction,” she said. “It’s nice to have an outside entity concur with the positive direction we believe we’re going in. But we can always do better.”
This year’s city budget has a slight tax decrease of 0.5 percent, compared to last year’s budget that had a 0.9 percent increase.
In September, state Comptroller Tom DiNapoli’s office issued an updated fiscal stress score for Schenectady of 0 percent — the lowest percentage. The score improved from 15.8 percent in 2014 and 25.4 percent in 2013.
Schenectady was one of three cities in the state at 0 percent fiscal stress and the only city in the Capital Region, according to the comptroller’s updated scores.
This is a rendering of Galesi Group’s Mohawk Harbor development that includes plans for a casino, hotels, housing and office and retail space — plus a harbor with 50 boat slips.