Ahead of the recent economic downturn, commercial casinos collected at the least $30 billion in revenues annually from 2005 through 2008.1 During this period, US casino owners built new facilities and expanded the size of their existing facilities. As a result of the economic downturn, new US commercial casino construction has arrived at a screeching halt and casino operators are now actually centered on existing facility cost reduction.
The Nature of Casino Properties
Commercial casinos often encompass hotel resorts, which offer attractive packages of services for their corporate and family customers. Casinos are particularly suited to EPAct for their large gaming floors, hotel occupancy rooms, meeting halls, and parking garages. All these features typically consumes large square footage and the EPAct benefit includes a potential for up to 60 cents per square foot for all the three measures described above Togel Hari Ini . Some of the smallest commercial casinos are about 50,000 square feet while most American casinos are typically over 100,000 square feet. Among the largest ones, MGM Grand on the Las Vegas strip is almost 2 million square feet. Hotels themselves are probably the most favored of Section 179 building category. (See “Hotels and Motels Most Favored Energy Policy Act Tax Properties”)
It’s common to think about commercial casinos as positioned in two states Nevada and New Jersey. While it does work that those two states have the largest commercial casino revenues, there are 12 states with commercial casinos in the United States, the other commercial casino states are: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Pennsylvania, and South Dakota. Members of the American Gaming Association have publicized some of their commitments to energy reduction. Reporting casinos include Boyd Gaming Corporation, Harrah’s Entertainment, Inc., and MGM Mirage. They have projects such as significant energy savings via cogeneration, ERV(energy recovery ventilation), more efficient HVAC units, replacing incandescent lights with energy efficient lightings, windows with energy efficient day lighting systems, solar thermal storage and numerous other energy saving initiatives.
The underlying rule set to qualify for the Section 179D lighting tax deduction makes casinos and particularly casino hotels probably the most favored property category for the tax incentive. The rule set requires at the least a 25% watts-per-square foot reduction as compared to the 2001 ASHRAE (American Society of Heating Refrigeration and Air Conditioning Engineers) building energy code standard. Full tax deduction is achieved with a 40% watts-per-square foot reduction compared to the ASHRAE 2001 standard. The ASHRAE 2004 hotel/motel building code standard requires 40% wattage reduction, which means that any hotel or motel lighting installation that meets that building code requirement will automatically qualify for the utmost EPAct tax deduction.
Occupancy Rooms
For almost every other building categories, the Section 179D tax provisions require compliance with the bi-level switching requirement. The comparison is definitely based on wired as opposed to plug-in lighting. Casino hotel occupancy rooms have an important advantage in that they often use plug-in lighting, and since these rooms function as hotel and motel spaces, they’re specifically excluded from the tax bi-level switching requirement. Since occupant rooms usually are one of the larger spaces in hotel casinos, casinos are typically able to utilize energy efficient lighting to generate large EPAct tax deductions for the facility.
Back of the House Spaces
Casinos frequently have large kitchen, storage, and laundry (so called back of the house) spaces that have historically used T-12 fluorescent lighting. This lighting is so energy inefficient compared to today’s lighting products that it is going to be illegal to manufacture in the United States after July 1, 2010.4 Once manufacturing of those prior generation lighting products ceases, the expense of replacing these inefficient bulbs will increase. Simply stated, casinos must look into acting now to restore these lighting fixtures to save lots of both energy and lamp replacement costs. The EPAct lighting tax incentive can be used to handle the opportunities related to these legally mandated product changes
Ball Rooms, Banquet Rooms and Restaurants
These areas of casinos have historically used designer type lighting that’s energy inefficient and often very costly to maintain and replace. In particular, replacing bulbs and lamps in high ceilings is very expensive since expensive mobile hydraulic platform equipment should be rented or purchased to take care of the replacements. New lighting products and, specifically, light emitting diode (LED) products, use a fraction of the energy and have a much longer useful life and are now being substituted. The mixture of large energy cost reduction, operating cost reductions, utility rebates and EPAct tax deductions can greatly enhance the economic payback from these more expensive lighting upgrades.
Parking Garages
Many casinos have large adjoining parking garages that may save substantial energy costs and generate large tax deductions by upgrading to energy efficient fixtures. In Notice 2008-40 issued March 7th, 2008, the IRS announced that parking garages are a property class that’s specifically eligible to utilize the EPAct tax deductions. Also, parking garages are excluded from the tax bi-level switching requirement. Please see the September, 2008 International Parking Institute article specialized in parking garages EPAct lighting deduction tax opportunities.5
Slot Machines and Gaming Floors
Among the biggest energy users on hotel gaming floors is slot machines. Although these were early adapters of fluorescent technology, even these energy efficient bulbs normally have to be changed 3 times a year due to 24/7 operating hours. As a result of high labor maintenance costs, casino owners are now actually transitioning to LED technology inside their slot machines. LED’s, while they’ve higher in advance costs, have high energy efficiency and considerably longer life cycle, offering significant savings in labor and maintenance costs.
HVAC
Casinos for their typical 24 hour occupancy can achieve significant energy cost savings from energy efficient HVAC systems. In particular, Nevada’s hot climate further makes energy efficient HVAC a really worthwhile investment. Fortunately. Nevada with the best revenues from casinos has America’s second highest convenience of energy efficiency through renewable geothermal energy.6 Certain types of very efficient HVAC investments will often qualify for the HVAC EPAct tax incentive including geothermal and thermal storage.
LEED Casinos
We expect to see more casinos obtain LEED status. (See LEED Building Tax Opportunities Article7). In 2008, The Palazzo, Las Vegas Casino became the largest LEED certified building and one of the first certified LEED casinos in the US.8 Casinos and hotels discover that certain types of frequent travelers are very interested in remaining in facilities that have clearly demonstrated they’re centered on the surroundings and sustainable design. To become LEED certified, a casino should have a building energy simulation model produced by a qualified engineer. Modeling can also be needed for the EPAct, HVAC and Building Envelope tax deductions. Qualified tax experts that know making the adjustments to convert LEED computer models to EPAct tax deduction models can evaluate LEED models and determine whether large tax deductions are probable. Like, a 500,000 square foot LEED casino that qualifies for the utmost EPAct tax deduction will receive an immediate tax deduction of $900,000 =(500,000*$1.80). Casino owners who understand the magnitude of those benefits can utilize the tax savings to simply help justify the expenses related to achieving LEED status.