Accelerated Facility Development Commission (AFDC)

940 NEWS
Subsequent to the end of the third quarter, the BCLC unveiled an initiative to improve the economic model of casino redevelopment in the province, which was developed in consultation with casino service providers to recognize the recent significant increases in development costs. The initiative provides for an additional FDC amount equal to 2% of the gross win from the redeveloped casino property on projects approved by the BCLC after July 1, 2006, which will be payable weekly beginning on the later of April 1, 2007 or the opening of the redeveloped property. The AFDC is a one-time initiative that is limited to the initial redevelopment of a property. Once the approved eligible costs of the redevelopment are recovered through the existing FDC and the AFDC, the service provider is no longer eligible for AFDC on the project.The AFDC will apply to both the Burnaby redevelopment and the potential Lake City redevelopments. Although the Burnaby redevelopment was approved prior to July 1, 2006, the Fund has received confirmation that the project is eligible for AFDC. Accordingly, beginning with the opening of the new casino in late spring 2008, the Fund will receive total FDC for Burnaby equal to 5% of the gross win from the new casino. Once all approved eligible costs have been recovered, FDC will accumulate at a rate of 3% of gross revenue, to be applied against future eligible approved expenditures. Management anticipates that the implementation of AFDC will reduce the recovery period on the Burnaby redevelopment by approximately five years.