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Chester City Government Discussing Additional Taxes On Union, Harrah's

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The City of Chester has had income problems because of declining residential and commercial tax bases, but now it may be angering the two major businesses that have come into the area.

Chester's government was discussing a pair of ordinances that, if enacted, would place a 10 percent tax on ticket sales and a 20 percent tax on parking. While the proposed ordinances were thought up to affect both the Philadelphia Union and Harrah's Chester Casino and Racetrack (recently renamed Harrah's Philadelphia), but the taxes hit the Major League Soccer franchise harder than the gambling center.

The Union were planning on increasing their foothold in Chester by building a $10 million facility that would include training and office facilities near PPL Park, the team's partially publicly funded stadium. However, the Union's front office may balk at their expansion if the taxes pass.

"We were very shocked to hear about them (the taxes) and very much caught off guard," Union CEO and Managing Partner Nick Sakiewicz said to the Delaware County Times. "We found out about it through the rumor mill."

The soccer franchise's deal with Chester originally included paying only $500,000 in fees for the first three years of existance in MLS, before property taxes applied to the team. Sakiewicz told the Delco Times that the Union were a $20 million-a-year business and that the proposed taxes would cost the team around $2 million-a-year.

"I think the broader message, not just for us but all of businesses and developers is, ‘If you come to Chester and build, the rules can change and we may tax you after you're successful," Sakiweicz said to the Delco Times. "These types of taxes are negotiated at the front end, not after everything is up and running."

For a fledgling franchise that has had problems with winning in 2012 and has angered fans through the loss of former team captain Faryd Mondragon to Colombia, the trade of fan favorite Sebastien Le Toux to the Vancouver Whitecaps and the possible trade of current captain Danny Califf to Chivas USA, an increase in expenses that would most likely affect ticket prices could be potentially harmful in the long run.

For more on the story, visit the Delco Times, who have covered the situation well.