The reputed new owners of the Pittsburgh casino have suggested possibly holding a contest to rename the as yet, unfinished structure.
Don Barden told the Pennsylvania Gaming Control Board July 10 he would transfer control of the North Side casino to Walton Street Capital, a group led by billionaire Chicago investor Neil Bluhm. Barden said he had no choice after defaulting on the $200 million loan he used to begin construction in April.
Given the similarities between the launching of the erstwhile Majestic Star and the ill-fated liner Titanic, perhaps the casino should be renamed the White Star, after the defunct shipping line.
DON BARDEN
With Barden tentatively holding a 25 percent share but retaining the gaming license, and partners like Smokey Robinson and Jerome Bettis holding nothing, it will be white in most respects.
“My dream will come true. I’ll still be a part of it,” Barden said after meeting the board. “But those with the gold make the rules.”
But two state senators believe they and their elected colleagues make the rules. On July 14, sens. Jane Orie, R-McCandless, and Jim Ferlo, D-Lawrenceville, wrote gaming board chair Mary D. Colins asking that Barden’s license be revoked and that a bidding process “that ensures transparency and fairness” begin again from scratch.
Calling the refinancing deal an unacceptable “bait and switch,” they argued that a change in ownership amounts to an end-run around the approval Barden won when his license application beat out Forrest City Enterprises and Isle of Capri in December 2006.
“It is the statutory duty of the Gaming Board to protect the public interest, not to save a distressed casino investor and rescue a faltering development project,” they wrote.
In a near simultaneous request, five Republican State House representatives led by Mike Turzai, R-Ross Township, asked the board to place Barden’s license in trust as it did in appointing a trustee to run the Mt. Airy Casino Resort after casino owner Louis DeNaples was indicted on perjury charges in February.
Both requests, said gaming board spokesman Doug Harbach, came to the board before the new financing plan.
“Nothing has been submitted so far,” he said. “When we get the signed paperwork, we’ll initiate a review and decide when to have a hearing.”
Should the Walton Capital deal be finalized and be approved by the board, construction, which halted last month after Barden failed to make $10 million in overdue payments, could restart within two weeks, said prime contractor Dan Keating III.
The Bluhm family has ownership stakes in three casinos; two in Niagara Falls, Ontario; and Vicksburg, Miss., and Philadelphia’s SugarHouse Casino, which has yet to start construction due to community opposition. Greg Carlin, who manages the family’s casino business, and who will be part of the investment group, said they plan to be a “good corporate citizen.”
He said the new ownership group will make the $9 million in annual payments for a new Penguins arena and economic development projects in the North Side and in the Hill District promised in Barden’s original application.
He said the original plans for outdoor amenities such as a paved riverside promenade, amphitheater and a boat dock will be included in the first phase of construction. Barden had sought permission from the control board to eliminate those features as he scrambled to reduce costs and secure funding in June.
Under the deal outlined to the board Bluhn would make a $120 million equity investment, added to a $150 million second mortgage from Key Bank and $500 million loan from international banker Credit Suisse—the same loan Barden was unable to finalize. Another $10 million is expected from Philadelphia real estate firm Lubert-Adler.
Though Bluhm, his son and Carlin have been vetted by the gaming board, the other investors have not. If the new financing documents arrive quickly, Harbach said, a hearing could be held within a week.
“It’s possible,” he said. “It depends on when we get it, how detailed it is and how much investigation we have to undertake.”
Reacting on July 15, Pittsburgh Mayor Luke Ravenstahl said, whatever happens regarding the casino’s ownership, it should be built on the current site.
“We need to make sure that [Mr. Bluhm’s] group is capable, and is going to live up to the commitments that have been made,” he said. “I do believe that if (the license) were to be rebid or revoked, it should be everybody’s goal to put it where it is now.”
The signed agreement had not arrived as of New Pittsburgh Courier deadline.
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