Council on Foxwoods: all sound and fury

April 30

By Kellie Patrick Gates
For PlanPhilly

Members of City Council’s Rules Committee made it clear Wednesday that they are not thrilled with the site where Foxwoods intends to build a casino complex, but they took no action on a proposal to grant the casino the zoning it needs to operate there.

That’s because they couldn’t. The State Supreme Court already ruled on April 2 that Foxwoods has its Commercial Entertainment District status. City Council has asked the Court to reconsider its decision, but unless and until the court acts “there isn’t much we can really do on it,” said Council President Anna Verna after she announced the committee would stand in recess until further notice.

Foxwoods spokeswoman Maureen Garrity said the casino sent representatives to the hearing out of respect for City Council, but the proposed legislation is a moot point in light of the Supreme Court’s decision.

Brian Abernathy, spokesman for Councilman Frank DiCicco, who submitted the proposed legislation, said that while the legislation was moot, the process wasn’t, and it was important for council members to ask questions of the administration and of Foxwoods, and to hear from the public. 

The Supreme Court stated that it granted Foxwoods its zoning because City Council had been intentionally stalling on the issue – the same reasoning the court gave when it awarded SugarHouse Casino its CED in December.

City Council has asked the court to reconsider on the basis that Council had been moving the process forward – through the legislation that the Rules Committee met about Wednesday, which was submitted by Councilman DiCicco more than two months prior to the Supreme Court’s decision.  Douglas Oliver, spokesman for Mayor Michael Nutter, said the City is considering whether to file a brief statement in support of Council’s position.

DiCicco’s proposal contained many caveats, including a community benefits agreement, improvements to public safety and traffic congestion, an economic impact study for the surrounding area, a satisfactory agreement between the developer and the City and Council’s approval of the city’s plan revisions necessary for the project. Foxwoods would need to acquire the right to build on the riparian lands of the Delaware River through the state legislature. Committee members Wednesday asked questions and heard passionate testimony on these issues and others.

Relocation

No meeting related to casinos happens without some members of the public pleading that Foxwoods and the city’s other proposed casino, SugarHouse, be moved to different locations, away from neighborhoods and the waterfront. This time, two state representatives – Mike O’Brien and Bill Keller – said that they will soon introduce legislation that would re-open the location issue, and that State Sen. Vince Fumo will introduce a companion bill in the senate.

Should the bills pass, the casino developers, city and state officials and neighborhood residents would work together to choose two alternative sites. The Gaming Board would hold hearings, and within 120 days would issue a report containing a list of alternative sites. Foxwoods and SugarHouse would then have 30 days to respond. The bills also would remove the rule that no casino can be located within 10-miles of Chester’s Harness Racing Track slots – which would open up the Philadelphia International Airport as a possible site.

The bills will be introduced sometime this week, O’Brien said Wednesday evening.
    
“The suggestion that these projects can simply be moved to another site fails to take into account the reality that hundreds of millions of dollars have already been spent in acquisition, development, licensing, and planning costs based on the good faith reliance that the City and State governments would do what the current legislation requires them to do,” Foxwood’s Garrity said in a written statement.

It also ignores the fact that the Supreme Court has already given Foxwoods the right to build at its current site, she said.

Riparian/submerged lands rights
 
O’Brien and Keller also spoke about riparian rights – also known as submerged lands rights. Basically, this is permission to build on the publicly owned lands along, or sometimes under, the river. But nothing about riparian rights is basic or simple in reality.

When the Gaming Control Board chose SugarHouse and Foxwoods to build Philadelphia’s two casinos, both plans required riparian rights.

Now, Foxwoods says it doesn’t need them, while SugarHouse says it already has them, as they were awarded by the city Commerce Department in the waning days of the Street administration.

The city, city council, Philadelphia’s waterfront legislators and SugarHouse are fighting in State Supreme Court over whether Philadelphia can issue those submerged land permits, or if only the state legislators have that authority. SugarHouse says the City can, and all the other parties say it cannot.  The most common way to get riparian rights in Pennsylvania has long been through the General Assembly. But no legislator was keen on introducing legislation for either proposed casino. The two proposed casinos responded in different ways.

SugarHouse attorneys found a 1907 law which they said gave the casino another route to riparian rights. The law gave the precursor to Philadelphia’s Commerce Department the right to issue such permits. The Street administration agreed with SugarHouse’s attorneys that this law was still valid, and the Commerce Department issued a permit. But the Nutter administration agrees with state legislators that the 1907 law was superceded by the Dam Safety and Encroachment Act of 1978, and that the legislature. This is the heart of the case the state Supreme Court justices are currently weighing.

Foxwoods’ developers changed their building plans, pulling in a promenade. “Foxwoods did not request a riparian license from the state or the city. Our position is that we don’t need it for this development,” attorney Carl Primavera told the committee Wednesday.

O’Brien and Keller did not agree. They say the project still requires riparian rights, and that the dispute exists because Foxwoods’ definition of riparian land is incorrect.

Foxwoods is using a common definition – one established by the U.S. Secretary of War in 1940. Under this definition, riparian land is that between the bulkhead – or the place where a bulkhead should be – and the pierhead – the furthest limit to which a pier can be built, so that it does not interfere with the shipping channel.

Primavera and other members of his team showed the council members a map of their site, showing that the casino project does not extend beyond the bulkhead line.

But O’Brien said the valid definition does not set the boundaries at the bulkhead and pierhead, but at the high water mark and low water mark, as stated in Black’s Law Dictionary. Riparian lands were established when the British Crown gave them to the Commonwealth, he said, and they were based on the flow of the river in 1787.

During his testimony, Keller showed a map of the river back then, and it sliced through the current Foxwood site.

O’Brien said the bulkhead/pierhead boundaries may have been used for a time, but the U.S. Army Corps of Engineers deleted the bulkhead and pierhead lines in 1990. He submitted a copy of the public notice of this change for the record, and in it, Lt. Col. Kenneth Clow wrote that he decided to delete these harbor lines in the Delaware, Schuylkill and Christiana Rivers because other laws and regulations protect the navigation channel that they were designed to protect.

Primavera said that Foxwoods was using the same riparian lands definition as the state, and that O’Brien and Keller’s would amount to creating a new set of rules.  Changing the rules would mean that Walmart and other large developments are actually on riparian land, he said, because it was the bulkhead/pierhead boundaries that were used for them.

Agreements made with the Street administration

Committee members were greatly displeased with a development and tax and claim settlement agreement that Foxwoods reached with the previous administration on Jan. 4, and they gave the city’s legal department a lot of homework to do regarding the terms and how they were reached.

For example, Foxwoods agreed to pay $1.75 million to settle back real estate taxes owed on the property through 2007. But neither City Solicitor Shelley Smith – who came to the position after Mayor Nutter took office, nor Chief Deputy Solicitor Jim Leonard – who served in the Street administration but was not directly involved with the negotiations – could tell the council members how much money was actually owed the city.

The casino has paid half the amount, Leonard said. The second installment is due 90 days after Foxwoods opens or Jan 31, 2011 – whichever comes first.

The agreement was negotiated on behalf of both the city and the school district by Smith’s predecessor, Romulo Diaz, Smith said.

Another stumbling block for the council members: The agreement says Foxwoods will pay its “fair share” of the cost of traffic-related improvements, such as an additional I-95 ramp, should they be needed.

Smith said she interpreted this as meaning that the amount would be relative to the percentage of traffic on such a ramp was the result of the casino.

Foxwood’s Primavera said early on the planning process, the casino was prepared to get more specific about traffic remediation. But PennDOT had advised against that, saying it was too soon to tell what conditions might exist in the future and what might be needed to alleviate them.

But council members wanted something more substantial. ” ‘Fair share'” is not a legal term that I have ever heard,'” Councilman Bill Green said.

Councilmembers were also displeased to learn that Foxwoods’ contribution toward public safety is based only on the anticipated number of 911 calls generated at the casino.

DiCicco called for more specifics from here on out, but there may not be any changes made.

“What is your legal opinion on our standing to go back and re-do the agreement?” asked Councilman James Kenney.

“I’m not sure we have found a basis to re-negotiate,” Smith replied.

Terry Gillen, senior advisor to Mayor Michael Nutter, said the city continues to examine the issue.

Green suggested that Diaz acted improperly when he entered into the agreement, specifically where it relates to the 10-year tax abatement plan.  He usurped powers that belong to council, Green said, and that could be a way to fight the agreement.

Primavera suggested that council members were seeing the agreement in the wrong light. He said Diaz drove a hard bargain with Foxwoods, and made it clear that the project would not go forward without these concessions.

The money for traffic abatement, improvements to the sewer system, emergency calls and other things goes beyond what is required of Foxwoods, he said. “The biggest misconception is that the development agreement is supposed to provide revenue” to the city, he said. Most of the revenue will go to the state, which will then send it back to the city to pay for streets, police, and other things. In that way, the casino is “self-funding,” he said, so whatever is in the agreement is icing.

From the public
 

Philadelphians on both sides of the issue pleaded passionately in favor of Foxwoods or against its planned location. The reasons for or against are those familiar to anyone who has been following the saga.

The largest and most vocal contingent urged council members to do something to move the casino elsewhere, and some of them hissed or heckled during Foxwoods’ presentation,  or when those who want the casino spoke.

Among the concerns of those who don’t want Foxwoods in the neighborhood: The casino will bring too much traffic, drunk drivers, and the loss of small businesses in the area.

Center City resident Sharon Johnson said she had just returned from visiting St. Louis, which already has casinos.  She saw the arch, and then went to an area the guidebooks said had nice shops and restaurants. “We passed empty storefront after empty storefront,” she said. “The casinos were full, the city streets were empty.”

But some city residents and representatives of the business community said they were concerned about what would happen if the casinos aren’t built. They worried that the city could miss out on jobs and on an opportunity to lower the wage tax.

“We need these casinos real badly,” said South Philadelphia resident Terry Bennett. He said he has worked in casinos for more than 20 years, and he disputed the notion that casino jobs are not good-paying jobs. “I raised my family working in casinos,” he said, and a casino job also funded his college education and allowed him to buy his home.

Contact the reporter at kelliespatrick@gmail.com