Rendell will ask casinos to move

Photo by Isaac Steinberg

July 9

By Kellie Patrick Gates
For PlanPhilly

Governor Ed Rendell hopes to convince developers of Philadelphia’s two proposed waterfront casinos to relocate, his spokesman said Monday.

The governor will make his pitch during an upcoming meeting with casino principals, local state legislators and Mayor Michael Nutter. Two state legislators – Rep. Dwight Evans and Sen. Vincent Fumo –  held a late-night, July 3rd press conference announcing that the entire Philadelphia delegation was now in favor of relocating the casinos, and that a meeting had been called.

“This meeting is intended to get all the parties together to discuss the situation, and hopefully convince the (casino) operators that it would behoove them to move,” Rendell spokesman Chuck Ardo said.

Evans had never taken a relocation position before Thursday night. In fact, earlier that day, he led an effort to thwart the introduction of an amendment that would have excluded the casinos from Philadelphia’s 10-year tax abatement program. 

Fumo – in whose office the legislation that brought casinos to Pennsylvania originated – had never used such strong language. He threatened a legislative “atomic bomb” if the casinos didn’t cooperate.

It was clear to the governor, Ardo said, that the political climate had shifted.

“Given Sen. Fumo’s very strongly worded warning that he would tie up the casinos for as long as he could to prevent any construction from happening … and a change of leadership in Philadelphia City Hall, the governor believes that the political landscape has changed and the (casino) operators need to consider the new reality,” Ardo said.
 
Rendell wants the casinos to move because he wants them to open as soon as possible. The revenues they generate are pegged to provide property tax relief across the state and wage tax relief in Philadelphia.  “He certainly is concerned that further delays would be problematic if they don’t” move, Ardo said.

The state legislators who represent Philadelphia’s riverfront neighborhoods have been united in fighting the casinos at their current locations.  But the addition of the rest of the contingent, especially House Appropriations Committee Chairman Evans, the governor’s change of heart, and the upcoming meeting has stirred up the casino activists on both sides of the casino issue.

Casino-Free Philadelphia’s Daniel Hunter said the casino re-siting battle has become “hugely, significantly different” now that the governor and Evans are on-board.

Jeremy Beaudry, a founding member of Neighbors Allied for the Best Riverfront, saw the meeting – which is to take place within the next two or three weeks – as the culmination of years of work by his organization and others. “This is the conversation we’ve been pushing our governor and our legislators to have over the past two years,” he said.

But some would-be casino neighbors want the casinos to come to their communities. And Maggie O’Brien, a leader of pro-casino Fishtown FACT, said many of them were calling, emailing and texting her and the other FACT officers over the weekend.

The opposition to the chosen locations isn’t new, she said, but the governor’s position, “that scared people. Before, we knew he was in our corner.”

FACT leaders told those who contacted them not to panic, because no one can make SugarHouse move.

It’s true, says the governor’s office and the Gaming Control Board. Any relocation would have to be voluntary on the part of the casinos.

“We told them that SugarHouse has continually said that they will not move,” O’Brien said. They own that land. They are so far into the project now, financially. How could they move?”

And SugarHouse spokeswoman Leigh Whitaker and Maureen Garrity, her counterpart at Foxwoods, reiterated Monday that they are staying put. Representatives from both casinos will attend the meeting, they said. And they will discuss why the current sites are the best ones.

Officials from both projects strongly disagree with the contention that the quickest way to open casinos in Philadelphia is to move them to new locations.

“We respect the governor, and we respect the governor’s position. We just don’t believe that re-siting is an option,” Whitaker said. “Every battle that we’ve encountered, short of riparian rights if it’s not on the water, only starts over again at a new location.”

Gaming Commission spokesman Doug Harbach said he could not comment much on the effort to resite the Philadelphia casinos “because it  potentially could be a matter in front of the board.”

Any resiting process “would be the same for any applicant that has any changes in plans,” he said. “A casino would petition the board to alter their location and their plans … the board would then investigate it, hold hearings on it, and act accordingly.”

Foxwoods has invested hundreds of millions of dollars in its site, after determining that it was the best place to put a casino in all of Pennsylvania, Garrity said. If the casino agreed to consider another site, other applicants who unsuccessfully sought a casino license would want their sites to be reconsidered again, she said. And the state Supreme Court has already ruled that the casino has the zoning it needs on its site, Garrity said.

“It would be difficult to believe there’s another site out there that has not already been identified and is perfect,” she said.

Garrity and Whitaker said the poor economy doesn’t make it any more likely that the casinos would agree to move. Both said their investors are committed.

SugarHouse has invested $150 million so far, Whitaker said. And the economy does put pressure “on all of us to get these things open, but the state has more to lose than we do.”

Said Whitaker: “On the front end, the project obviously gets more expensive the longer it is delayed. There is a rise in costs, and there is a struggling credit market. But on the back end, with a 55 percent tax rate (on casino revenues) the state has more to lose.”

As for the upcoming meeting, Ardo said  the governor will use “the power of the office in explaining the situation that everyone now finds themselves in” to persuade the casino operators to look hard at other locations.

Would the governor use other means of persuasion – like maybe money?

“I think we’re a long way from making any kind of a financial offer,” Ardo said. Any incentives – if there are to be incentives – are “down the road.”

So confident is CasinoFree that relocation is real that the organization just released suggested guidelines on how it should be done. One of them, Hunter said, is that neither the state nor city should offer financial “bailouts,” to compensate the casinos for the money they’ve invested.

(The other guidelines: The casinos should not be located in any neighborhood, the site-selection process should be transparent, and the possibility that no Philadelphia site will be chosen should also be an option.)

Terry Gillen, senior advisor to Mayor Nutter for Economic Development, agrees that it’s a new ballgame now that Evans and Rendell have switched to the “move the casinos” side. “They bring a lot of power, obviously, to the conversation,” she said. “It’s definitely a change in the dynamic.”

The Mayor would like to see both casinos on different sites, Gillen said. “He’s concerned about traffic issues and design issues and planning issues for both SugarHouse and Foxwoods,” she said. “We are looking closely at what we can do to make these locations better, or, ideally, to find other locations, and to persuade the casinos that they are better off moving.”

In a July 8 letter responding to Evans and Fumo (see the full letter by clicking here), Nutter said he fully expects that two casinos will be built in Philadelphia, but that both the city and the casinos would be “better served” if the sites were changed. The letter outlines some of the problems identified by his staff, including traffic concerns at both sites. It also lists several federal and state permits that the casinos have yet to secure, and some of the obstacles that Nutter says must be overcome before those permits are issued.

” … the obstacles to casino development at the present sites would seem to be practically insurmountable,” the letter states. “Therefore, I look forward to working with you both to identify alternative sites that will protect the interests of all parties involved, including the casinos, the City and the residents of Philadelphia.”  

The mayor and his staff have some particular alternative sites in mind, Gillen said, but she said she could not yet publicly discuss them. She would not say whether any of them are city owned.

 

Contact the reporter at kelliespatrick@gmail.com

 

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