SugarHouse asks Supremes for relief

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January 8

A little more than a week after a group of Philadelphia state legislators asked the state’s gaming regulatory body to revoke SugarHouse Casino’s gambling license, the gaming concern filed a petition with the Pennsylvania Supreme Court that asked the high court to enforce its December 2007 order that called for the city to process permits that would enable SugarHouse to begin construction.

SugarHouse also asked the court to appoint a special master who would oversee any future conflicts between the city and HSP Gaming LP.

“We do not take this action lightly,” said Stephen A. Cozen, Counsel for HSP Gaming, the partnership behind SugarHouse. “Since being selected by the Gaming Board, we have worked in good faith to receive all of the approvals needed to begin construction of our project. It is clear that the City has failed to comply with the Supreme Court’s December 2007 Order.”

HSP press release

On Dec. 30, State Rep. Michael O’Brien, whose district includes the SugarHouse property, and Larry Farnese, the incoming state senator for the First District which also includes SugarHouse, “objected to SugarHouse’s request for a one-year extension on its license, issued Jan. 10, 2008.” The Inquirer reported that they were joined by State Sen. Michael Stack and Reps. Bill Keller, John Taylor and Mike McGeehan.

“The legislators argue that SugarHouse should forfeit its license for failing to build even a temporary location within a year of getting its license, as required by state law. The issue is likely to come before the Gaming Control Board for a hearing.”

(http://www.philly.com/philly/news/pennsylvania/36869614.html)

Soon after, Casino-Free Philadelphia weighed in on the matter with the Gaming Control Board. (http://www.planphilly.com/node/5827) Among other complaints, the group questions the SugarHouse owners’ financial ability to construct its project, which in 2006 was estimated to cost $550 million for Phase I its project.

That estimate would be considerably higher if issued today, city development experts say. More importantly, SugarHouse’s ability to get proper loans – mezzanine, construction, permanent, what-have-you – is just like every other development around the country right now: In limbo, as billions in bailout money oozes its way into the gears of a national economy that no longer has any investment banks. Even loans agreed-upon in writing for blue-chip properties, in Manhattan or Las Vegas, for example, have been pulled. Some projects have even been stalled mid-construction, if not outright cancelled.

SugarHouse has been barred from building its Delaware waterfront site by City Council and the Nutter administration, which wants the slots parlor to be located elsewhere. The developers are also still waiting for approval from the Army Corps of Engineers. In late 2008, the Supreme Court appointed a special master for Foxwoods after that gaming concern complained that the city was dragging its feet in the permitting process. Foxwoods is now contemplating a move to The Gallery at Market East.

Terry Gillen, Mayor Nutter’s point person on casinos, told PlanPhilly earlier that the city is in compliance with the permitting for SugarHouse.

“I’m just going to say we’re complying with the law. We’re doing everything carefully, we’re doing everything legally, we’re doing everything as required. I’m sure that nothing moves as fast as they would like, but we’re being very careful.”

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