Gambling board hearing focuses on the money

By Andrew Conte
TRIBUNE-REVIEW

Pittsburgh's casino applicants pushed aside the celebrities, the Penguins and the talk of a new arena long enough Wednesday to finally focus on money.
The backers of Harrah's Station Square Casino came under fire for projecting that their casino could bring in more than $617 million by the second year -- about a third more than anyone else.

"It's not clear to me how one company will generate significantly greater revenue than any others," said Steven Rittvo, president of Innovation Group, a consulting firm.

He spoke on behalf of Isle of Capri Casinos near the end of the second day of public testimony before the state Gaming Control Board, whose members have heard testimony from scores of politicians, community groups and local citizens.

The board expects to award the city's slots license in mid-December.

Don Barden, the Detroit businessman behind Majestic Star Casino's application, quickly agreed with Rittvo's assessment. Barden expects his casino could bring in $478 million a year.

"We also believe you should promise what's realistic," Barden said.

Cleveland-based Forest City Enterprises, which would own 75 percent of the Harrah's casino, stood by its assessment. Albert Ratner, the company's co-chair, said the company expects to make $100 million a year more in tax payments than either of its competitors.

"These are not pie-in-the-sky figures," he said. "But more importantly, if we're wrong, it's our money that's being lost."

Pittsburgh's casino will pay taxes to state and local governments equal to 54 percent of the money it brings in after paying winners. Thirty-four percent of the casino's revenue would go for property-tax relief, while Allegheny County and Pittsburgh each get 2 percent. The arena would be funded using the casino's profits.

Each casino applicant received 15 minutes to conclude the hearings yesterday, but the public held the floor for most of the day. And once again, talk about a new multipurpose arena dominated the discussion.

Half of the 53 speakers yesterday supported using slots money to build a new arena, with the overwhelming majority of those specifically endorsing Isle of Capri, which would pay $290 million for an arena if it wins the license.

A fifth of the speakers favored the Harrah's proposal, while more than a quarter did not support any one project. Few speakers praised the Majestic Star proposal by name.

"It's now clear the (Penguins') fate is directly tied to the issuance of a slots license," said Michael Mooney, creator of a Web site called SlotsforMario.com, claiming that 36,000 people had signed a petition to support using gambling money for an arena.

Ratner reiterated his company's offer to work with the hockey team on a new arena if the Penguins first commit to staying in Pittsburgh. The team is up for sale.

Majestic Star has agreed to pay $7.5 million a year for an arena under a plan by Gov. Ed Rendell and local leaders, while Forest City has said it supports the proposal but has not said what, if anything, it would pay.

"They're using the arena so they may sell the hockey team at a higher price," Ratner said.

David Morehouse, the Penguins senior consultant, shot back that the team would not be "lectured by a developer from Cleveland about our commitment to Pittsburgh."

Arthur Ziegler Jr., president of the Pittsburgh History & Landmarks Foundation, praised the Harrah's proposal, which includes a $25 million endowment for his group

"It's easy to say our organization benefits," he said, "but our benefit goes to all of the parties involved in revitalizing our city through our historic assets."

Mark Fatla, executive director of the Northside Leadership Conference, said the neighborhood groups he represents had negotiated a letter of agreement with Majestic Star Casino, which would locate on the North Shore. The letter addresses the community's concerns about potential negative effects, he said.

"We found them to be desirous of a true partnership with the community," Fatla said.



Andrew Conte can be reached at aconte@tribweb.com or (412) 765-2312.