Buyer of Inquirer building plans a casino and more on site

Posted: April 13, 2012

In defeat, developer Bart Blatstein found an idea:

If he couldn't operate newspapers at 400 N. Broad St., he would turn the Inquirer/Daily News building he bought last year into the anchor of a $500 million casino and entertainment development.

Blatstein was locked out of bidding to buy The Inquirer, Daily News, and Philly.com, which were sold last week to a group of local investors and will relocate to offices at 801 Market St.

As he considered his options, Blatstein said, he stood atop the parking garage next to The Inquirer building one day, took in the Center City skyline, and thought - casino!

Not just a casino, but also a hotel in the white tower of the historic newspaper building, a concert venue, restaurants, banquet space, indoor parking, and stores.

"It's everything," Blatstein said during an interview on the rooftop of neighboring property he owns on North Broad at Spring Garden Street, the former State Office Building, which will open early next year as the Tower Place luxury apartments.

Blatstein is focused on reviving North Broad Street in the same way that he provided an investment spark a decade ago to ignite Northern Liberties.

He said he bought The Inquirer headquarters for $22.7 million last year as a "bookend" to his investment in Tower Place. He also owns the adjacent garage and recently bought another garage in the 1600 block of Callowhill. "This is a sleeper of an area," he said.

The casino, he explained, would front Callowhill Street between 15th and 17th. While the white tower would remain, the back end of the building at 400 N. Broad, which currently houses the main Inquirer and Daily News newsrooms, would be demolished and rebuilt as mixed-use space and parking.

While not naming names, Blatstein said casino operators already have reached out to him about his project.

Financing, he said, would not be a problem, given his track record of successful development in Northern Liberties and around Temple University. His Piazza at Schmidts in Northern Liberties is heralded as a model for urban redevelopment, and Blatstein was one of the few active developers during the recession.

'Guarantee'

"I personally guarantee this project," Blatstein said. "There are no obstacles in my way - other than getting a license."

But that is a big hurdle.

Legislators in Harrisburg are debating what to do about the second of two casino licenses reserved for Philadelphia.

The investor group behind the Foxwoods Casino - including a family trust related to Lewis Katz, one of the new owners of The Inquirer, Daily News, and Philly.com - lost its license last year and exhausted all of its appeals in state courts.

Under Pennsylvania gaming law, the city is supposed to get two of the 14 licenses for casinos. But with the revocation of the Foxwoods license, Philadelphia has only one casino - SugarHouse on North Delaware Avenue in Fishtown.

Some legislators don't think the Foxwoods license should stay in Philadelphia. A bill under consideration in the House would open up the bidding for the second license to locations other than Philadelphia.

'A nice plan'

If the bill passes, Blatstein could still succeed in getting a license, but he would face wider competition.

State Rep. Michael O'Brien (D., Phila.), who sits on the House Gaming Oversight Committee, called Blatstein's project "a nice plan," but added that the licensing decision would not be made in Philadelphia, but in Harrisburg.

"This is about revenue," he said, and at this point, many in Harrisburg see the Philadelphia gaming market as saturated. In addition to SugarHouse, the region hosts the Parx Casino in Bensalem, Harrah's Chester, and the new Valley Forge Casino Resort near King of Prussia.

Senate Majority Leader Dominic Pileggi (R., Delaware) said there was "substantial doubt" in the General Assembly about another casino in the city.

"Is Philadelphia the best place to put it?" Pileggi said. "Is there a better place that would benefit the commonwealth more?"

Mayor Nutter wants the license to stay put.

"Mr. Blatstein's proposal, as well as other ideas from other potential casino developers, are indications that business interests see real opportunities to create jobs, spur economic development, and provide more revenue to both the city and commonwealth," said Mark McDonald, a spokesman for the mayor.

With the Blatstein bid and any others, state regulators have indicated that they will not be rushed.

William H. Ryan Jr., chairman of the Pennsylvania Gaming Control Board, said in a statement it would be "prudent and responsible" to give the legislature more time to weigh the issue before starting a new licensing process.

The House is expected to vote on the matter later this month.

Blatstein, meanwhile, said he was moving ahead "at lightning speed." He has hired the Las Vegas-based Marnell Consulting to design the project and has completed a traffic-impact study, with an economic report on the way.

"I will stake my whole reputation and 35 years in business on it," he said. "Just give us the license."

City Council President Darrell L. Clarke said the site's proximity to the Vine Street Expressway could be a boon for the project.

"I think it's very interesting and exciting, considering how it could maximize the opportunity to bring customers from outside the city of Philadelphia," Clarke said.

With all the development on North Broad Street and the proximity of the project to the Convention Center, Clarke said, "it has potential for much broader appeal."

John Dougherty, business manager for Local 98 of the International Brotherhood of Electrical Workers, supports the project so much that his union has approached Blatstein about being an investor.

"We would most definitely be interested in investing in an economic-development project on North Broad Street that would have a casino," Dougherty said.

He said that, between the Convention Center expansion and Temple University projects, the corridor has "synergy."

"We believe," Dougherty said, "North Broad Street has a tremendous amount of growth."


Contact Jennifer Lin at 215-854-5659

or jlin@phillynews.com, or follow

on Twitter @j_linq.

Staff writer Miriam Hill contributed

to this article.

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