Potential bidders line up for Philadelphia's second casino license

The SugarHouse Casino on the Delaware River waterfront in Fishtown opened in 2010.
The SugarHouse Casino on the Delaware River waterfront in Fishtown opened in 2010. (MATT ROURKE / Associated Press)
Posted: July 23, 2012

It's a new hand in the competition for Philadelphia's second casino license with some familiar names, a few new ideas, and a city anxious to see how the chips may land.

Facing a Nov. 15 deadline to submit applications to the Pennsylvania Gaming Control Board, potential bidders are scrambling behind the scenes to put together deals.

Two developers - Philadelphia's Bart Blatstein and New York's R. Donahue Peebles - already have announced their competing intentions to operate a casino here.

Though Blatstein has a site - the historic former headquarters of The Inquirer and Philadelphia Daily News at 400 N. Broad St. - neither has lined up a casino operator as a partner.

Blatstein, who said in April he wanted to use the old newspaper building as an anchor for an entertainment and hotel complex, has had a head start in looking for a casino partner.

"We're pretty far along in the process," he said. He declined to name names, but said, "I've been approached by a lot of operators."

A spokesman for Peebles, one of the nation's largest African American real estate development companies, had no comment.

A further five groups, mostly local property owners and developers, are exploring their options, according to development and government sources.

The big question is whether gaming companies and lenders believe the region can support another casino. In 2006, state regulators awarded licenses to the SugarHouse and Foxwoods projects. (The Foxwoods investors included a family trust created by the daughter of Lewis Katz. Katz, a New Jersey lawyer and entrepreneur, now is a managing partner of the company that owns The Inquirer.)

But after repeated delays, the gaming board revoked the Foxwoods license in 2010. SugarHouse opened in Fishtown in 2010 and is today joined by Parx in Bensalem, the rebranded Harrah's Philadelphia in Chester, and the Valley Forge Casino Resort.

The five groups and individuals to watch in addition to Blatstein and Peebles are:

Cordish Cos. Sources say the privately held Baltimore developer may be exploring a South Philadelphia location for a casino. A national company, it has a track record in gaming, having built the Hard Rock hotels and casinos in Tampa and Hollywood, Fla. Closer to home, Cordish recently developed Xfinity Live! with Comcast-Spectacor at the Wells Fargo complex. A spokeswoman for Cordish did not respond to requests for comment.

Parkway Corp. Robert Zuritsky, Parkway's president, said the parking company had "a number of sites in Center City that could handle" a casino, including lots near the Convention Center expansion. He said Parkway was not interested in running a casino, but would rather partner with someone who is. "We've been looking a little bit and talking," Zuritsky said.

Property owner James J. Anderson. A New Hope construction company owner, Anderson holds one of the biggest undeveloped parcels on the Delaware River. In 2006, Pinnacle Entertainment had an option to buy 27 acres in Fishtown from him. But Pinnacle lost out. Does Anderson want back in? "It's a very interesting idea," said Kevin Feeley, a spokesman for Anderson. "He is considering all of his options and waiting to see what develops."

SS United States. It's an unorthodox idea, first suggested in 2010, that calls for incorporating the decaying ocean liner into a casino project. Political consultant Ken Smukler is pushing the concept and has been talking to the conservancy that owns the ship, now moored on the Delaware River. Philanthropist H.F. "Gerry" Lenfest saved the SS United States from the scrap heap with a $5.8 million donation in 2010, and, Smukler said, likes the thought of using it as part of a casino. Lenfest is a partner in the group that owns The Inquirer.

The Goldenberg Group. The Blue Bell developer owns a parking lot in the 800 block of Market Street, where it had planned the "DisneyQuest" entertainment complex in the 1980s. Ken Goldenberg said he was "fully exploring the possibility of a casino at Eighth and Market Streets as part of a significant multiuse complex worthy of this strategically located site."

With less than four months to go, all contenders will have to submit boxloads of documents to the gaming board. These will detail the names and backgrounds of key investors and executives, who will operate the casino, information about the site and impact on the community, and how the group will pay for licenses - $50 million for slot machines, $16.5 million for table games - as well as construction plans.

Doug Harbach, a spokesman for the gaming board, said commissioners would hold public meetings in Philadelphia to hear from individuals, organizations, and public officials. A decision could take nine to 12 months from the November deadline, he said.

"We will try to make sure that no one from either side walks away feeling they weren't heard," Harbach said. The board will try to provide more and faster information on each application, he added.

Gambling foes are gearing up for another fight. Dan Hajdo, a spokesman for Casino-Free Philadelphia, argues that casinos prey on lower-income, minority populations. His group will try to add partners from neighborhoods "most heavily impacted by predatory gambling," he said.

The last time around, the gaming board selected two projects on the Delaware River waterfront - choices that won the endorsement of Mayor John F. Street but got torpedoed by Mayor Nutter.

The prospect of two big-box casinos on the riverfront ignited fierce debate over how the central Delaware waterfront should evolve. "The siting of the casinos was done by applicants in a vacuum," said Harris Steinberg, executive director of PennPraxis, a project-based affiliate of the University of Pennsylvania's School of Design.

Since then, the city has adopted a new plan for the central Delaware that does not encourage big-box structures of any kind. "The gaming board cannot come in and supersede the will of the people by plopping down something on the river that's contrary to the plan," said State Rep. Michael O'Brien, a Democrat whose district includes much of the Delaware waterfront.

This time, Deputy Mayor Alan Greenberger wants all applicants to talk to the city about sites and plans ahead of time.

For instance, he said, anyone who tries to develop the former 16-acre Foxwoods site in South Philadelphia, on South Columbus Boulevard, will get a list of 60 questions and issues from his office about access problems. "No one wants to see another decision made with a project that doesn't make it," Greenberger said.

He said the city wants economic leverage from any casino project. That could range from road improvements to making a casino part of a hotel complex for the Convention Center.

As the process moves forward, he said the City Planning Commission, which he also heads, will clear up whether a casino would be permissible in the stadium district of South Philadelphia.

By law, any casino in Philadelphia has to be 10 miles from competitors outside the city. The planning commission will determine the 10-mile boundary from Harrah's in Chester.

"We don't have a favorite yet," Greenberger said. "We want to see what proposals come up through the system and thoroughly analyze them."


Contact Jennifer Lin at 215-854-5659, jlin@phillynews.com,

or follow on Twitter @j_linq.

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