Phila. to present casino findings soon

Posted: September 02, 2013

With a second casino license for Philadelphia in play, two questions top the list of concerns for the Nutter administration:

Which of the six projects has the best odds of delivering to the state and city the revenue they promise?

And which would do the least harm to the city's first gaming hall, SugarHouse Casino?

"That's a critical set of questions to suss out," said Alan Greenberger, deputy mayor for economic development.

For months, economic analysts at AKRF in New York have been examining those issues for the Nutter administration.

City officials will present their findings and recommendations to the gaming board at a special hearing in Philadelphia on Sept. 24.

Greenberger said he doubted his testimony would include an endorsement of one project over all others. But he added that the city wants to state its preferences and priorities clearly to gaming commissioners.

"I want our testimony to be as explicit and clear as possible about what we think are the advantages and disadvantages of each project," he said. "And I would like to be in the position to say there are some proposals that are preferred over others."

The impact of another casino on SugarHouse is a critical issue, Greenberger said, because of the millions the business generates in tax revenue.

As a "host" municipality, Philadelphia has gotten a direct tax stream from SugarHouse: $16.5 million for public schools and $7.6 million for general city services since the casino opened in 2010, according to the Pennsylvania Gaming Control Board.

In addition, Philadelphia receives a share of the overall tax money generated by the state's 12 casinos. That has amounted to $86.3 million since 2006, which the city has earmarked for lowering wage taxes. (In other parts of the state, gaming tax revenue goes toward lowering property taxes.)

With a second casino, the city wants to minimize any damage to SugarHouse. Gaming experts have warned that with four casinos in the city and suburbs, the market is saturated and any additional facility would skim revenue from others.

The question the city is evaluating, Greenberger said, is whether some of the projects present "more likelihood of cannibalization."

Of the six contenders, three are in the stadium district of South Philadelphia: Casino Revolution; Live! Hotel & Casino; and Hollywood Casino Philadelphia.

Wynn Resorts, which has an option on a 60-acre site north of SugarHouse, is the only one proposed for the Delaware River waterfront; the other two projects, Market8 and the Provence, would be within walking distance of the Convention Center in Center City.

Greenberger said the city would like to see some economic spin-off from a casino project. With price tags ranging from $400 million to $925 million, the investment could spur additional development in the city, he said.

"We're not looking at these as a panacea for economic development in the city of Philadelphia," Greenberger said. "But we'd like to get the most spin-off economic value from things as we can, and do it responsibly with negative impacts minimized."

The last time the state awarded casino licenses in Philadelphia, city officials had little influence in the final decision. In 2006, when the gaming board considered five proposals for two licenses, then-Mayor John F. Street appointed a 70-member task force to evaluate each. He then came out in favor of the Riverwalk Casino project.

But in the end it was a moot point. The seven gaming commissioners voted to award the licenses to SugarHouse and Foxwoods Casinos.

The group behind Foxwoods lost its license in 2010 because of repeated delays, including stiff opposition from the city. The Nutter administration believed the project did not fit the city's emerging plans for redeveloping the central Delaware waterfront.

This time around, there are more proposals, but only for one license. Veterans of the bidding process said that could create problems. A "qualified majority" of commissioners has to approve a licensee.

Specifically, the four commissioners who have been appointed by the Republican and Democratic caucuses in the House and Senate have to line up behind the same project. Of the remaining three board members, who were named by the governor's office, at least one has to support the preferred project.

With so many contenders, that could create a political quagmire, said a lawyer familiar with the selection process. "This is potentially going to be a very hard deal to cut."


Contact Jennifer Lin at 215-854-5659, jlin@phillynews.com, or follow on Twitter @j_linq.

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