Who's behind the curtain on casino bids?

Casino Revolution would transform existing South Philly warehouses.
Casino Revolution would transform existing South Philly warehouses.
Posted: September 25, 2013

WHAT a difference seven years makes in the casino business.

In 2006, neighborhood groups, anti-gaming activists and elected officials loudly protested as the state Gaming Control Board considered five applications for two casino licenses in Philadelphia.

Now the board is pondering six applications for one city casino license. The process has made only the occasional ripple in Philly's civic consciousness.

Is this the "SugarHouse effect"?

The city's sole casino, SugarHouse, on the banks of the Delaware River in Fishtown, has been open for three years. Maybe Philadelphia has moved on.

We'll find out more at 11 a.m. today in the Pennsylvania Convention Center as the Nutter administration weighs in at a Gaming Control Board hearing on the six competing proposals.

The applicants each offer complex plans, putting together projects that will cost hundreds of millions of dollars.

Perhaps just as importantly, the bidders have built teams with well-connected attorneys, lobbyists and consultants to pitch their projects.

And they've reached out to community groups, tourism marketers and local businesses, promising to be good neighbors.

The business is lucrative.

SugarHouse made $157.8 million after taxes on slot machines and table games in the fiscal year that ended June 30.

The board is expected to award the new license in early 2014.

Here is a look at the bidders and the folks behind the curtain: their backers and the connected people they are employing.

Wynn Philadelphia 

The bidder: Steve Wynn is a rock star in the casino industry, a guy who has won big from Atlantic City to Las Vegas to Macau in China.

Although Wynn serves as frontman, his company's application is controlled by publicly traded stock.

Wynn Resorts stockholders hold 58.7 percent of the project. Wynn owns 10 percent of the project, and his ex-wife, Elaine, owns 7.9 percent.

The backers: Developer Dan Keating, who has worked on 20 casino projects in Pennsylvania and other states, calls gaming "a mature industry" and predicts that the Gaming Control Board will select a bidder with experience.

Keating, who will build the project if Wynn secures the license, owns about 3 percent of the SugarHouse Casino about a mile south of Wynn's proposed location.

John "Johnny Doc" Dougherty, business manager of the politically powerful electricians union, said he favors the Wynn proposal because it will be the largest project, meaning more jobs for union workers, and because he believes that Wynn's national brand and high-end amenities will help elevate Philadelphia's status.

Wynn's biggest source of juice may be his company's bank account. While the other bidders told the board in a February hearing about their financing plans, Wynn was much more direct.

"We have $2 billion in cash," Wynn testified. "We write our own check to build our building."

The connected: Wynn also hired as his lobbyist John Egan Jr., a former chairman of the Philadelphia Stock Exchange, member of the Pennsylvania Intergovernmental Cooperation Authority and two-time Republican candidate for mayor.

A license for Wynn would mean a serious payday for state Sen. Mike Stack III and his family.

Stack, his four siblings and their mother, Philadelphia Municipal Judge Felice Rowley Stack, own about one-fifth of the 60 acres in a real-estate option deal signed by Wynn for the riverfront casino project. Wynn has pledged 1 million shares of his company stock for the land.

That means $20 million to $30 million for the Stack family.

The Provence

The bidder: Developer Bart Blatstein, the man behind Tower Investments, wants to convert the former home of the Daily News, Inquirer and Philly.com on North Broad Street into the Provence, a French-themed entertainment complex with a casino.

To do so, Blatstein has assembled a team with strong political connections in Philadelphia and Harrisburg.

The backers: City Council President Darrell Clarke, a potential contender for mayor in 2015, wrote a "character letter" for Blatstein that was read into the record at a state Gaming Control Board public hearing in May.

In the letter, which Clarke said was not an endorsement of the project, he called Blatstein a "visionary" who has led "transformational projects" on North Broad Street and in Northern Liberties.

The connected: Attorney William Sasso, who served as co-chairman of Gov. Corbett's transition team, served as master of ceremonies at an event in October where Blatstein unveiled his plans.

Brian Nutt, who ran Corbett's campaigns for office, and John Brabender, who did the media for those efforts, join Sasso on Blatstein's casino team.

Blatstein also hired George Burrell, former Mayor John Street's secretary of external affairs, and Steve Mullin of Econsult Corp., where Mayor Nutter briefly worked in 2006 after leaving City Council.

Blatstein is the only bidder who has sole ownership of his project. He has partnered with Isle of Capri, a gaming company that runs casinos in seven states, including a casino in southwestern Pennsylvania.

Market8

The bidder: Market East Associates LP proposes the Market8 casino at 8th and Market streets in a commercial strip that has resisted three decades of economic-revitalization attempts.

The project is spearheaded by Blue Bell developer Ken Goldenberg, who hopes four levels of underground parking below a five-story structure will link the Pennsylvania Convention Center to the west with the city's historic attractions to the east.

The backers: Market8 on Aug. 15 announced with the Philadelphia Convention and Visitors Bureau a new 14-week art series to be held between 13th Street and 6th Street on Market Street on Fridays and Saturdays.

The casino bidders are also pitching a program to allow gamblers to win points at the casino to be redeemed at local restaurants, museums and businesses.

Goldenberg holds 35 percent of the project while his partner, real-estate investment company owner Ira Lubert, holds 25.4 percent.

Lubert also owns 2.768 percent of Rivers Casino in Pittsburgh and 36.4 percent of Valley Forge Casino Resort.

The connected: Market8 has hired Pugliese Associates, a Harrisburg lobbying firm with ties to Gov. Corbett's administration. The firm lists on its websites "accomplishments" including winning licenses for Valley Forge casino and Sands Casino in Bethlehem, along with saying it "assisted" in getting new casino legislation in the state.

Lobbyist Anthony Pugliese joined his father's firm last summer after working in Corbett's administration, on his transition team and for his 2010 campaign.

David Adelman, president and CEO of Campus Apartments, owns 17 percent of the Market8 project, while the Mohegan Tribal Gaming Authority, which would run the casino operations, owns 16 percent. The Mohegans also operate a casino and horse racing track in Pocono Downs.

Market8 promotes itself as a "cross-cultural group of Philadelphians." A group of seven well-connected locals, including attorneys Bernard Smalley Sr. and Thomas Leonard, businessman Willie Johnson, construction-firm owner Cheryl McKissack and political consultant Bill Miller, own 0.7 percent of the project.

Casino Revolution

The bidder: Produce magnate Joseph Procacci wants to turn part of his South Philly warehouse empire into a casino, at Front Street and Pattison Avenue.

The "tomato king" is majority owner of PHL Local Gaming, which is applying to build Casino Revolution with 2,400 slots, 105 table games and a 250-room hotel. Dr. Walter P. Lomax Jr., chairman of the Bucks County-based Lomax Cos., owns 9 percent of the venture.

The proposed site sits next to the intersection of I-76 and I-95, which PHL believes will maximize visibility from the highways and minimize impact on neighborhoods, given the area's sparse residential population.

Procacci, whose company distributes one out of every five tomatoes in America, is well-known in the city but rarely plays politics.

The backers: The Whitman Council, a neighborhood group in the southeast corner of the city that sits near the sites of the three South Philly proposals, has endorsed Casino Revolution.

Whitman used to be headed by City Councilman Mark Squilla, who has so far kept his powder dry regarding the six applicants.

The connected: Procacci acquired the assistance of Victor Stabile, a former deputy attorney general and the Republican nominee for Superior Court, and lawyer John O'Riordan, whose father served Mayor Frank Rizzo and City Council President James Tate, to advance his bid.

Promoting the project is A. Bruce Crawley, a well-connected PR pro, former John Street ally and ex-chairman of the Philadelphia African-American Chamber of Commerce. Crawley, whose company is Millenium3Management, sits on the Philadelphia Convention and Visitors Bureau board.

PHL plans to use the foundations of existing buildings at Procacci's produce-distribution plant and says it will be able to open faster than any other applicant because it won't be building from the ground up.

Stadium District Live! Hotel and Casino

The bidder: The Maryland-based Cordish Cos., which developed Baltimore's Inner Harbor, has a vision to turn South Philly's pro-sports complex into an entertainment mecca, with a casino and hotel next to the three stadiums and Xfinity Live!, another Cordish project.

The proposed Live! Hotel and Casino would be just north of Citizens Bank Park, at the site of the Holiday Inn on Packer Avenue. Cordish wants to build a 240-room hotel with 2,000 slot machines and 125 table games.

The backers: Although Cordish is an out-of-state operation - it has downtown developments across the country, including five casinos - it's partnering with Greenwood Racing, the owners of Bensalem's Parx Casino, which last year produced more tax revenue than any other Pennsylvania casino. The joint venture with Cordish is called Stadium Casino.

The connected: Former state Rep. Dick Hayden, a Democrat who is close to Nutter and chaired his 2007 campaign, is working on their bid.

Hayden was also appointed by then-Gov. Ed Rendell to the Delaware Valley Regional Planning Commission.

The Harrisburg lobbying firm Gmerek Government Relations is also on board. The team includes Richard Gmerek, a well-known lobbyist who cut his teeth as a lawyer for the state Senate Republican caucus; Chris Lammando, who worked for Govs. Tom Ridge and Mark Schweiker; and Zachary Strohm, who has worked for state lawmakers on both sides of the aisle.

Hollywood Casino

The bidder: For PA Gaming Ventures, which is hoping to build a casino at Packer Avenue and 7th Street, the pitch is simple: It's all about the money.

Two-thirds of Hollywood Casino would be owned by a nonprofit, the Philadelphia Casino Benefit Corp., set up to funnel revenue to the Philadelphia School District or the city's pension fund, both of which are desperate for financial assistance.

The rest of the operation would belong to Penn National Gaming, which already hasthe  Hollywood Casino at Penn National Race Course in Grantville and by law cannot own more than a third of another in-state casino.

The backers: The application drew headlines earlier this year when Philly U.S. Rep. Bob Brady became its chief cheerleader.

The local Democratic boss was originally pushing for a city-owned casino. When legal questions arose, the applicants switched to a nonprofit model that would serve as a conduit for sending the city revenue, which could be used for Philly's schools or its pension fund.

The proposed casino, at the site of the Turf Club, is just a couple of blocks west of the stadium complex, and would have 2,050 slot machines and 66 table games.

The connected: Although Brady's support is sure to carry weight, PA Gaming Ventures has brought in a VIP list of lobbyists and consultants anyway: Christopher Lewis, secretary of the commonwealth under Gov. Bob Casey; Dave Dunphy, once a national union operative and former director of the Democratic National Committee's Labor Council; and Ed Hazzouri, a past chairman of the lobbying shop at high-powered Philly law firm Cozen O'Connor who now runs his own firm.

PA Gaming Ventures is hoping its aid for two of Philly's biggest problems will set it apart from the other five applicants. It's unclear whether that message will be heard by the Gaming Control Board, which is comprised of state appointees.


On Twitter: @ChrisBrennanDN

Blog: ph.ly/PhillyClout.com

comments powered by Disqus
|
|
|
|
|