Valley View Downs can't seem to catch a break.
And yet it seems to keep catching on with new investors.
First, the bad news: Just weeks after the developers behind the proposed Lawrence County racetrack casino said they were nearly ready to apply for a casino license with the Pennsylvania Gaming Control Board, casino giant Penn National Gaming has received permission from Ohio gaming officials to open a racetrack in nearby Youngstown, Ohio.
That move, should it come to pass, could cost the long-stalled Valley View Downs racetrack $40 million in annual revenue, according to a 2011 study.
The news out of Ohio came just days in advance of the monthly Pennsylvania Harness Racing Commission meeting, scheduled for Thursday, and amid talks in Harrisburg that American Harness Tracks has found new investors to replace the stable of owners who bought Valley View Downs out of bankruptcy from Indianapolis-based Centaur Inc. 17 months ago.
A group of investors calling themselves American Harness Tracks LLC won the rights to the troubled Valley View Downs project at Centaur's October 2010 bankruptcy auction, paying $5.6 million. Prior to the purchase, the ownership group comprised real estate developers John and Bob Biros, former bar owner Daryl W. Price and Pittsburgh attorney Charles Knoll, son of the late Lt. Gov. Catherine Baker Knoll.
By early 2011, American Harness had reshuffled its ownership, bringing friends and relatives on board: A. William Price (father to Daryl Price), Christine Biros (sister to John Biros), Downtown bar owner Nicholas Geanopulos, and Edson "Ted" Arneault, former chief executive of West Virginia-based MTR Gaming, which operates Presque Isle Downs in Erie.
Shortly after that, Mr. Knoll and Mr. Arneault's roles were reduced, and Chuck Long, New Castle businessman and former golf course owner, was the new chairman of the board and managing partner at American Harness. Ms. Biros remained on board, and a new investor -- Charles Nannicola, of Nannicola Bingo Co. of Youngstown -- was brought into the ownership group, according to a source with knowledge of the operation.
Chicago-based Merit Management -- which bid on the project during the 2010 bankruptcy hearing and was at one time teamed with New Castle businessman Carmen Shick, who wanted to build his own casino in Lawrence County -- also was asked to manage the racetrack and casino. Merit's CEO, Joe Canfora, is a New Castle native.
"A couple of new ones [from New York] came into the group," said state Sen. Elder Vogel, R-New Sewickley, whose district includes Lawrence County. He said he still believes New Castle is the right spot for the track and casino, but that patience is wearing out.
"That's been the frustrating part of this," he said. "They keep bringing new people."
Those "new people" from New York are reportedly Och-Ziff Capital Management Group, a proposed managing partner, which has been trying to round up limited partners and captive investors for the project. At one point, the project had been touted as a $450 million property, a value estimate that has likely declined as the project's financial woes have continued.
Och-Ziff's point man on the Valley View Downs project is Nicholas E. Hecker, who handles many of Och-Ziff's casino and entertainment properties. He could not be reached for comment.
American Harness' new consultant, meanwhile, is Anton Leppler, the retired executive secretary for the state harness racing commission; its attorneys for the last few months have been James A. Doherty III and Kevin Hayes of Scranton.
Those attorneys are now representing American Harness in court -- The Pittsburgh Post-Gazette is currently arguing for the release of additional American Harness Tracks records in Commonwealth Court, after the state's Office of Open Records partially granted, and partially denied, the newspaper's 2011 right-to-know request seeking records from the Pennsylvania Department of Agriculture and its Harness Racing Commission. Last week, that case was continued until June.
The saga will presumably continue this week at the harness racing commission meeting. Asked if American Harness had submitted any change-of-ownership paperwork in advance of the meeting, a commission spokesman wrote, "for the information on [American Harness Tracks], you would have to call AHT."
Efforts to do so have proven difficult, and not just for newspapers. Legislators, horsemen and others in the gaming industry have been trying, largely unsuccessfully, to learn more about the status of the Valley View project, and its ever-changing roster of principals, who, when contacted by phone, cite the confidentially clauses built into their investment agreement.
A spokesman for American Harness, David LaTorre, said "we're not going to discuss ownership or anything related to ownership."
If the owners don't have the financing lined up, the news out of Ohio last week wouldn't seem to be encouraging to investors. The Innovation Group of New Orleans believes that Valley View Downs, to be built east of New Castle, would bring in about $123 million in annual gross revenue -- but only if there's no competition from a racetrack in Youngstown.
With a racetrack in Youngstown, Valley View's take drops to $83 million. Youngstown is about 15 miles from New Castle, while the racetracks would be 20 miles apart.
Mr. LaTorre said on Tuesday that the Valley View project would soldier on.
"We will make an application with the Pennsylvania Gaming Control Board," he said. "Our concern isn't Ohio. We firmly believe our area, our region, is situated nicely for Valley View Downs, and nothing Ohio does is going to change that."
Berks County-based Penn National was given permission last week to move two of its existing Ohio horse-racing operations -- one in Toledo, the other near Columbus -- to locations in the Youngstown area and Dayton. The move to Dayton will position one of the tracks closer to the Indiana and Kentucky borders, while a track in Youngstown -- technically, Austintown, just west of Youngstown -- positions Penn National to compete for gamblers in Pennsylvania.
"Youngstown was a natural market for Valley View, of course," said Paul Girvan, of The Innovation Group.
Penn National is moving the racetracks because the company is also building stand-alone casinos in Columbus and Toledo, and doesn't want its new casinos cannibalizing its existing racetracks. Penn National, which now owns 19 casinos in the U.S. and Canada, is paying Ohio a $150 million fee to move the two tracks.
It's moving the racetracks with the expectation that Ohio's legislature will approve video lottery machines -- kind of like slot machines -- at the state's horse racing tracks.
"This agreement is a significant step toward the development of two new first-class racing and gaming facilities that will create thousands of construction jobs [and] bring the excitement of horse racing [to] two areas of the state that are now underserved with this type of entertainment," said Tim Wilmott, Penn National's CEO, in a statement last week.
Lawrence County Commissioner Dan Vogler noted that Ohio's approval to move the racetracks was merely a first step, conditional on the approval of video lottery terminals, as well as approval from the state's horsemen.
"We're still ahead, if you want to call this a race," Mr. Vogler said. "I think if ours can get up and running first, [that] would put us at a strong competitive advantage," especially given that table games are legal in Pennsylvania, but not -- yet -- in Ohio.
The "race" stretches back a full decade, to 2002, when Centaur's Valley View Downs first applied for a harness racing license, years before slot machines were even legalized in Pennsylvania.
Valley View Downs has held the rights to build Pennsylvania's seventh, and final, racetrack casino in one form or another since 2007, when the two groups vying for the harness license -- Centaur Inc. and Mr. Shick's Ambrosia Enterprises -- compromised and agreed to build the project in Lawrence County, instead of in Beaver County, as Centaur had first preferred.
Since then, though, there's been little progress on the site -- while American Harness has received its racing license from the Pennsylvania Harness Racing Commission, it still needs a gaming license from the Pennsylvania Gaming Control Board before it can open a casino.
It hasn't yet applied for that license, according to a gaming board spokesman.
The gaming board, like the harness racing commission, is due to meet this week.
Bill Toland: email@example.com or 412-263-2625.