Ferlo, Orie ask gaming board to reject bailout, reopen bidding
July 15, 2008 4:00 AM
The Majestic Star casino and its parking garage have taken shape along the Ohio River, but no construction work was going on yesterday because of Don Barden's inability to pay his contractors.
By Tom Barnes and Bill Toland Pittsburgh Post Gazette
HARRISBURG -- Two Pittsburgh-area legislators are urging state gaming regulators to revoke Don Barden's slots license and award a new Pittsburgh casino license based on "a competitive process that will include new applicants," who would complete what's already been started on the North Shore.
State Sens. Jane Orie, R-McCandless, and Jim Ferlo, D-Highland Park, wrote yesterday to Gaming Control Board Chairwoman Mary D. Colins, urging the agency not to rush into approving a refinancing and reorganization plan being sought by Mr. Barden.
The senators said they want "to prevent a blatant attempt to force this board into hastily approving a financial bailout without any public scrutiny or input."
Mr. Barden was awarded the slots license by the board in December 2006, but due to financial problems, he's now ceding control of his Majestic Star project to an investors' group from Chicago, which includes billionaire Neil Bluhm.
The two parties were in negotiations yesterday to finalize the bailout deal. Once Mr. Barden's Majestic Star and Mr. Bluhm's Walton Street Capital arrive at an agreement, the gaming board would have to ratify it, and then the two parties could proceed with closing on the financing.
Ms. Orie and Mr. Ferlo want any such meetings delayed and called the potential transfer of the slots license a "last-minute bait and switch" and "unacceptable."
The two senators said the Barden casino project "is no longer financially viable. Accordingly, the proper response of this board is to revoke the license issued to [Mr. Barden]" and then "reopen the license to a competitive process that will include new applicants."
Later in the day, Mr. Ferlo and Ms. Orie elaborated on the letter, saying that while they'd like to see the process opened to any and all applicants -- including Mr. Bluhm -- they would expect that any new bidders would incorporate the existing North Shore casino shell into their plans, rather than building in a new spot and leaving a heap of steel and concrete next to Carnegie Science Center.
Mr. Barden defeated two other applicants, Isle of Capri and Forest City Enterprises, when he won the slots license in December 2006. An Isle of Capri spokesman couldn't be reached yesterday; Forest City had no comment when asked if the company would even be interested in submitting a new bid.
Gaming board spokesman Doug Harbach was likewise reluctant to comment. He said the board "has the power to revoke, suspend or add further conditions to" a license, but said the Barden refinancing situation is under study and he couldn't comment further.
The board has already suspended one of the slots licenses it awarded, to Poconos businessman Louis DeNaples. His Mount Airy casino is still operating but remains under the control of an outside trustee until perjury charges against Mr. DeNaples are resolved.
Five House Republicans, including Mike Turzai of Bradford Woods, wrote to Ms. Colins yesterday, saying the board should "consider whether the time has come to put the Pittsburgh [casino] license in a trusteeship" also.
Doing so, the Republicans said, could make it possible to continue construction of the casino while protecting all parties, including state taxpayers and Mr. Barden himself.
Also yesterday, Ms. Orie said she wants copies of "all contracts and documentation" regarding the Majestic Star casino that are in possession of the state or the Sports & Exhibition Authority.
Construction of the casino stopped in late June because Mr. Barden hadn't paid contractors in two months. He is hoping to get the work restarted this month after Mr. Bluhm and others provide new capital.
Mr. Barden has been hoping to have the $780 million casino on Pittsburgh's North Shore open by summer 2009. But if the board revokes the license and restarts the licensing process, there almost certainly would be a delay in opening the Pittsburgh slots parlor.