Bidders for the Pittsburgh slot machine casino license dropped the gloves at the end of state Gaming Control Board hearings yesterday, clashing over the Penguins' refusal to commit to an alternative arena funding plan and over revenue and traffic projections at a proposed Station Square casino.
Albert Ratner, board co-chairman for Forest City Enterprises, one of the bidders, attacked the Penguins for refusing to commit to Gov. Ed Rendell's "Plan B" proposal for funding an arena, accusing ownership of using the issue "to sell the hockey team at a higher price."
The fireworks came at the end of testimony, when the three applicants for the Pittsburgh license had the chance to offer rebuttals to what was said over two days of hearings.
Mr. Ratner said Forest City stands "100 percent" in favor of Plan B, but only if the Penguins first commit to staying in Pittsburgh "with or without a casino license."
The Penguins are partners in the slots competition with Isle of Capri Casinos Inc., which has pledged $290 million toward an arena. The team has balked at endorsing Mr. Rendell's plan to finance an arena if Isle of Capri doesn't get the casino license.
"All they have to do is say yes," Mr. Ratner said.
If that happens, Forest City, which wants to build a casino at Station Square with Harrah's Entertainment as operator, will take part in Plan B, though Mr. Ratner wouldn't commit to the $7.5 million per year the governor has requested from bidders. He said the firm's contribution would be based on how much the Penguins put in. Mr. Rendell has asked the team to ante up about $4 million a year.
The other bidder, Don Barden, who wants to build a casino on the North Shore near Carnegie Science Center, also said the Penguins should agree to stay "instead of using strong-arm tactics to try to increase the value of the franchise so they can sell it." He has pledged $7.5 million a year under Plan B.
"It's time for them to put up or shut up," Mr. Barden said.
Mr. Ratner also said that if Isle of Capri wins the license because of the arena pledge, it could end up costing the region $100 million a year. He arrived at that figure using the higher revenue projections for the Station Square casino -- forecasts that competitors and others have claimed are inflated.
"That would be the most expensive arena built anywhere in the world," Mr. Ratner said.
Penguins consultant David Morehouse took issue with demands for a commitment. He said the Penguins "have been investing in Pittsburgh for a long time at a high cost," enduring losses, including $8 million this year.
"We're not going to be lectured by a developer from Cleveland about our commitment to Pittsburgh," he said of Mr. Ratner.
Mr. Morehouse maintained Plan B still has holes, including the "conditional" commitment by Forest City and questions about the legality of using revenue from a slots-funded economic development fund to finance part of the cost. The governor's office has said the plan is legal.
"We've seen a lot of promises before. All we're doing is our due diligence to find out what exactly this plan means and we have not had any conclusive answers," Mr. Morehouse said.
Forest City wasn't the only one on the offensive.
Isle of Capri produced Steve Rittvo, president of the Innovation Group, a New Orleans consultant, to poke holes in Forest City revenue estimates. Forest City is projecting casino revenues of $617.7 million a year, higher than either Isle of Capri ($400 million a year) or Mr. Barden's PITG Gaming ($500 million).
Mr. Rittvo, who did estimates for Isle of Capri and the state Senate, said he has "never seen a variation as great" as those in Pittsburgh.
With all three similar projects, "it's not clear to me how one casino developer can generate significantly greater revenues than the others," he said.
Mr. Ratner stood behind the estimate. Based on the projection, gross gaming revenue per adult in Pittsburgh would be $372 a year, lower than that in Kansas City ($412), New Orleans ($467) and St. Louis ($428).
"These are not pie-in-the-sky figures," he said.
Mr. Ratner also sought to counter concerns raised by the Pittsburgh Gaming Task Force and several speakers about the possibility for massive traffic congestion at Station Square because of the casino.
Whatever congestion there is, he said, is largely "event driven" by things like concerts at Station Square and Steelers football games. He said the firm can handle the traffic.
"I can assure you that we know how to take care of customers and how to serve customers and so does Harrah's," he said.
With traffic a concern, Mr. Barden, who believes his North Shore site has the best access, offered to fund an independent traffic study of the three locations, to be done by someone chosen by the gaming board.
"Let the chips fall where they may. I'm willing to live with it," he said.
The bidders' remarks came after the board heard from 19 community groups and 34 people. Many spoke in favor of the Isle of Capri proposal, although Forest City also attracted support. Others did not endorse specific proposals, but spoke in favor of a new arena or raised other issues.
Kevin Joyce of the western chapter of the Pennsylvania Restaurant Association and operator of The Carlton, Downtown, made no endorsement but said a new arena and keeping the Penguins are critical to his industry.
He also urged a limit on the amount of space devoted to restaurants in the slots parlor, saying casinos in other cities have ruined local eateries' business.
James Malloy, president of Fraternal Order of Police Fort Pitt Lodge 1, urged the board to return $5 million of the $50 million casino licensing fee to the city to hire more officers.
One group that has yet to endorse a plan is the Hill Community Development Corp. The group's chairwoman, Marimba Milliones, expressed concern about the process "being hijacked" by a public relations campaign.
She said the group would like to see greater investment in the Hill District above Crawford Square. Hill redevelopment plans advanced by both Isle of Capri and Mr. Barden focus below Crawford Square.
It also wants to see more than $1 million a year invested in the Hill and a commitment that at least 30 percent of casino workers be minorities.
