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Political pull didn't carry the day for Forest City
Thursday, December 21, 2006

Maybe the "fix" wasn't in, after all.

Fourteen months ago, former Pittsburgh Mayor Tom Murphy worried openly that Station Square owner Forest City Enterprises had a political advantage over the other slot-casino bidders and that a decision in its favor had already been made behind the scenes. "It's no secret,'' he said on Oct. 27, 2005, "that supposedly, the fix is in."

But Cleveland-based Forest City, a presumed early favorite for the license awarded yesterday to Detroit businessman Don Barden, faded late in the game despite its partnership with casino powerhouse Harrah's Entertainment, its track record as a builder of several notable Pittsburgh-area real estate projects and a local partnership team that included two well-connected political insiders and fund-raisers: insurance broker William Lieberman and venture capitalist Charles Zappala.

"At the end of the day," Mr. Murphy said in an interview yesterday, "I think quality overcame politics."

Forest City Executive Vice President Brian Ratner is still "taken aback and appalled" at the suggestion that Forest City tried to rig the casino selection in its favor. "We do things above board to get things done," he said. And "we were pretty comfortable with what we put forward. I guess it wasn't meant to be."

There were several theories yesterday why Forest City did not get the nod.

Maybe the gaming board had issues with the amount of traffic a Station Square casino would generate on the South Side. Maybe there were doubts about Forest City's aggressive revenue projections ($617 million a year). Maybe the gaming board did not like the fact that Forest City promised the fewest number of slots, 4,000 to the others' 5,000.

But Mr. Ratner said he would not have altered the Forest City proposal in any "major" way. "I have no way of knowing" why the casino board went with Mr. Barden over Forest City, he added.

Most observers agree that Forest City started the competition for the slots license as the best-connected group of the three.

First, Forest City was already a big campaign contributor to Gov. Ed Rendell. And then Forest City Enterprises co-chairman Albert Ratner, during a meeting with Mr. Murphy while he was still in office, told the mayor it was his understanding that he had to have Mr. Lieberman and Mr. Zappala as partners to win the license, according to several people familiar with the meeting, which took place in the mayor's office Downtown. The comment contributed to the mayor's belief about the "fix" being "in."

Asked about that meeting with the Forest City co-chairman, Mr. Murphy declined comment.

Al Ratner, reached yesterday by phone, said, "I don't comment on those issues. I don't comment on any of that." His son, Brian Ratner, said he does not remember if such a meeting happened or such a message was expressed by his father. "I never had any conversations with anyone along those lines," he said.

Mr. Lieberman and Mr. Zappala each received 9 percent stakes in the Forest City-Harrah's project, while former Steelers running back Franco Harris received 4 percent, Reed Smith attorney and Allegheny County Airport Authority Chair Glenn Mahone received 2 percent and Highmark Foundation President Yvonne Cook received 1 percent. Harrah's loaned much of the money put up by each local investor.

"They certainly did have the best political connections," said former Allegheny County Executive James Roddey.

A year ago, "everybody, I think, shared that perception that a lot of decisions in Pennsylvania are made on politics rather than merit," said former Pittsburgh City Council member Sala Udin, now president of the Coro Center for Civic Leadership. "I think people assumed the gaming board would not be exempt from that custom, and they were wrong."

Mr. Barden, he said, "came out on top on merit."

Northfield, N.J.-based gaming consultant Joseph Weinert said that Mr. Barden "had a compelling proposal regardless of who was perceived as being the favorite or who played their cards right politically. ... I am not sure the gaming board got caught up in who was the reported favorite or who had which endorsement."

Brian Ratner did not deny yesterday that Forest City sought local partners of influence and standing. "That is the nature of the process," he said. "We do look for folks on a local basis who make a difference when trying to get things done there."

But the other bidders did the same, and even Mr. Barden enlisted the parents of Steelers' running back Jerome Bettis as investors and invited incoming Pennsylvania House Speaker William DeWeese to his private box during last year's Super Bowl in Detroit.

"Everyone had relationships with people," Mr. Ratner said. "At the end of the day, you'd like to believe it was decided based on the best proposals. We clearly feel like we had the best proposal."

First published on December 21, 2006 at 12:00 am
Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.
Read the PG's Casino Journal by Bill Toland
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