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Rendell supports casino financing
Saturday, May 31, 2008

Don Barden's latest deal to finance his North Shore casino got a vote of confidence yesterday from Gov. Ed Rendell.

Meeting with reporters after the Point State Park reopening, Mr. Rendell said the $780 million financing package appears to be a "strong one."

Mr. Barden announced nearly two weeks ago that he had completed the financing by securing a $150 million commitment from Apollo Strategic Value Fund LP and a group of other lenders.

Apollo is affiliated with Apollo Management, one of the two private equity firms that jointly purchased gambling powerhouse Harrah's Entertainment for $17.1 billion.

Mr. Rendell likes what he has heard about the deal.

"The holding company that owns Harrah's is one of the strongest in the United States of America, and Harrah's is a great, great operator and great institution. So I think that is reason for optimism here," he said.

Harrah's had teamed with Forest City Enterprises, the Station Square owner, to bid for the Pittsburgh slots license, but ended up losing out to Mr. Barden and his company, PITG Gaming LLC.

However, the involvement of Apollo in Mr. Barden's financing has fueled speculation that Harrah's could have some role in the Pittsburgh casino. Mr. Rendell said he hadn't heard anything to that effect, but "if they do, that's nothing but a plus."

"I mean, I'm a believer in Mr. Barden. I know the places he's operated in other parts of the country and they're good, high-class places. If he can combine with Harrah's, it would be great for people of the region."

Mr. Barden still must present the financing plan to the state Gaming Control Board for review and approval. He asked for and received a delay earlier this month, saying he needed more time to complete the deal. Spokesman Bob Oltmanns said yesterday Mr. Barden now hopes to present the package in June after he has closed on the financing.

"It's always a plus to have the support of Gov. Rendell," Mr. Oltmanns said after the governor's comments.

State Sen. Jim Ferlo has raised concerns about the time it has taken Mr. Barden to secure his financing. He told KDKA-TV that if Mr. Barden doesn't have the deal in place by the end of June, the gaming board should consider transferring the license to someone else.

Asked about Mr. Ferlo's comments, Mr. Rendell said, "I think there's a point where that happens. I don't think we've reached it yet."

Despite the delays in obtaining permanent financing, construction of the casino has continued unabated on the North Shore between Carnegie Science Center and the West End Bridge. It is on pace to be completed by next May.

Mr. Barden secured a $200 million bridge loan to start the work. That loan became due May 19. As a result, Mr. Barden has asked Credit Suisse, the lender, for additional time to complete the permanent financing so the bridge loan can be paid in full.



First published on May 31, 2008 at 12:00 am
Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.
Read the PG's Casino Journal by Bill Toland
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