
With an Oct. 1 deadline looming, two state senators pressed the state gaming control board yesterday to force the Rivers Casino to make a required $7.5 million annual payment to help fund the city's new arena.
In a letter to Greg Fajt, gaming board chairman, Democratic senators Sean Logan, of Monroeville, and Wayne Fontana, of Brookline, called on the agency to "act quickly to provide closure to this situation."
"We are hoping that the gaming board will protect the taxpayers' interest in this matter and not that of Rivers," they wrote.
Both senators are members of the city-Allegheny County Sports & Exhibition Authority board. The SEA is in negotiations with the casino over the timing of the payments, to be made annually over 30 years. The SEA has said the payments are to start this fall, with the first due Oct. 1. But casino officials have said they were told last year during negotiations to rescue the stalled project that the payments wouldn't start until at least 2010.
Rivers officials have said they're willing to move up the date if they get commitments that the annual payment would be reduced if the state raises the 55 percent tax rate on slot machines or if the state grants a license for a second casino in the Pittsburgh market.
In their letter, the two senators said the SEA doesn't have the power to agree to such conditions.
They said a contract related to the arena bonds clearly shows that the payments are to start Oct. 1. They argued the SEA already has "gone above and beyond" by agreeing to allow the casino to make two payments a year to fund its $7.5 million share instead of one.
If the Rivers doesn't come up with the money, taxpayers would be on the hook because the state has guaranteed the arena bond payments, Mr. Logan said. The casino, he said, should be shut down if it fails to live up to its commitment.
"People need to understand this is a significant amount of money that taxpayers will have to come up with if the Rivers Casino doesn't meet its obligation. I'm not going to sit idly by and let the taxpayers get hosed here," he said.
In a statement, Rivers officials said they were "working in good faith to get an agreement as soon as we can."
"We have always honored the commitments that have been made. There are still a few outstanding issues we've been trying to resolve in good faith, and we hope and expect to come to an agreement," the statement said.
Gaming board spokesman Doug Harbach said the agency had received the senators' letter "but we are unable to comment further since this could be a matter that may be brought before the board by enforcement counsel."
During a hearing on table games earlier this week, Cyrus Pitre, chief counsel for the gaming board's office of enforcement counsel, said he was prepared to "draw a line in the sand" over the payment issue at some point but would not say when.
The gaming board held a hearing in July over the dispute and ordered negotiations.
Mr. Logan has threatened to introduce language that would block the North Shore casino from receiving a license for table games, if they are legalized in Pennsylvania, until it makes the arena payment.
Former casino owner Don Barden agreed to contribute $7.5 million a year toward the arena construction as part of his bid for the Pittsburgh slots license. Holdings Acquisition Co. LP, the current owner, agreed to keep that commitment as part of its takeover of the casino last year.
The payment is one of the funding streams for the $321 million arena under the deal reached two years ago between state and local leaders and the Penguins to keep the team in Pittsburgh.