Barden's timetable for casino is raising doubts
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When Kevin Daly was told of Don Barden's aggressive plan to open a casino on the North Shore by March 2008, his first response was unprintable in this or any family paper. His second response was this: "Since he hasn't turned a shovel yet, I would be shocked if he got done."Darrell Sapp, Post-Gazette
CEO Don Barden, left, and Smokey Robinson sit during testimony in front of the Pennsylvania Gaming Control Board at the Omni William Penn Hotel on April 18.
Click photo for larger image.
Mr. Daly is a professional construction scheduler, the head man for Benchmark Associates, a St. Louis-area consulting firm. He knows what's possible and what's not, and he has scheduled the construction of casinos in St. Louis and Indiana, including the Ameristar Casino St. Charles and the Harrah's St. Louis casino. Right now, he's doing scheduling for a Pinnacle Entertainment casino.
Mr. Barden, in November, announced that he was scrapping plans to use a riverboat as a temporary casino, and would instead accelerate the construction of the permanent Majestic Star. The Pennsylvania Gaming Control Board was skeptical, wondering how he could build in less than 14 months what others thought would take up to two years.
His answer: double shifts, six days a week.
Mr. Barden's spokesman, Bob Oltmanns, is aware of naysayers who are predicting that the project can't be done on the 14-month timetable. But he said Turner Construction, the master contractor retained by PITG, has built a schedule that accounts for every screw, bolt and nail.
Mr. Barden's PITG Gaming won the right to build a casino in Pittsburgh last week, beating out better-known companies Isle of Capri Casinos and Harrah's Entertainment, which was partnering with developer Forest City Enterprises.
Prior to Wednesday's licensing meeting, Mr. Barden's competitors questioned the credibility of his timetable, especially considering that Mr. Barden has no experience with a casino construction project of this scale -- three of his casinos, the Fitzgerald brand, were purchased after the construction was already completed. His other two casinos are riverboats in Gary, Ind., with a land-based facility attached nearby.
The Pittsburgh casino is projected to be the $450 million crown jewel of his chain -- at 400,000 square feet, it has floor space equivalent to seven football fields, or more than nine acres. It's comparable in scope and cost to Pinnacle's Lumiere Place casino complex being built in St. Louis, a $430 million landmark not far from the Gateway Arch.
That project, being scheduled by Mr. Daly, will take two years. Mr. Barden's March 2008 target date seems especially rushed, when you consider that, by his own guess, he probably won't break ground for 60 or 90 days, giving him time to secure necessary permits and to acquire the land on which he plans to build the casino. (The property, near the West End Bridge, is owned by MAXT Corp. and the John Connelly family, which also owns the Gateway Clipper fleet.)
If he has to wait 90 days, that means ground won't be broken until the end of March -- meaning Mr. Barden's crews would have less than 12 months to complete the project. His suggestion that doubling up on construction crews will save a full year over the typical two-year schedule is also hard for Mr. Daly to believe. The Pinnacle project, for example, is also utilizing double shifts, yet will still take two years.
Casinos can take longer than normal to build for a number of reasons.
First is that they often have elaborate, imaginative architecture, inside and out. One designer told the Pittsburgh Post-Gazette that "a casino is one of the most complicated buildings you'll find, other than a hospital."
Second is that, since Mr. Barden was competing with two other entities for the casino, it's doubtful that he got much of a head start on design, since there's not much point in spending $10 million, give or take, to design a casino until you're sure that you're able to build it.
That means little has been designed up to this point, unless Mr. Barden was tipped off as to the gaming board's intentions well in advance, which was not the case, several people with knowledge of the proceedings said. Besides, because of the unique elements of each casino, casinos are often designed on the fly, which can cause delays.
"Every casino I've built, the design sort of evolves as the construction grows," Mr. Daly said. "These owners come up with these aggressive turnover dates and opening dates -- the designer never gets ahead of the construction very much."
Third is that a casino, unlike a more routine job, requires lots more security doodads -- cameras, wiring, surveillance. The items are patched into the walls as the crews move along. It's not a major hang-up, but can add extra weeks, or even a month or so, to a casino construction project.
Then there are the holdups that are common to casinos and any other major project. Mr. Barden's crews will have to deal with snow and rain, for example, both of which can be found in abundance in Pittsburgh. Delays can also come from permitting snafus, unsatisfied inspectors, lawsuits, zoning -- even something as simple as a foundation excavation that unearths human bones, as happened at Point State Park just this month. The odd discovery didn't delay construction, but it easily could have.
His ability to meet his own timetable also depends on how much of his $450 million estimate is actually spent on construction. The more money dedicated to concrete, steel and glass, the less likely that he'll meet his deadline. Several construction experts polled by the Post-Gazette said it was likely that between $250 million and $300 million would be spent on acquiring and installing construction and fixtures -- the rest goes to engineering, design fees, signs and, of course, the slots and stools, which will cost around $40 million (a slot machine can cost $10,000).
The accelerated timetable will mean millions in extra labor costs, exceeding the casino's tentative budget, something Mr. Barden has acknowledged, though he didn't seem overly concerned about it. He said that extra money can be recouped by opening early, getting the slots rolling sooner than expected.
Another point unique to Pennsylvania's casinos -- all of the casino construction vendors must first be licensed by the Pennsylvania Gaming Control Board before they can start building. The casino winners in Pittsburgh, Philadelphia, Bethlehem and the Poconos might have to wait on licensing before construction can start. A delay of just a few weeks on just one sub-contractor could throw off such an aggressive timetable.
Add it all up, and what do you get? "Fourteen months is extremely aggressive for a ground-up facility housing 3,000 slots," said one source, head of construction for a manor casino company. He didn't want his name or his company to be identified, because he does business in Pennsylvania and has to work with the gaming board.
"Given these factors, I doubt he will be able to deliver a casino in 14 months," he wrote.
Randy Gould, a director for the resort and hospitality division at Cuningham Group Architecture, agreed. Calling from the firm's Minneapolis branch, Mr. Gould said that Cuningham is presently designing two casinos -- one is in an urban area, and the other is a Harrah's project in North Carolina's Great Smoky Mountains.
Each project has its own distinct challenges -- the Harrah's project is more remote, meaning it has less access to roadways, making delivery to the site more difficult -- but neither is a particularly glamorous casino.
At $450 million each, both projects are comparable, cost-wise, to the proposed Majestic Star.
"It's not budget, but it's middle of the road," Mr. Gould said. "None of them can be considered intensive. [And] none of them can be produced in that timeline," referring to Mr. Barden's 12-month construction schedule.
But forget about construction, Mr. Gould said. Let's just talk about supplies. You can't just snap your fingers and have steel arrive on the North Shore.
"You have to get in line for that. Just to get the steel ordered and put through, you're looking at 16 weeks," four months or more, he said. Like Mr. Daly, Mr. Gould said Mr. Barden's intention to "fast-track" the Majestic Star with double shifts was nothing revelatory. "We do a lot of projects fast-track," he said, saying it's common in the industry.
"I hate to say it can't be done" on the time and on budget. "In a perfect world, if the sun, moon and stars align, [if] money's no object ... but I think it's a Herculean task to even make a go of it."
More realistic, Mr. Gould said, might be a grand opening in March 2008, with a completed gaming floor but little else. The atrium, parking garage, concert hall and some of the restaurants might be incomplete by opening day. But Mr. Oltmanns, the Barden spokesman, said that isn't his boss's intention.
"There are all kind of analysts and experts calling this undoable," Mr. Oltmanns said. "In my experience, you don't tell Don Barden he can't do something."
First Published December 25, 2006 12:00 am