Bidders work hard to prove diversity
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Steelers great Franco Harris is one of three African American investors in the Forest City Enterprises bid for the Pittsburgh casino. Former Allegheny County Council President James Simms, another African American, has emerged as a top spokesman for the Isle of Capri proposal.
And Detroit businessman Don Barden, the largest African American casino owner in the country, will head up PITG Gaming LLC, the third company competing for the slot machine license.
Leaving little to chance, all three bidders are putting diversity at the forefront of their campaigns. And for good reason.
Under state law, bidders are required to submit diversity plans as part of their applications -- a first in the country, according to the American Gaming Association, the casino industry trade organization.
An applicant's "good faith plan" to recruit and hire minorities and women and to buy goods and services from minority- and female-operated businesses are among 11 factors to be weighed by the state gambling board in awarding licenses. And no license can be awarded or renewed unless the operator has developed and implemented a plan or agreed to do so.
"Certainly, the Pennsylvania Gaming Control Board has made it clear that diversity is an important element of any license application," said Joseph Weinert, vice president of Spectrum Gaming Group, an industry consultant. "It seems to me that all of the applicants have received this message."
"Diversity's important," Gov. Ed Rendell added.
But some don't believe the language goes far enough.
State Rep. Thaddeus Kirkland, D-Delaware County and chairman of the state legislative black caucus, calls the law a "work in progress" and "a lot of cheek and gum."
"What I don't like about it is it does not have enough teeth," he said.
Mr. Kirkland said the black caucus had lobbied for tougher requirements, including possible set-asides in terms of employment and contracting, but in the end wasn't able to get them.
Others said there were good reasons the law was written as it is. Setting quotas could have opened the state to charges of reverse discrimination, said Russell Lichtenstein, a lawyer at Atlantic City-based Cooper Levenson. He said New Jersey altered its diversity goals several years ago to remove state-mandated numerical requirements in response to lawsuits alleging reverse discrimination.
"It begins to cross the line when a diversity plan becomes a numbers-driven process," he said. "Pennsylvania regulators seem to have gotten that message."
In Pittsburgh, competitors are building alliances in an effort to meet the spirit of the law.
Forest City plans to work with the Manchester Bidwell Corp. to train minorities and others for jobs at the proposed Station Square casino, to be operated by Harrah's Entertainment. The agency's Bidwell Training Center would prepare hospitality and food service workers through its culinary program.
Manchester Bidwell hopes to work with the Community College of Allegheny County and other trade and technical schools to equip workers for a variety of casino jobs, in security, finances, administration and other areas.
Abe Naparstek, Forest City director of development, said Harrah's has a policy of donating 1 percent of its profits to the community and has its own programs to help recruit minority- and women-owned businesses get contracts.
Jesse Fife Jr., executive vice president and chief operating officer of Manchester Bidwell, said his organization became involved with Forest City about a dozen years ago when there was talk of riverboat gambling being legalized. He said the goal was to provide not only jobs to minorities, but also to as many city and county residents as possible.
"We want to make this an all-out effort to get as many of the 2,000 [full-time] jobs projected [by Forest City] filled by city of Pittsburgh and Allegheny County residents. That's our goal," he said.
Isle of Capri plans to establish a business development center in Pittsburgh as part of its effort to find minority and female employees and contractors.
The development center, included in the diversity plan submitted to the state, would provide job training, technical assistance and, possibly, financial help to aid in the recruitment of workers and contractors.
There also are plans for mentor programs for minority- and female-owned contractors and a business incubator program. Much of the effort would be directed toward the Hill District, which sits at the edge of Isle of Capri's proposed $1 development.
While a study by an Isle of Capri consultant has estimated that 41 full-time equivalents of 4,100 projected full- and part-time casino jobs would go to the Hill District people, Mr. Simms said the number would far exceed that.
"That number in no way at all reflects where we intend to be," he said. "Those numbers don't figure into our thinking at all. We're talking about job opportunities that are going to impact the community in significant ways."
Mr. Barden is planning a two- to four-month job training program for workers, should he win the license. But in terms of diversity, Mr. Barden might have an advantage over the others simply because he will be the operator of the casino.
"I clearly think it's a factor," Mr. Naparstek said.
But, he added, he believes the license ultimately will be awarded on the basis of which proposal generates the most tax relief and provides the most stable operator -- two areas, not coincidentally, where Forest City claims to have an advantage over the others.
In the battle for the Pittsburgh license, diversity is proving to be another area of contention.
Mr. Naparstek pointed out that Forest City's list of investors includes three African Americans: Mr. Harris, Reed Smith lawyer Glenn Mahone and Yvonne Cook, who was a top assistant to former Allegheny County Chief Executive Jim Roddey, and that Isle of Capri has none.
"We believe in the idea of having minority owners and we believe that's the spirit of the legislation," he said.
But the Isle of Capri's Mr. Simms had a different take.
"I think we have the advantage by involving the larger community and having a much more significant impact on the city as a whole. So I think the advantage goes to Isle of Capri," he said.
Mr. Weinert said that, overall, the gambling industry is "among the most diverse employers anywhere," and a 2003 study done by PricewaterhouseCoopers for the American Gaming Association seems to back him up.
It found the 138 casinos that participated employed a higher percentage of minorities than other businesses in their states and a higher percentage of minorities than the overall U.S. work force. At the time, 47.1 percent of casino employees were minorities.
But, in some cases, casinos have not been as successful in meeting goals in contracting with minority- and female-owned firms. In Kansas City last year, for example, the percentage of goods and services purchased from such businesses by the city's two casinos fell for the third straight year. That was attributed in part to a lack of minority vendors for some of the things casinos buy, including slot machines.
Currently, 46 percent of Isle of Capri employees are minorities. Percentages weren't available for Harrah's or Mr. Barden's operations.
First Published April 9, 2006 12:00 am