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Posted At : July 1, 2008 10:20 AM | Posted By : D McKee
Related Categories:
Riviera,Regulation,Pennsylvania,Harrah's,Tribal
That "juice job" that is Don Barden's Majestic Star casino project in Pittsburgh still has a pulse, even though contractors walked off the job yesterday as threatened. Chicago real estate developer Neil Bluhm is willing to chip in $120 million. Since Bluhm is the top dog on the SugarHouse casino project in Philadelphia, he can only be a minority investor in Majestic Star -- but what a minority! For $120 million, Bluhm gets 33% of a $780 million casino ... no small index of Barden's desperation.
Bluhm also hip-checks Apollo Management, co-owner of Harrah's Entertainment. Apollo had contemplated loaning $150 million which, presumably, could have been rolled into an equity stake. (As with Bluhm, Apollo is precluded from majority ownership in a second Pennsylvania casino.) However, Barden is still $30 million shy of his target number -- and no buyers have emerged for the Fitzgeralds casino in downtown Vegas, which represents the equity Barden was obligated to commit to Majestic Star.
This whole thing looks more and more like a colossal boondoggle by the day (Majestic Star's proximity to Heinz Field and PNC Park is a traffic nightmare in waiting, and Barden's plan scored a 274 out of a possible 600 from the Pittsburgh Department of City Planning). However, various local- and state-level commissars for optimism -- including the state's gaming commission -- are so nakedly desperate for additional tax revenue that they're willing to overlook the elephant in the middle of the room.
If Bluhm's name sounds familiar, he was part of a consortium that included Barry Sternlicht and which made several unsuccessful runs at Riviera Holdings. (Considering that RIV hit a 52-week low earlier today, perhaps they'd like to try again.) While he and Barden iron out the details, Majestic Star will sit half-finished and idle for as much as a fortnight. There's even a Web cam where you can view the work that is not taking place.
Displaying a rich sense of humor, Barden's spokesman "said the suspension of work should not affect the timetable for the North Shore casino's completion, scheduled for May 2009." What a card!
Elsewhere in Pennsylvania, the state's higglety-pigglety rush to embrace casino gambling continues to unravel (much to the relief of Atlantic City, I'm sure). Even though the state Supreme Court has said he can't relocate Philadelphia's two slot parlors, Mayor David Nutter wants to appoint a commission to study doing that very thing. He could also throw so many bureaucratic obstacles in the paths of SugarHouse and Foxwoods that they either give in and move voluntarily -- or perhaps they take their balls and go home. If Nutter's objections were merely aesthetic, that might be negotiable, but they appear to run much deeper than that.
Just for fun, check out this botched implosion in Florida. Las Vegas may not be tops in every desirable category, but we sure do know how to blow up buildings.
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