Casino's license illegal, suit says

Seven state lawmakers whose legislative districts abut the Delaware River in Philadelphia yesterday asked the Pennsylvania Supreme Court to halt all construction of the proposed SugarHouse Casino, contending its license to build on submerged land beyond the river's edge is illegal.

The lawsuit, which names the city as defendant, attacks the Nov. 27, 2007, decision by the city Commerce Department granting riparian rights for underwater development to the casino builder, HSP Gaming, a limited partnership that is incorporated in Delaware.

In February, after a lengthy public debate about the pros and cons of locating slots parlors in Philadelphia, the Pennsylvania Gaming Commission issued HSP a license to build on 22 acres along Delaware Avenue.

Roughly half that acreage is dry land along the riverbank; the other half is submerged and extends eastward from the river's edge toward New Jersey. Plans call for the casino-entertainment complex to be built on Delaware Avenue between Ellen and Shackamaxon Streets.

Yesterday's lawsuit, filed by State Sens. Vincent Fumo and Michael Stack and Reps. Michael O'Brien, William Keller, John Taylor, Michael McGeehan and Robert Donatucci, contends that the water-rights portion of HSP's application was granted improperly.

At a news conference announcing the suit, Catherine Recker, attorney for the lawmakers, said the Commerce Department lacked legal standing to make the decision and erred when it relied on a 1907 state law that was superseded by another in 1978.

The 1978 law gives Philadelphia the power to make decisions about repairs to piers and wharves and other routine maintenance issues, but does not give the city the authority to make development decisions about proposed projects on submerged land, Recker said.

According to the suit, submerged land on navigable waters in Pennsylvania is owned by the state and only the legislature has the authority to sell or lease it.

Under the 99-year lease arrangement approved by the Commerce Department and challenged by the suit, SugarHouse would pay the city $282,270 a year for the use of the riverbed land.

The lawmakers contend that decision usurps their power.

"This is about sovereignty" and the power of the legislature to grant riparian rights, the rights to the river's bottom, Keller said.

"We can't stand by and let the city make an end run" around that power, said Keller, who joined Taylor and O'Brien for the announcement in Recker's Center City office.

Proponents of slots parlors in Philadelphia say they can be an important source of revenue that will lower taxes and contribute to worthy causes, including aid to public education.

Some opponents say the parlors are a vice that will lure players into gambling addictions and financial problems. Other opponents - especially residents of the river wards that are most directly affected, including Fishtown - say the parlors will clog their neighborhoods with traffic.

While saying that the motive for the lawsuit is "not anti-gaming" but rather to defend the legislature's legitimate prerogatives, O'Brien acknowledged in his answer to a reporter's question that the Supreme Court challenge could lead to a reconsideration of the efficacy of the SugarHouse project after Mayor-elect Michael Nutter takes office next month.

"Whether you want to put up a hot dog stand or relocate the Vatican, there is a process" that must be adhered to, O'Brien said.

Dan Fee, a SugarHouse spokesman, noted that the lawsuit does not name SugarHouse as a defendant but said it was aimed squarely at the company.

Regarding jurisdiction, he said he thinks the city has it.

"Our application never said the city had the unilateral ability to grant these rights. It said that the state had the authority but it was granted to the city," he said.

He contended that the lawsuit would be counterproductive and added his own interpretation of its impact.

"It's a shame that legislators from Philadelphia would be trying to take away from Philadelphia the ability to develop the direction of its own waterfront," he said.

Stephanie Naidoff, Commerce Department director, declined to comment in detail about the suit because she had not seen it.

"Since it's a matter in litigation, I probably shouldn't comment," she said. "I can tell you that as a lawyer, I have the utmost respect for our courts, and I expect that ultimately the issues will be resolved in the best interests of the people of Pennsylvania."