At casino hearing, angry Phila. protests

HARRISBURG - The roiling controversy over the arrival of slot machines in Philadelphia exploded yesterday at an emotional hearing before the Pennsylvania Gaming Control Board to review the status of the city's two casino projects.

At a two-hour meeting between regulators and casino operators, about 70 anticasino protesters fought to be heard, often hissing, hurling insults, and interrupting.

The seven board members were silent as representatives of the Foxwoods and SugarHouse casinos delivered scripted remarks. Only after the executives left the auditorium of the State Museum of Pennsylvania were protesters allowed to address the board.

The casinos and the regulators alike are "afraid to engage the general public," said the Rev. Robin Hynicka, pastor of Arch Street United Methodist Church in Center City.

Doug Harbach, a board spokesman, said the members decided to wait for future hearings to question the casino officials.

Both SugarHouse and Foxwoods are behind schedule. Officials of each assured regulators that they had the money, as well as a new commitment from Mayor Nutter, to move forward with their projects.

Brian Ford, chief executive of one of the investor groups behind Foxwoods, Washington Philadelphia Investors, told regulators of the project's new preferred site: the former Strawbridge & Clothier store at Eighth and Market Streets.

It is the third potential site for Foxwoods. In 2006, Foxwoods won a license to open a slots parlor on Columbus Boulevard in South Philadelphia. But under pressure from Nutter to move off the waterfront, Foxwoods said in September it would consider a site at the Gallery at Market East.

The group now has "an understanding" with the owners of the Strawbridge building to move there, Ford said.

Ford testified, too, that the project had financing to develop the site.

When it won a license two years ago, Foxwoods intended to borrow most of the money for the project. But with the credit crunch and recession, the plan changed.

In a statement released after the hearing, Foxwoods said it had "a financing commitment from many of its own local investors, who will commit greater financial resources to the project."

Foxwoods did not say how much converting the Strawbridge building would cost. It would have to file a petition with the gaming board to move to the site, at which point a hearing would be scheduled, Harbach said.

Ford reiterated to board members that 40 percent of the casino's revenues would go to charity. Two of the local backers in Washington Philadelphia Investors are foundations controlled by the families of entrepreneur Lewis Katz and developer Ron Rubin; another, Comcast-Spectacor founder Ed Snider, has also agreed to direct his profits to charities.

As Ford began to tell the board, "Never has there been a more significant charitable commitment," he was cut off by howls from protesters. One woman said, "You destroy a neighborhood and call it charitable?"

SugarHouse executives fared no better. When lead investor Neil Bluhm, a Chicago gaming billionaire, began to speak, someone yelled, "Put it in Chicago!"

The SugarHouse partners told regulators they would be able to borrow the money needed to complete an "interim" casino by early next year.

On Monday, they introduced plans for a scaled-down SugarHouse during a City Hall news conference. When he came to office, Nutter opposed building casinos on the waterfront. But needing the revenue and jobs they would generate, the mayor has thrown his support behind both projects.

Under its license agreement, SugarHouse was supposed to have been open by January. Harbach said the board had scheduled a hearing for May 6 in Harrisburg to consider the group's request for an extension.

Bluhm said the revised riverfront project would produce more revenue than a 2006 design would have. The interim casino's slots, he said, will bring in about $240 million a year, up from an earlier estimate of $182 million. The increase will come from boosting the number of slots at the interim casino from 1,500 to 1,700.

The city, Bluhm said, would get about $16 million in fees for hosting the casino, and the state should take in $82 million in tax relief from casino revenue.

After the interim casino is built, SugarHouse will add a 10-story garage and more gambling space, restaurants, and shops. Bluhm said the total cost would be $474 million.

For the interim casino, the partners would need to borrow only $150 million. Of that, Bluhm said, $30 million would come from suppliers of slot machines; the rest would come from banks and other lenders.

Bluhm told regulators he was confident the investors could get the money because they had invested $160 million of their own. "We don't have a dime of debt," he said.

Bluhm and other investors, including Philadelphia lawyer Richard A. Sprague, quickly left the auditorium after testifying, dodging protesters who chanted, "Shame, shame, shame!"

When the time came for public comment to the regulators, Jon Chin, executive director of the Philadelphia Chinatown Development Corp., echoed the frustration of many in the audience.

"Your responsibility should not be about how much revenue these casinos will generate," he said, "but what the impact is on the people of this commonwealth."