SugarHouse Casino wins slots license extension

The Pennsylvania Gaming Control Board yesterday unanimously voted to extend a slots license for the SugarHouse Casino, clearing the way for a slots parlor on the Delaware River in about 13 months.

With a green light from regulators, attention now will shift to SugarHouse partners and whether they can come up with $150 million in today's difficult lending environment to get the project started.

"I stay up nights worrying about that," said Neil Bluhm, the lead SugarHouse investor and a Chicago gaming entrepreneur. But he told regulators at a hearing here that he was confident of being able to do that quickly.

Bluhm said it could take three or four months to line up loans as well as other building approvals, and nine more months to build the facility.

"This plan can get up and open quickly," Bluhm said.

The seven-person gaming board also approved a modified design for the project, on 22 acres of waterfront land on Delaware Avenue between Northern Liberties and Fishtown.

SugarHouse will open in an interim facility with 1,700 slot machines. The modified casino building is only one story instead of two, and is surrounded by surface parking. The project has eliminated a promenade over the waterfront and will maintain a natural shoreline with a pedestrian path.

"We spent a lot of time putting together this modified plan," Bluhm said. "We believe it works."

Before voting on the license, the board heard nearly four hours of testimony from SugarHouse officials, as well as opponents and supporters of the project.

More than 400 people packed a meeting room at the Convention Center. Twenty-two residents testified, with the crowd splitting among those who wanted construction and casino jobs, and those who thought a big-box development was wrong for the waterfront and surrounding neighborhoods.

Construction workers held signs that said "Build Now" and "Philly Casinos; Philly jobs," and applauded SugarHouse investors.

"In the city of Philadelphia, we've lost hundreds and thousands of jobs," said Pat Eiding, president of the Philadelphia Council of the AFL-CIO. "You want to make a neighborhood better, you put people to work."

The interim casino is expected to create 500 construction jobs plus 500 permanent jobs. "For over 25 years, the SugarHouse site has not generated one job or one dollar," said Tim Breslin, a Fishtown resident for 25 years and a member of the pro-casino Fishtown Action. "We need SugarHouse to get started as soon as possible.

Caryn Hunt of Neighbors Allied for the Best Riverfront dismissed the project - which will eventually include a 10-story parking garage - as "massive, autocentric, and inharmonious."

She said jobs should not be created at the expense of "cannibalizing neighborhoods."

Several residents from nearby communities expressed concern about increased traffic, overall congestion, and a rise in petty crimes.

Matt Ruben, president of the Northern Liberties Neighborhood Association, called the redesigned project "a slot machine strip mall" that violated the ambitions of the Nutter administration to develop a more open, green, people-friendly waterfront.

Gaming regulators gave SugarHouse two years to open its slots parlor or lose its license.

While acknowledging a "very, very difficult" lending environment, Bluhm said the project should be able to borrow $150 million to start construction.

In addition to Bluhm, the other investors include Philadelphia developer Daniel Keating III, lawyer Richard A. Sprague, former state Supreme Court Justice William Lamb, auto magnate Robert Potamkin, and business-services entrepreneur Jerry Johnson.

SugarHouse, one of two slots parlors planned for Philadelphia, was supposed to have 1,500 slot machines operating by now. But in the last year, the project has faced political opposition and delays in getting permits.

Nutter came into office in 2008 opposing big-box casinos on the waterfront. But the mayor was pressured into backing down after Gov. Rendell and some state legislators threatened to strip the city of financial benefits from the gaming industry. In particular, there was legislation to take away millions for finishing construction of the Convention Center expansion.

Bluhm said the design of the interim casino will have better public access to the river's edge, a goal of Nutter's waterfront plan.

Bluhm said the interim casino would cost $310 million. The partners, he said, have put up $160 million of their own money, requiring a further $150 million in loans. Of that sum, he said, the casino should be able to get $30 million in lending from slot equipment suppliers, with the remaining $120 million coming from banks or other lenders.

After the interim facility is constructed, Bluhm said, work on the garage should start in four to nine months. That construction, he said, would be financed from the casino's projected cash flow of $60 million a year.