DEVELOPERS lining up to apply for Philadelphia's second casino license may find themselves facing some unusual competition.
U.S. Rep. Bob Brady says the city should get into the casino business.
Brady wants the city to build a casino at the foot of the Walt Whitman Bridge in South Philly on the city-owned site of the former Food Distribution Center.
The city, in Brady's plan, would bring in an experienced operator to run the casino and use the profits to fund the Philadelphia School District and the underfunded municipal pension plan.
The plan, however, faces some serious short-term and long-term obstacles.
For one, Mayor Nutter says it violates the state consitution. That could complicate Brady's idea to put on the May 21 primary-election ballot a referendum asking city voters to approve borrowing $500 million to pay for the project.
For another, the state Gaming Control Board set Thursday as the deadline for applications for the license. Brady won't be ready to pitch the idea to the state until six months from now, after the referendum.
Nutter this week said he thinks the state Constitution prevents cities from submitting casino applications. He expects "anywhere from four to six legitimate businesses or individuals" to apply for the license. A spokesman for Nutter said the mayor had no position on the merit of any of the applications "at this time."
Brady, whose frustration with Nutter was palpable during an interview Thursday, said the mayor seemed to be relying on the same legal team who advised the city repeatedly and unsuccessfully challenged, in court, the efforts of the two investor groups that originally were selected in December 2006 to operate casinos in Philadelphia.
One of those groups planned to build a casino on Columbus Boulevard at Reed Street, but lost its license in December 2010, when the project stalled.
"It's a no-brainer," Brady said of a city-owned casino. "There's absolutely no downside to this thing that I can think of."
Brady thinks a city-owned casino could generate $40 million to $50 million per year if it is built with 5,000 slot machines and 250 table games, the maximum allowed by the state gaming law.
His proposal, called GamePoint, would develop a 30-acre lot on Packer Avenue at 3rd Street with a 300-room hotel, a 5,000-seat concert venue, a parking garage, a nightclub and a "tailgate park" for people attending games at nearby Citizens Bank Park, the Wells Fargo Center and Lincoln Financial Field.
Brady is lining up City Council support. A referendum to borrow the money for the project would start as legislation in Council.
Councilman Jim Kenney calls Nutter's rejection of the idea "shortsighted."
Councilman Mark Squilla asks: "If we can do it and the city can profit, why not?"
Councilman Kenyatta Johnson repeatedly said he is keeping an open mind about what he called an "interesting concept." The Food Distribution Center is in his district.
Council President Darrell Clarke's thoughts remain a mystery. Brady said Clarke was interested in exploring the city-owned casino concept after the two spoke on the phone Thursday morning. But Clarke, through a spokesman later that day, said he was unfamiliar with the proposal.
Clarke, in his inaugural speech as Council president in January, said the city should "use the assets we have in new ways to create jobs and raise revenues."
His close relationship with developer Bart Blatstein, one of several people expected to apply for the license, may explain his reluctance to discuss Brady's plan.
Clarke, speaking at a party Blatstein held on Oct. 25 to unveil his plans for a casino at the old Daily News/Inquirer building at Broad and Callowhill streets, said he was not endorsing any applications.
"You see that? Wink, wink," Clarke added as he winked to the crowd and Blatstein beamed.
Brady said he would enlist the Philadelphia delegation to the state General Assembly to push for the Gaming Control Board to give Philadelphia more time to prepare its casino bid.
The pitch to Harrisburg: The city desperately needs money the state can't or won't provide. So here is a chance for the city to solve its own financial problems.
State Sen. Anthony Hardy Williams helped fight off legislative efforts in Harrisburg to open up the bidding statewide for Philadelphia's second casino license. He is interested in the idea of a casino funding schools and pensions.
"If we're going to support the gaming license being here, the more revenue the better," he said.
There is some precedence for Brady's proposal.
The city government, through the nonprofit used to manage land at Penn's Landing, gave a group of local investors an option to lease city-owned land for a casino application that was denied by the gaming board.
In Chicago, Mayor Rahm Emanuel, a former U.S. House colleague and friend of Brady's, is trying to get state approval for a city-owned casino there.
Brady in 2010 asked the Pennsylvania Intergovernmental Cooperation Authority (PICA), which oversees Philadelphia's finances, to analyze how the city could apply for a casino license.
PICA issued a report with the title: "If the House Always Wins, Be the House." The report said it is legal for the city to apply for a license and could create an authority or use an existing agency like the Philadelphia Authority for Industrial Development to run the project.
Uri Monson, PICA's executive director in 2010 and now chief financial officer in Montgomery County, offered two caveats on the casino report.
PICA relied on an economic model that Brady obtained from a casino consultant. And the report didn't take into account the financial impacts on the city's second license from now-operating casinos in Philadelphia, Chester and Bensalem. Brady is undeterred, though his frustration is already showing.
"Sometimes I think I spend time chasing dreams and fighting people to help them," he said.
- Staff writer Catherine Lucey
contributed to this report.