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July 29
By Kellie Patrick Gates
For PlanPhilly
Earlier this month, HSP Gaming – the developers of SugarHouse Casino – filed a petition asking the Pennsylvania Gaming Control Board to allow them to obtain financing to build an interim casino, which is slated to open in June 2010.
Just a tad more than two pages long, the document summarizes the interim plan to build a 40,000 foot gaming floor with 1,700 slot machines, three food and beverage outlets, and about 1,465 parking spaces. The board gave its nod to the interim plan in May.
HSP says the financing documents it has with the potential lender require Gaming Board approval for to close on the loan.
The petition document says nothing about how much money HSP will borrow, from whom they will borrow it, or whether there are any other conditions the lender may place on the loan.
Critics say casinos should have to reveal such information. But the Gaming Control Board says Pennsylvania's gaming law deems it confidential.
“In public, SugarHouse should have to reveal their financing,” said Paul Boni, attorney for Casino-Free Philadelphia. “Why should we trust the black box that is the Gaming Control Board?”
SugarHouse is following the process set up by the State Legislature, said Douglas Harbach, spokesman for the Pennsylvania Gaming Control Board. There is no other filing mandated by the PGCB that requires more financial detail, he wrote in an email.
But Boni and the other anti-casino activists aren't the only ones who feel there needs to be more transparency. State Sen. Larry Farnese will today send a letter to Gaming Control Board Chairman Gregory C. Fajt asking that “all information accompanying or related to HSP's petition be made available to the public.”
Harbach said the Gaming Control Board's Office of Enforcement Council could request more detail from SugarHouse. The OEC has 30 days to file a response to SugarHouse's July 10 petition. It has not yet done so. But even if the OEC asks for more information, “any financial documents would not be public because they would be proprietary information deemed confidential through Section 1206 of the (state gaming) Act,” Harbach said.
Farnese disagrees. “I understand that there is proprietary information that is part of each and every business – I'm an attorney, and I practice in that area,” he said. “But I do believe that when it comes to the casinos and gaming, there should be a lessened degree of confidentiality and a heightened degree of public participation and disclosure. Especially if the financial stakeholders change in a project, all should be made public.”
Farnese said he believes the burden to prove that releasing information would be harmful to SugarHouse or any casino should be on that casino and the Gaming Control Board.
Farnese is one of the authors of Senate Bill 711, which calls for changes in the Gaming Act, including a change in what is considered confidential and what must be made public. A companion bill remains in committee in the House, he said. But Farnese believes much of SugarHouse's financing information should and could be made public under existing law. “I don't think the owners' phone numbers and home addresses should be there, but I do believe the amount of money paid, the money at stake, where the financing is coming from, who the stake holders are, interest rates, and terms of the loan or conditions” should be public.
SugarHouse spokeswoman Leigh Whitaker declined to comment.
Earlier this year, SugarHouse chief investor Neil Bluhm revealed some financial information about the interim plan at the May hearing at which the board gave it's approval. He said then he was optimistic about financing for the interim facility for two reasons: The SugarHouse team has $160 million in equity investment in the project – more than double the $140 million they will need to borrow. SugarHouse is projecting the interim facility will yield between $60 and $70 million in cash flow, and while banks are no longer willing to loan upwards of four times cash flow, they'll still loan 2.5 times that amount.
Contact the reporter at kelliespatrick@gmail.com
Comments
Well-lll, welll-lll, well... seems that, once again, this casino project breaks the PA Gaming "Control" Board's agreement on funding and economic stability. Above and beyond the past three years' histrionics between HSP Gaming and others, one can't help but be aghast at the imbalanced favoritism at work. Add-in all of the "giv'ems" the Governor and his patsies have tailored for this pet private commercial concern called "SugarHouse", and the lanscape quickly fills with a common the "usual suspects": the Guv ..(of course), Fumo (who still might not have gotten his rightful deserves), Richard Sprague (see also:Fumo, Vincent), Ed Snider, ex-Mayor John Street,...
The mind boggles how such backroom dealing a city/state can tolerate. Is it a Harrisburg-sponsored footrace to show whose state and local governments are REALLY the most corrupt?!? "Step aside New Jersey, ..and allow us to show y'how it's really done!" News reports of New Jersey, body parts sales, mayors, rabbis,etc., will pale in comparison
Though active in the fight against placement of casinos in close proximity to residences, I have other expectations of "Good Government", as well. Not too long ago, I couldn't help but notice the rules of ethical political behavior, those which had at one time been sincerely espoused by D.A. Edward Rendell, had been left in dust. Those "rules", to which Mayor Ed Rendell once professed to be his guiding principles not so long ago(the late '70s/ early '80s), steadily diminished in rear-view mirror of Rendell's advancement.
Now, this many years later, I have a slightly revised expectation (ohhh, let's call it for what it really is: a wish) that -eventually- there will be the full in-the-light-of-day exposition of the corruption and legal manipulations that have gotten into this sloppy mess of legalized gambling "in" Philly. My hopes are that federal agents are already actively taking notes, and that this charade of a "public process", which Rendell et al. have foisted on the citizens of Philadelphia, will be duly condemned.
The Senator's letter is a bit weak. Let's hope that he files a Petition to Intervene. Here is an example of how strong senators can be:
http://www.senatororie.com/PDF/joint-petition-071408.pdf
That effort, combined with a fervent public relations campaign, resulted in Neil Bluhm's company disclosing financial documents.
At the very least, Senator Farnese's much-touted "reform" bill to amend Act 71 should be revised to require that all applicant info be made public (it currently does not so provide).
The senator's efforts are appreciated. Results would be even better.