he state Gaming Control Board approved a us$ 220 million financing plan for Bluhm to build the SugarHouse casino on vacant land along the Delaware River, north of the city's downtown area.
"We are delighted and are ready to get moving in a few days'' on construction of the slots palace, Bluhm said. The project has been delayed for several years by citizen opposition, delays in getting necessary construction permits from the city and problems getting financing during the current recession.
Bluhm's lawyer, John Donnelly, said the casino investors will close tomorrow on the financing with a consortium of banks and other financiers and the long-delayed construction could start by the end of the week.
Bluhm, who got a slots license from the state back in December 2006, said he hopes the first phase of the casino, with about 1,700 slot machines - and some table games, if the state legalizes them - will be open by next August. He said he and his investors have already spent us$ 170 million on the casino from their own pockets, including us$ 50 million for a state slots license plus the costs of land acquisition and lawyers fees.
Some board members and other state officials have been upset at the delay in building the two casinos authorized for Philadelphia - SugarHouse and Foxwoods, which is also to be built along the Delaware River, about four miles south of SugarHouse.
State officials are anxious to get all 14 casinos authorized by the 2004 law up and running as soon as possible, so they will produce more tax revenue for tax relief, economic development, aid to the horse-racing industry and aid to host towns and counties. So far nine casinos are open, six at racetracks and three at stand-alone locations.
A group of citizens who oppose gambling, called Casino-Free Philadelphia, and some state lawmakers, including Sen. Larry Farnese and Representative Mike O'Brien, whose districts include the two casino sites, have opposed the casino projects, saying they shouldn't go along the river and along busy Delaware Avenue. The citizens group said the casinos "will inflict financial damage to families, communities, local businesses and our city budget.''
In a letter to the board, Farnese and O'Brien complained about the secrecy that SugarHouse is seeking regarding its financing, claiming the Bluhm group wants "to avoid certain state and local taxes'' and "avoid a substantial realty transfer tax.'' Mr. Bluhm said that in the current economic atmosphere, banks want more confidentiality than in the past.
Board Chairman Greg Fajt said that Pennsylvanians "are waiting for additional property tax relief'' from the 14 casinos authorized by a 2004 law, adding, "My job (as a gaming board member) is to be a fair but firm regulator and to get the licensed casinos in Pennsylvania up and running.''
The other Philadelphia casino, Foxwoods, is also behind schedule, and it now is supposed to have its first phase operating by May 2011. Fajt is from the Pittsburgh area, as are two other gaming commissioners, Ken McCabe and Sanford Rivers. The latter two praised Bluhm for rescuing the Pittsburgh casino 18 months ago, when the original developer, Don Barden, ran into money problems.
The financial consortium that is lending Bluhm the us$ 220 million for SugarHouse includes Credit Suisse, Jefferies and PNC Corp. Jethro Heiko, a casino foe, said his group plans to protest outside PNC's Philadelphia headquarters, urging it not to lend money for a "predatory casino.'' He said slots casinos are "part of a financially tanking predatory trade based on addiction that peddles false hope to those in desperate need.''