Would-Be Casino Savior Visits Pittsburgh For Money Talks

Neil Bluhm Meets With Mayor Ravenstahl, County Executive Onorato

POSTED: 11:57 am EDT August 13, 2008
UPDATED: 10:58 pm EDT August 13, 2008

PITTSBURGH -- Construction on Pittsburgh's casino could restart as early as next week, according to the man who want to lead the investment.

Neil Bluhm, who is trying to become the new lead investor in the $780 million slot machine casino, said the stalled project could restart pending the state's approval of his takeover plan.

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Bluhm said that if the state Gaming Control Board doesn't approve his takeover proposal from Don Barden, it could be years before the casino gets built.

Bluhm met Monday with Allegheny County Chief Executive Dan Onorato and Pittsburgh Mayor Luke Ravensthal.

"We've increased our commitment to $200 million in equity in order to finance this project," Bluhm said. "The financing, we believe, is in place and ready to go, subject to the gaming board approving the transaction."

Some said Wednesday's meeting represented a rehearsal for Thursday, when Bluhm will go before the state Gaming Control Board in Harrisburg for a hearing about the casino's future.

Ravenstahl and Onorato can't go to Harrisburg because they will be at a groundbreaking for Pittsburgh's new multipurpose arena -- a project which counts on yearly funding from the casino to help pay for construction. The first promised payment of $7.5 million is due in October 2009.

"There's absolutely no local tax money, which is different than the other two stadiums, no local RAD money, no local sales tax money in the deal at all, and there's no threat that they can go after that," Onorato said.

However, the state has guaranteed that it will pay off the money borrowed to build the arena, with, at least at this point, no provision that any new casino licensee other than Bluhm will have to pay for the arena.

Work on the North Shore casino has stopped because contractors on the job are owed millions of dollars from PITG Gaming, led by Barden, who currently holds the city's casino license.

Barden said he has been unable to line up enough financing to move ahead. A group led by Bluhm called Pittsburgh Gaming Holdings has offered to take over the partially built casino.

"The casinos that are serving more local areas like this one are actually doing quite well and the other Pennsylvania casinos are doing well," Bluhm said.

Bluhm, a Chicago-based real estate billionaire, is asking the gaming board to quickly approve his so-called "rescue mission" and prevent the project from falling into bankruptcy, which he said could delay the casino opening for up to four years.

"It's going to be in litigation in a messy bankruptcy and a lot of innocent people will be hurt," Bluhm said. "Contractors are owed over $50 million. Those are local contractors, mostly."

"I'm satisfied with what I heard today," Onorato said. "I think it's going to be good for the region. It's up to the gaming board to go through and vet all of those issues and get it into writing."

Assuming the board determines that Bluhm's financial commitment is solid, and that he will deliver on Barden's promises, Ravenstahl said, "I'm committed to supporting this new ownership and doing what we can to make sure that they're approved and construction can continue."

State Sens. Jim Ferlo and Jane Orie don't want Bluhm to simply be handed a license. They've asked the Gaming Control Board to restart the project from scratch and open it to competitive bidding, which is how Barden got the license in December 2006.

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