Harrah's Financing Downtown Pittsburgh Casino
Others backing the project include local investors, William Lieberman and Charles Zappala, who both have a nine percent share of the project. Additional investors who have received Harrah's loans to invest are Glenn Mahone, Allegheny County Airport Authority board chair, who has a two percent stake in the casino project; and Yvonne Cook, president of Highmark Foundation, with just one percent.
The Pennsylvania state Gaming Control Board held licensing hearings last week, as part of ongoing discussions with Harrah's and Forest City Enterprises, which is one of three competitors seeking the license to operate a Pittsburgh casino.
According to Albert Ratner, Forest City board's co-chairman, Forest City and Harrah's first began discussing a partnership in the 1990s when there was a possibility of riverboat gambling being legalized in the area.
Credit Available
Forest City, in a statement, said that Harrah's "making available a credit facility is a normal business practice for the real estate and gaming industries. The loan is available for Forest City and the limited partners as a source of lending if they choose. They are commercially reasonable terms and must be paid back in full with interest. We are proud to have a strong group of local partners who are owners in this project."According to John Verbanac, a consultant to Forest City and Harrah's, all the investors must pay back the loans. "They're completely responsible for every single dollar of that money," he said.
During last week's hearing, gaming board officials did not raise any objections to the loans, and Forest City officials said they were allowed under the state's gaming laws and regulations.
A report released this week indicates that there are several casinos under development in the Pittsburgh area. The report said that the Majestic Star Casino would deliver the biggest payout for taxpayers if it lands Pittsburgh's casino license.
With 5,000 machines -- more than either of its competitors for a casino license in Pittsburgh, the Detroit company's casino would bring in more than $1.3 million a day, or $483.6 million a year, according to the state Gaming Control Board.
Gambling regulators released a one-page summary of projections compiled by PricewaterhouseCoopers on how much money the state expects a Pittsburgh casino to make. State officials declined to release the full report, however.
The much-publicized Forest City Enterprises casino project came in second on the state's projections with expected annual revenue of $426.3 million. That's far less than the company's own projections for its proposed Harrah's Station Square Casino making $538.7 million a year, the state said.
The Isle of Capri casino project finished third, with the state saying its casino would bring in $344.9 million a year, according to the state gaming board.
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