Giant Harrah’s unveils plan for Station Square casino complex

By Bill Toland,
Tuesday, January 24, 2006
Pittsburgh Post-Gazette

Early in their presentation to the news media, Harrah’s Entertainment and Forest City Enterprises played their trump card — Harrah’s, the largest gaming firm in the United States, is a man among boys, and their proposed Station Square casino is bigger than the ones drawn up by small-fry competitors.

Harrah’s envisions not only a slot machine casino, but also riverside restaurants, high-end shops, a 1,200-seat event hall, a VIP lounge and a two-story sports bar with a panoramic view of Pittsburgh’s skyline. “It’s more than just a slots parlor,” said Jan Jones, a senior vice president with Harrah’s and the former mayor of Las Vegas. It will be, she hopes, a weekend resort.

Yesterday, Harrah’s and financing partner Forest City made their long-awaited pitch from a meeting room at the Sheraton Station Square Hotel, which itself would expand by 200 rooms if the plan wins the state’s blessing.

The linchpin of the dramatic $1 billion makeover of Station Square would be the $512 million casino, with floor space equivalent to seven football fields. The casino would open with 3,000 slots, with room for expansion.

The casino is the economic engine of the plan, which would allow Forest City to expand the existing Sheraton, perhaps build another hotel tower, and add up to 1,200 condominium units, if demand meets expectation. Initially, developers expect about 2,000 permanent jobs but that could increase to 3,000 when the project is completed.

The casino, which would sit on the west side of Station Square, would displace the concert amphitheater there now. The condo towers would be to the east of the Smithfield Street Bridge, where a former warehouse now is home to several clubs and restaurants.

The condos are the key to the project’s overall theme of “new urbanism,” an old buzzword used liberally yesterday by Danno Glanz, a principal with the design firm Calthorpe Associates. New urbanism is a concept whose chief element seems to be mixed-use buildings in city cores — residential on the top floors, with offices or retail space taking up the bottom floors.

The proposed condo towers are also across the street from a light rail station and next to the Smithfield Street Bridge, which many South Side and Mount Washington residents cross every day on the way to Downtown jobs.

The potential for connection “is an amazing resource,” Mr. Glanz said. “It’s not often in our field that you get to work with a site that has the potential to realize so many components of new urbanism all in one project.”

Whereas one of their rivals for the city’s lone available casino license, Isle of Capri Casinos Inc., wants to invest its winnings in a new hockey arena for the Pittsburgh Penguins, Harrah’s and Forest City believe that creating a new city neighborhood from scratch is the better form of community development.

Brian Ratner, a top Forest City official, said his company has no plans to put a share of casino proceeds toward a new hockey arena, but added that he’d be willing to talk to local officials.

Two other outfits, both of which want to build a casino on the North Shore, are also competing for the casino license. The 2004 law that allows slot machine gambling in Pennsylvania permits only one casino to be built within Pittsburgh’s city limits.

The Station Square casino complex, which would also include a parking garage to the west of the casino, would bring about yet another face lift to what is considered the city’s top tourist destination. In the quarter century since Station Square opened, it has been transformed from what was essentially a city mall into an entertainment hub with nightspots, restaurants, coffee shops, a fountain, a tented concert hall and the iconic Hard Rock Cafe.

Much of that change has transpired since Forest City and Harrah’s bought the 52-acre complex in 1994, and all along, the companies have hoped to build some kind of casino there. (Forest City later bought out Harrah’s share, though the two have remained partners.)

At first, it appeared that the state would legalize riverboat gambling, and Station Square, already home to the Gateway Clipper Fleet, was the logical home for a floating casino.

That never came to pass. But thanks to the 2004 gambling law, Forest City, which has tried, but failed, to enter the gambling industry in other states, may finally realize a longtime dream.

“We’ve been joking for years that legalized gambling is right around corner,” Mr. Ratner said several times yesterday. “It turned out to be a very long block.”

Construction could begin immediately after the Pennsylvania Gaming Control Board awards the casino licenses, which should happen by early 2007. It might take as long as eight years to build the full complement of condos, and the timeline is largely dependant on demand.

Ms. Jones said this would be the only Harrah’s casino that does not offer table games such as roulette and blackjack, which typically are needed to give a casino its high-roller atmosphere and bring in visitors younger than 40. Those big spenders, who drop their money at clubs and shops instead of into slot machines, will need to be recruited if Harrah’s hopes to realize its goal of $550 million in yearly revenue.

Absent any contribution to the Mellon Arena replacement fund, the main community investment component of the Forest City plan would be a $25 million endowment for the Pittsburgh History & Landmarks Foundation. That endowment would be complemented by an annual $1 million community investment fund, to be headed by former Pittsburgh Steelers star Franco Harris.

Mr. Harris is one of several local investors who would own a 25 percent stake in the project. Other investors include William Lieberman and Charles Zappala, both of whom are politically connected Democratic fund-raisers, attorney Glenn Mahone, and Yvonne Cook, who was the top assistant to former county Chief Executive Jim Roddey.

(Bill Toland can be reached at btoland@post-gazette.com or 412-263-1889.)