Station Square casino backed – Forest City agrees to fund South Side community group

By Mark Belko,
Friday, July 21, 2006
Pittsburgh Post-Gazette

A South Side community group has decided that the best bet for Pittsburgh’s slot machine casino is right in its back yard.

At a news conference yesterday, the South Side Local Development Co. threw its support behind the bid by Forest City Enterprises to build a casino at Station Square.

The endorsement came in conjunction with an agreement reached between the developer and the nonprofit group under which Forest City pledged to provide money for community-related programs and initiatives.

As part of a state tax credit program, Forest City would give $150,000 a year for 10 years to the South Side group for community projects if it gets the casino license, or $50,000 a year for five years if it doesn’t.

In exchange for the contributions, the developer could be eligible for tax credits of 70 percent under the Neighborhood Partnership Program, assuming the arrangement is approved by the state’s Department of Community and Economic Development.

The South Side group currently is in the last year of a 10-year agreement with PNC Bank under the same program.

Under state guidelines, an individual sponsor must pledge at least $100,000 over five years, unless there are multiple donors involved, in which case the commitment must be at least $50,000 for five years.

As part of its partnership with the South Side group, Forest City also has agreed to pay for the immediate hiring of a full-time staff person for the nonprofit group, at a cost of less than $50,000 for one year, to work on gambling-related issues. A second year of funding depends on the status of the slots license.

The agreement also calls for the creation of a steering committee that will give the South Side group a say in the design of the casino development and how it is integrated into the neighborhood. It is similar to a group formed to work with SouthSide Works developers.

The two also will work on possible transportation-related improvements involving East Carson Street and other areas near Station Square, a big issue given the concerns about possible traffic congestion resulting from a casino.

While the money is nice, Michael Healey, gaming work group chairman for the nonprofit group, said it ultimately decided to endorse the Forest City proposal because of the voice it will have in helping to craft the project and in protecting the interests of the South Side.

“This is not about money. We have not had our hand out. What we’ve done is said we want a seat at the table, because what we need to do is make sure our community is well represented, as it has been with SouthSide Works,” he said.

Mr. Healey said the $1 billion Station Square development, with a $512 million casino and up to 1,200 condominiums in a proposed residential neighborhood on its east side, is to cost about twice as much as SouthSide Works.

Before making its endorsement, the South Side group met with representatives from Forest City, which is partnering with Harrah’s Entertainment, and from Isle of Capri, which is proposing a casino near Mellon Arena. It also received presentations from those two as well as from the third bidder, PITG Gaming LLC, which wants to build a casino near Carnegie Science Center on the North Shore. It found the Forest City plan to be the “best proposal for the South Side community,” Mr. Healey said.

Not surprisingly, the two other bidders for the Pittsburgh license saw the endorsement in a different light.

“I think it’s pretty clear that the South Side [Local] Development Co. is receiving an attractive incentive from Forest City in exchange for their endorsement. We continue to believe, as does the city’s Gaming Task Force, the city Planning Department, and many others, that a casino along Carson Street is a traffic gridlock nightmare scenario of unprecedented proportions for Pittsburgh,” said Robert Oltmanns, a spokesman for Don Barden, head of PITG Gaming.

Isle of Capri spokesman Les McMackin said the operator continues to believe it has the best plan for the city, in part because it is pledging $290 million upfront for a new arena. It also is donating $1 million a year for Hill District investment.

Both Forest City and PITG Gaming have committed $7.5 million a year for 30 years to an arena under Gov. Ed Rendell’s alternative plan. Forest City also has pledged $1 million year for community development in Pittsburgh and is donating $25 million to Pittsburgh History & Landmarks Foundation for historic preservation and neighborhood projects.

(Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262. )

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