Barden doesn't yet have money to build casino By
Mike Wereschagin TRIBUNE-REVIEW
Thursday, May 15, 2008 Just five days before the payoff deadline on a $200 million loan, Don Barden hasn't secured the money he needs to build a North Shore casino, his attorney told state gambling regulators Wednesday.
The state Gaming Control Board planned to hold a meeting in Mercer County to review the $800 million financing package Barden is negotiating but postponed the meeting at Barden's request. His attorney, James Eisenhower, sent board members a letter requesting the delay Tuesday night and sought to reassure them yesterday.
"I just got off the phone with Mr. Barden. These negotiations went late into the night last night. They're continuing now as we speak. They will continue until we get the deal done," Eisenhower said.
Work on the Majestic Star Casino began in December, paid for by the $200 million bridge loan, which is due Monday. Barden expects to pay it off from the $800 million financing package. The casino, scheduled to open in a year, is expected to cost $770 million.
Barden risks defaulting on the loan if he doesn't get the money by Monday, according to testimony to the gambling board last month from another Barden attorney, Barbara Kaye. A possible extension on the loan is "one of the things we're negotiating," said Bob Oltmanns, Barden's spokesman.
"It's a very, very large deal," Eisenhower said. "It's a very complex deal, with many layers and players and moving parts."
Barden's company, PITG Gaming Inc., is seeking the money from a bevy of financiers, including Credit Suisse and other banks.
The terms of whatever deal Barden works out "go to the underpinnings of the financial suitability and viability of the licensee," said gambling board Chairwoman Mary DiGiacomo Colins.
Colins said she'd like the board to rule on the financing plan before the end of June and told Eisenhower to give the board "ample time" to review it. Once the board gets it, they should consider it at a regularly scheduled meeting, rather than rush to approve it, said board member Sanford Rivers.
"It's not going to be expedited," Rivers told Eisenhower.
The financing plan is part of a larger request Barden made to board members when he asked them to let him change some of the plans he submitted before they granted him Pittsburgh's lone slots license. Barden also wants to delay building a ballroom and outdoor amphitheater, and to stretch out his $3 million commitment to the Hill District over five years instead of three.
The delay in locking down money to build the casino doesn't concern Pittsburgh Mayor Luke Ravenstahl.
"I was just down past the casino yesterday, and steel's coming out of the ground, and they're moving forward," Ravenstahl said. "That's far ahead of schedule versus any other (stand-alone) casino in the state, and I think that's good news. Certainly, with the volatile economy the way it is, it's hard to finance anything, whether that's a casino or another development project." The board plans to meet again today to hear public comment on Valley View Downs, a planned Lawrence County harness racing track, which is expected to win the last available racetrack casino license.
Stephen Hilbert has asked the board to allow him to withdraw as a partner in the track, which would mean he would have no equity in the project but also won't be subject to a background investigation. The request is not on the board's agenda. Barden doesn't yet have money to build casino - PittsburghLIVE.com