Rescue Of Troubled Pittsburgh Casino Get State's OK
Posted: 8:50 am EDT August 14, 2008Updated: 8:25 pm EDT August 14, 2008
HARRISBURG, Pa. -- Construction is expected to restart within days on a troubled Pittsburgh casino project after state officials approved a rescue by new investors.The rescue plan on the partially built $780 million casino on Pittsburgh's North Shore received the approval Thursday from the seven-member Pennsylvania Gaming Control Board.The unanimous vote came after the gaming board's staff gave the deal a green light during a four-hour hearing.Chicago real-estate billionaire Neil Bluhm is leading the new investor group.During the hearing, Bluhm told the gaming board that its approval would allow contractors to be paid and work to restart Monday.Construction stopped July 1 after the licensee, Detroit-based businessman Don Barden, defaulted on loans and ran out of money.On Wednesday, Bluhm met with Pittsburgh Mayor Luke Ravenstahl and Allegheny County Chief Executive Dan Onorato to talk about casino woes.The meeting was held since the two were already scheduled to attend the Pens' arena groundbreaking.Some Pittsburgh-area legislators have asked the board to revoke Barden's license and make it available to a new pool of competing applicants -- a process that could add a year or more to the facility's project opening date, which had been slated for May 2009.In a letter to the board, Sen. Jim Ferlo said the agency's review was not an open, objective process but rather an attempt to "speedily cover its tracks" in the flawed original decision to approve the casino."Despite my optimism that a Pittsburgh casino ultimately will be successful, I have serious concerns that the decision-making process of the board has grave deficiencies," the Allegheny County Democrat wrote.Bluhm warned that if the gaming board didn't not approve the deal, the property will plunge into bankruptcy, potentially bogging it down for years in litigation. Bluhm also controls a stake in the planned SugarHouse Casino in Philadelphia that is stalled by opposition from state lawmakers and city officials.Barden, who has defaulted on loans for the project, would keep a minority stake in the nearly $800 million Pittsburgh project. As part of his bid to win the casino license from state regulators in 2006, Barden pledged more than $200 million over 30 years to help build the Penguins a new arena, a commitment that Bluhm has said he will fulfill if the gaming board approves his rescue plans.
Copyright 2009 by WPXI.com. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.












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