Tentative CBA agreement on the Hill

Casino financing remains unsecured

Two top Majestic Star officials said Tuesday the casino operator doesn't have enough money to build the North Shore slots palace, but will soon.

Majestic Star general manager Ed Fasulo said worries from local politicians that the casino won't be built because of sweeping changes to the financing have been "blown out of proportion."

"The financing is not complete, yet," he said, echoing comments of casino owner Don Barden. "But we are working on it."

Fasulo said the company is seeking $650 million to finance the casino, originally estimated to cost $450 million, because of rising construction costs, higher financing fees and months of delays created by lawsuits protesting the size of the casino's garage filed by the Riverlife Task Force.

He said it's not unusual for projects with complex financing to undergo changes.

During the 2006 slots bidding process, Don Barden offered to direct $1 million a year for three years to the Hill District. Last week, he petitioned the state Gaming Control Board to allow him to back out of the commitment and remove a ballroom and outdoor amphitheater from plans for the slots parlor -- moves that state Sen. Jim Ferlo, D-Highland Park, and other state lawmakers have criticized.

"I was supposed to get those development rights, which had a substantial economic value to them," Barden said. "But they were given to the Penguins."

He said parking revenues from the Mellon Arena site would have made him $1.5 million a year. Development on the rest of the 28-acre site would have been worth "tens of millions of dollars."

"What should I do now, pay to develop the site for the Penguins when they're going to make the money and I'm not?" Barden said.

The city-county Sports & Exhibition Authority awarded the development rights to the Penguins.

The gambling board must approve Barden's petition for the changes he has proposed to take effect.

Allegheny County Chief Executive Dan Onorato said he and Pittsburgh Mayor Luke Ravenstahl hope to meet with Barden this week to discuss the changes. Onorato said Barden should keep the $3 million commitment to Pittsburgh, but not necessarily in the Hill District.

"He's lived up to everything he's committed to," Onorato said. "That $3 million is going to be spent somewhere."

Ferlo disagreed with Barden's reason for trying to retract the $3 million from the Hill District. Ferlo said Barden's offer didn't specify that Majestic Star must win the development rights.

"The commitment was never conditioned upon the allocation of development rights to Majestic Star," Ferlo wrote in a letter yesterday that asks Barden to answer several questions about the casino's financial viability.

He criticized Barden's financing plan as "a moving target."

Barden said he's willing to meet with Ferlo to discuss the casion's financing. He declined to discuss details of the casino's financing.

"(Ferlo) is unfamiliar with high-level finance," Barden said. "This is out of his league."

Onorato said he expects the city, county and Sports & Exhibition Authority can reach a compromise with Barden.

"He's a partner. He's not the enemy here," Onorato said.

Separately, the One Hill Community Benefits Agreement Coalition plans to announce details today of a deal with city and county officials to bring jobs and development to the Hill District.

Onorato, Ravenstahl and the Penguins aren't participating, but representatives for all three said a final agreement is close.

"We have a tentative agreement," said Carl Redwood, One Hill's chairman, echoing a similar announcement the group made Thursday.

The group's roughly 100 members must vote on the tentative agreement May 3, Redwood said.

One Hill spokeswoman Jennifer England said the agreement addresses every part of the group's "blueprint for a livable hill." Chief among the blueprint's requests is a development fund that the One Hill Coalition could control.

City officials have said they would use corporate sponsors, not taxpayer dollars, to create such a fund. The sponsors would become eligible for tax credits.

The Hill District group seeks guaranteed jobs for neighborhood residents, a grocery store, social services programs and funding for a new YMCA.