Original bidder for Baltimore casino license plans more legal action
Posted: 6:21 pm Tue, April 26, 2011
Daily Record Business Writer
ANNAPOLIS — The state is seeking a new developer to build a casino in downtown Baltimore, but the process, already ensnared in a legal challenge, could be pulled back into court as soon as Wednesday.
Baltimore City Entertainment Group said Tuesday it would request a restraining order and injunction Wednesday in Baltimore City Circuit Court to stop the state from opening the project up to developers. BCEG was the sole bidder for the Baltimore license in 2009, but the state commission charged with evaluating casino projects threw out the BCEG proposal in December of that year after a string of delays.
“We think it’s in the best interest of the state of Maryland that we move forward,” Chairman Donald C. Fry said of the Video Lottery Facility Location Commission’s decision to seek a new developer.
Legal issues aside, the state’s request for proposals is contingent on approval by Baltimore’s Board of Estimates of a minimum set of conditions casino owners would have to meet to be considered, including using one of the city-owned properties available, agreeing to pay ground rent and other tax issues.
Fry said the city’s outline would streamline the process after BCEG officials complained in the first go-round that negotiations with Baltimore delayed the project by months.
The agreement is on the city board’s agenda Wednesday, and Fry said the state’s call for proposals could be issued Thursday or Friday. Bids would be due in late July, and a license could be awarded by the end of the year, Fry said.
The Baltimore casino could be the state’s second-largest, with up to 3,750 slot machines, and would contribute hundreds of millions of dollars in tax revenue lawmakers had hoped for when they approved gambling legislation in 2007.
John F. Dougherty, a Kramon & Graham PA attorney representing BCEG, said the commission’s move to find a new developer in Baltimore was an attempt to “short circuit” the legal process.
BCEG challenged the commission’s rejection of its bid, but was unsuccessful before the State Board of Contract Appeals and appealed to Baltimore circuit court. A hearing is scheduled for May 25 in that suit.
“The main concern is there is a legal process that isn’t over,” Dougherty said.
Dougherty said if the commission moves forward and attracts more interested developers, they, too, would have standing to sue if BCEG is successful in its legal challenge and wins the gaming license.
“It isn’t that much longer to wait,” he said. “The matter has been waiting for 18 months,” he said. “Four weeks doesn’t seem like that much longer to wait.”
But after listening to its lawyers for a nearly 90-minute, closed-door session Tuesday, Fry said the commission was comfortable enough it would prevail once again over BCEG to find another casino operator.
Fry said he has heard from between four and six parties interested in the license, adding he is “hopeful that we will receive multiple bids for Baltimore City.” Fry said the commission would welcome another try by BCEG, led by Canadian homebuilder Michael Moldenhauer.
“I don’t think we’re going to be dealing with a bid any time soon,” Moldenhauer said after the commission’s meeting.
The slots commissioners hope to also attract developers to the Western Maryland slots license, which has not drawn bids the two times the state offered it up.
In the legislative session that concluded April 11, lawmakers offered additional incentives to spark interest in the Rocky Gap Lodge & Resort slots license. The bill, which is awaiting the governor’s signature, would knock the tax rate on slots proceeds from 67 percent to 50 percent for 10 years, and waive $3 million in license fees.
“Hopefully we can award both Baltimore City and Rocky Gap by the end of this calendar year,” Fry said.