Baltimore casino plans face new legal hurdle

The state’s second effort to bring a casino to Baltimore and a developer’s drive to stop it both inched forward Wednesday, setting up a court battle in the coming days that could determine how soon slot machines are up and running in the city.

Baltimore City Entertainment Group, the would-be casino developer spurned by the state in 2009, filed a motion Wednesday morning in Baltimore City Circuit Court seeking an injunction to block the state from opening the process up to other gaming companies.

The panel that vets casino proposals still hopes to open the Baltimore project up to a new gaming company by early next week, but its chairman said a loss in court could delay the process by up to a year. =

“We have an obligation to the citizens of the state to move this forward as expeditiously as possible,” said Donald C. Fry, chairman of the Video Lottery Facility Location Commission. “Until a court tells us not to issue [a request for proposals from developers], we plan on moving forward.”

Meanwhile, the city Board of Estimates on Wednesday identified the properties available for the project — 12 parcels totaling nearly 12 acres along Russell and Warner streets south of M&T Bank Stadium, and a 4-acre site nearby that could be used for parking.

BCEG has waged administrative and court challenges since its bid was tossed 16 months ago because it missed a series of self- and state-imposed deadlines to deliver a full proposal for the Baltimore casino project and pay $19.5 million more in license fees.

A hearing in its appeal of a State Board of Contract Appeals decision is scheduled for May 25.

BCEG, in seeking the injunction, argued that opening up the bidding process again would spark a new round of lawsuits against the state if BCEG is successful in its appeal.

A hearing on the injunction motion had not been scheduled Wednesday evening, but is expected to come late this week or early next week.

Baltimore’s casino would be the state’s second largest, with up to 3,750 machines.

State officials hope to receive proposals from prospective developers by the end of July and award a license by the end of the year. Fry said action taken Wednesday by the Board of Estimates could streamline and speed the process.

Along with approving the available properties, the board also outlined financial conditions that a developer must meet to be considered for the city’s slots license, including provisions that would eventually ensure the city at least $17.2 million in annual property tax and ground rent payments.

Ground rent would escalate from at least $8 million in the first year to $14 million in the fifth year and beyond. But the casino could be forced to pay more — 2.99 percent of its proceeds – if that amount is greater.

State fiscal analysts in 2007 estimated Baltimore’s casino would generate $265 million in its first year of operation and $426.7 million the year after. That would leave the casino with a ground rent of $12.76 million to the city, which would own the property, and $3.2 million in property taxes, the minimum due each year.

Mayor Stephanie Rawlings-Blake said after the board meeting that she “strongly supports” the development of a casino in the city.

“It’s going to help us lower the property tax, which is going to help us keep residents in Baltimore, and bring new residents to Baltimore,” the mayor said.

City Comptroller Joan M. Pratt cast the lone vote against the slots deal. She said construction of a casino in the city could harm Pimlico Race Course, cannibalize recreational spending that otherwise would go to hotels, restaurants and bars, and prey on the most vulnerable.

“The citizens who can least afford to gamble will be the ones who visit casinos,” Pratt said.

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