Second try at finding Baltimore casino developer moving forward

Daily Record Business Writer//May 4, 2011

Second try at finding Baltimore casino developer moving forward

By Nicholas Sohr

//Daily Record Business Writer

//May 4, 2011

The state’s second attempt to find a developer to build a casino in Baltimore will move forward after the disqualified winner of the first attempt dropped his request on Wednesday that the courts put the process on ice.

The move came 30 months to the day after Maryland voters approved slot machine gaming and sets a July 28 deadline for proposals for the city casino site. State officials had worried that a successful bid for an injunction could set the process back by more than a year.

“This will move us along without further delay, and that’s very positive for the city and the state,” said Donald C. Fry, chairman of the Video Lottery Facility Location Commission, which vets casino proposals.

A 134-page request for proposals was published Friday, and Fry said he’s heard from between four and six interested parties.

“We’re confident there will be multiple bidders this time,” he said. “The economy is a little bit better, and there’s a little more certainty to the process.”

The Baltimore slots license, however, is not without its legal challenges.

Baltimore City Entertainment Group and state lawyers will meet in Baltimore City Circuit Court on May 25. BCEG, led by Canadian homebuilder Michael Moldenhauer, was the only bidder that sought the lone city slots license in February 2009. After months of delays in submitting a full proposal a $22.5 million license fee to the commission — BCEG only sent in $3 million, enough for 500 machines — the commission tossed the BCEG bid in December of that year.

BCEG challenged the decision but was rebuffed by the Maryland State Board of Contract Appeals a year later. An appeal of that ruling will by heard May 25.

John F. Dougherty, a lawyer with Kramon & Graham PA representing BCEG, said the group wants the judge to require the slots commission to reopen its review of the BCEG proposal, and request an amended version that would bump it up to the full complement of 3,750 slot machines.

“BCEG was, and is, ready to do that,” Dougherty said. “Ready, willing and able.”

Moldenhauer said he could have a temporary casino up and running in six months “from the date of resolution” if the state grants him the license.

“Our interest is to build a casino,” he said.

Moldenhauer said he was unsure if he would submit another bid if he is unsuccessful in the appeals process.

“My interest is enforcing and executing the contracts we have already signed and spent a lot of money on,” he said.

BCEG had sought the injunction to allow its appeal to unfold, but the state and city argued against the delay. Attorney General Douglas F. Gansler wrote in a filing that BCEG did not meet any prerequisites for an injunction.

He argued the group, if successful in its injunctive efforts, should be forced to put up bonds to cover the $22.5 million license fee and $48.8 million in monthly revenue lost due to the search for a new developer being put on hold.

Dougherty said the bond issue did not factor into the decision to abandon the injunction.

In his court filing Wednesday, Dougherty wrote BCEG was heartened by concessions the Maryland State Lottery Agency and city made in responding to the request for an injunction. They indicate “its interests in pursuing its pending legal action for judicial review are sufficiently protected,” meaning BCEG, if successful in court, could have the ingredients for a successful casino project.

The lottery relinquished its claim to the $3 million license fee BCEG submitted, Dougherty wrote. And the city, in seeking to join the state in the proceedings, acknowledged that a separate lawsuit over the city-owned land available for the casino project is still unresolved, Dougherty continued.

BCEG and city officials reached a deal on a Russell Street location in October 2009, but after the commission threw out BCEG’s bid, the city voided the agreement. BCEG sued and a Baltimore judge, while siding with the city on several motions in February, allowed the case to proceed.


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