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New financial incentives offered for Baltimore gaming license

Baltimore City offered would-be casino developers new financial incentives to bid on the city’s lone gaming license on Wednesday.

The changes approved by the Board of Estimates include the diversion of up to $6 million in slot machine tax revenue to reimburse the developer for infrastructure improvements and a delay in payments due to the city.

“The bottom line we heard pretty loud and clear … is that the critical time in any of these developments were the first few years,” said Kimberly Clark, executive vice president of Baltimore Development Corp., the city’s quasi-public economic development arm.

Clark said the changes to the city’s minimum set of requirements for developers were made after meetings with groups “we believe represent five different” parties interested in the city slots license.

Proposals are due Sept. 23.

The $6 million would be taken from the city’s share of “local impact grant” funding — 5.5 percent of slots revenue is used to mitigate the effects of casinos on the jurisdictions that host them.

The grants are made by local development councils and can be used for sanitation, public safety, economic and community development, housing and infrastructure improvements.

Each of the five areas of the state with casinos is allocated local impact revenues based on their casino’s share of total gaming tax revenue. Through July, the Hollywood Casino Perryville and the Casino at Ocean Downs have yielded $6.5 million for local impact grants in Cecil and Worcester counties.

The eventual winner of Baltimore’s lone gaming license will also get a break on the land around the casino.

The city is offering up about 16 acres for the casino project, most of it on Russell and Warner streets south of M&T Bank Stadium. The developer will have to lease the land the casino sits on from the city and buy up front the land for the casino’s parking garage for at least $1 million an acre.

The developer will also have to buy the rest of the land with the same price floor, but will not have to pay for two years after the casino opens. That land would be used for “ancillary” entertainment venues.

Baltimore’s casino will pay 2.99 percent of its gaming revenues as ground rent — the minimum payment will be $14 million by its fifth year in operation — and another $3.2 million in real estate taxes.

As part of the changes, the city also made it easier for the state to modify its request for proposals by stripping out the city’s minority- and women-owned business requirements in favor of what the state includes in its RFP.

The Video Lottery Facility Location Commission is meeting Wednesday to consider amendments of its own that have been prompted by questions from potential bidders and a federal civil rights suit.

Baltimore City Entertainment Group filed the suit July 5. In it, BCEG alleges the state’s MBE requirements for casino developers unfairly discriminate against white men.

Baltimore’s casino would be the second-largest in the state with 3,750 slot machines. The winning developer will have to pay a $22.5 million license fee for the right to run that full allotment of slots.