Monday, March 05, 2007
Untangling the Arena Mess
The Penguins have declared an impasse in arena negotiations with government officials. The team is apparently concerned because the appeals filed on the Pittsburgh slots license winner will delay the construction of the arena. They will now “aggressively explore relocation.” Sounds disingenuous. If the Isle of Capri had won the license, the appeals would be going just as they are now with the Majestic Star license.
This whole mess could have been avoided had the state held an auction for this, as well as the other slots licenses. The process could have been simple—the highest bidder wins. Instead, we had a convoluted process that ran on for three years and cost taxpayers millions of dollars as the gaming control board rode around the state listening to proposals and projects that promised the sun, stars, moon, and a new hockey arena.
The process could have been much simpler with the gaming control board, with help from city and county leaders, identifying the best location for a slots parlor. Once the location was selected, an auction for the license would have been held with pre-qualified bidders capable of paying at least $300 million. Considering that the total non-casino development packages from the three applicants were all in excess of $300 million, this would have been a more than fair requirement. Remember that Isle of Capri offered $290 million just for a new arena and that’s over and above the $50 million the state wanted for a license.
Bidding could have started at $100 million, and proceeded from there. Once the license was sold to the highest bidder in an open, public forum, the issue would have been resolved. All this could have been completed by mid 2005 and a casino might have been up and running by late 2006.
Pennsylvania could have taken its $50 million from the auction proceeds and turned over the rest--possibly as much as $300 million--to Allegheny County to be used for local tax relief.
Had this process been followed as opposed to the long, arduous process that was actually used, governments (state, county, and local) would have their money in hand. Projects such as a new arena could have been started or not based on their own merits and ability to fund themselves.
Instead, we have a mess. Still no final award of a license, millions spent and the entangled mess of a possible new arena tied up with the casino debacle. These are two things that would have never been directly linked in an auctioned license award procedure.
This whole mess could have been avoided had the state held an auction for this, as well as the other slots licenses. The process could have been simple—the highest bidder wins. Instead, we had a convoluted process that ran on for three years and cost taxpayers millions of dollars as the gaming control board rode around the state listening to proposals and projects that promised the sun, stars, moon, and a new hockey arena.
The process could have been much simpler with the gaming control board, with help from city and county leaders, identifying the best location for a slots parlor. Once the location was selected, an auction for the license would have been held with pre-qualified bidders capable of paying at least $300 million. Considering that the total non-casino development packages from the three applicants were all in excess of $300 million, this would have been a more than fair requirement. Remember that Isle of Capri offered $290 million just for a new arena and that’s over and above the $50 million the state wanted for a license.
Bidding could have started at $100 million, and proceeded from there. Once the license was sold to the highest bidder in an open, public forum, the issue would have been resolved. All this could have been completed by mid 2005 and a casino might have been up and running by late 2006.
Pennsylvania could have taken its $50 million from the auction proceeds and turned over the rest--possibly as much as $300 million--to Allegheny County to be used for local tax relief.
Had this process been followed as opposed to the long, arduous process that was actually used, governments (state, county, and local) would have their money in hand. Projects such as a new arena could have been started or not based on their own merits and ability to fund themselves.
Instead, we have a mess. Still no final award of a license, millions spent and the entangled mess of a possible new arena tied up with the casino debacle. These are two things that would have never been directly linked in an auctioned license award procedure.
