Was the Rivers Casino A Lemon of an Investment?

During an assessment hearing one of the Rivers Casino’s owners, seeking to have the facility’s assessment lowered, commented that the Casino has been a “terrible investment”.  He lamented that the Casino has not met initial revenue projections and will be adversely affected when casinos begin popping up in neighboring Ohio. However, despite its disappointing performance to date, the Rivers has enjoyed a pickup in revenue recently as have most of the other casinos across the Commonwealth. 

 

 

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Pittsburgh’s Casino Posts Strong Gains in 2011

To say that the Rivers Casino in Pittsburgh had a tumultuous start is an understatement.  As we have documented in previous Policy Briefs, since it won the gaming license for Pittsburgh the casino has undergone an ownership change, a reduction in its credit rating, and its revenues have come in been well below pre-opening projections.  But after beginning operations in mid-2009 and now having experienced two full years of slots operation–and one full year of table games– has Pittsburgh’s gaming parlor risen to its hoped for potential? 

 

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Numbers Improve at Rivers Casino

As the second full year of operations came to a close, the Rivers Casino received some good news in the form of an upgrade in its credit rating by Moody’s Investors Service.  An upcoming decision by Standard & Poor’s is also expected to raise the Casino’s credit rating.  While the rating improvement from Caa3 to Caa2 will help the Rivers’ cost of borrowing, Moody’s remains cautious about the Casino’s long-term future because of high debt levels.

 

 

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Moratorium Needed on Calls for a Moratorium

Allegheny County Council is on the verge of taking up legislation that would instruct the Council’s solicitor to ask the courts to halt the reassessment ordered by a local court and the Supreme Court until the state reforms assessment laws. The argument is that it is unfair to force Allegheny County to reassess when so many counties across the state are not under court ordered reassessments. According to their reasoning Allegheny County should be off the hook until the Legislature and the Governor rewrite state law to force all counties to bring their assessments up to date.

 

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Allegheny County Employment—20 Years of Falling Behind

Economic development in Allegheny County over the last few decades has been driven heavily by government subsidies and directives putting taxpayers-County, state and municipal-in the role of venture capitalists.  This approach has produced minimal benefits for the citizens of Allegheny County in terms of employment gains.  

 

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Pittsburgh Loses Again

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Pittsburgh has lost again, although this time it was not a sports contest.  The City lost an arbitration award to the labor union representing Public Works employees.  The grievance was over the awarding of overtime during the G-20 Summit held in the City in September 2009. As a result, the City must pay a total of $50,000 to 62 laborers. 

 

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Pittsburgh’s Financial Watchdogs Lose Their Bark

Pittsburgh City Council recently enacted a prevailing wage bill and is now considering a living wage bill.  Both measures will almost certainly increase City spending either directly, by raising the wage rates of its employees, or indirectly, as contractors push the costs back to the City through higher bids.  The question that cries out for an answer is; where are the Act 47 coordinator and the Intergovernmental Cooperation Authority (the oversight board)? Why are they silent about these legislative efforts?

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Pittsburgh’s Apologists Return with Bad Policy Suggestions

In 2003 a duo of the City’s elite chaired a task force known as the Hillman/Roderick Committee to study Pittsburgh’s financial problems and to recommend solutions. Of course, this was before the City formally entered Act 47 distressed status or was under the watch of a state appointed oversight board.  The task force identified the usual fiscal maladies-stagnant revenues and too much spending.  They recommended substantial tax increases and spending cuts and the creation of a state-appointed review board.

 

 

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Return of the Living Wage

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Pittsburgh City Council’s attempt to install a prevailing wage for employees at City-subsidized development projects has emboldened one Council member to take it a step further and revisit the idea of the living wage.  At a time when the nation is in recession,  the City and area are losing jobs, and governments at all levels are struggling to balance their budgets, resurrecting the living wage could not be more ill-conceived. Although hearings on the bill have been postponed for the moment, it will almost certainly be on Council’s agenda soon.

 

 

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Pittsburgh’s Worsening Policy Spiral

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Pittsburgh’s City Council is holding debates over proposed prevailing wage legislation.  The legislation requires that any tenant of a subsidized development “would have to pay hotel, cafeteria, grocery, and building service workers prevailing wages, based on the averages paid to their peers in the city”.  This language is accompanied by feel good rhetoric and, not surprisingly, is heavily supported by the local labor unions. The proposed ordinance is sponsored by seven of the nine council members.  This latest market interfering bill is opposed by the mayor and developers who argue strenuously that development in the City will come to a virtual standstill if the mandate is enacted. 

 

 

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