Proposed Philly Casino Promises Money for Schools and Pensions

A proposed casino in Philadelphia promises to help fund the schools and the pensions of city employees.

Rendering of the Hollywood Casino.

This is your first of three free stories this month. Become a free or sustaining member to read unlimited articles, webinars and ebooks.

Become A Member

Six applicants vying for Philadelphia’s second casino license pitched their ideas to the Pennsylvania Gaming Control Board on Tuesday. The applicants range from a local produce supplier to casino magnate Steve Wynn, and their proposals are just as varied in quality.

But perhaps the most unorthodox idea is the Hollywood Casino Philadelphia, which promises to contribute to the underfunded pensions of the city’s municipal employees and its cash-strapped school district.

One of three casinos proposed for the vicinity of the South Philly Sports Complex, the Hollywood idea originated from Rep. Bob Brady, who suggested that Philadelphia take advantage of the available license with a city-run casino.

Due to the possible legal issues of city-run casino, the plan never fully materialized. But the Hollywood would be a joint venture between Penn National Gaming, Inc., which owns 29 gaming facilities throughout the country, and the newly created non-profit Philadelphia Casino Benefit Corp. (PCBC).

This ownership structure would be a first for urban casinos. According to Steven Snyder, senior vice president of corporate development at Penn National, the project would fall under the umbrella name Pennsylvania Gaming Ventures LLC, which right now solely consists of Joe Domenico, a 31-year veteran of Caesars Entertainment.

Penn National would retain one-third equity interests in the property, with the remaining two-thirds ownership belonging to PCBC, said Domenico. It would also provide the construction and financing and act as managing member, landlord, lender, developer and operator.

A board managing the PCBC would be responsible for making sure that money actually makes it to city employee pensions and the school district. Domenico said that the money will be distributed equally between pensions and schools. He didn’t say from where he would select board members, but Penn National will have one designated representative on the board.

Floor plans of the proposed Hollywood Casino.

Snyder said that the partnership is necessary under a 2004 Pennsylvania law known as the Race Track Act, which allows Penn National to own no more than 30 percent of any casino project due to its other gaming properties in Pennsylvania. (Penn National owns three off-track wagering sites and a similarly named casino in Grantsville, Pa.)

In their presentation before the Gaming Control Board, Penn National quoted City Controller Alan Butkovitz as saying, “under the proposal submitted by Penn Gaming, the casino would generate almost $115 million over a 15-year period in distribution of fund projections to PCBC.”

“The project presented an opportunity for the city and was worth consideration,” Butkovitz told the Philadelphia Inquirer after conducting an independent assessment of the proposal.

But according to the Inquirer, Butkovitz “raised questions about the profit projections” and recommended safeguards to make sure enough money makes it to city pensions and schools.

Although Snyder suggests up to $10 million a year could be distributed to the city institutions, Penn National promises that no less than $2 million annually will be dolled out.

The School District of Philadelphia is set to close 37 schools over the summer in an attempt to save an estimated $28 million a year. And Philly has about $4.7 billion worth of pension money going unfunded, a number that could rise to $5.25 billion by 2017, according to a September 2012 report from the Center on Regional Politics.

Casino construction wouldn’t begin until 2015 because the land is leased to another company.

Like what you’re reading? Get a browser notification whenever we post a new story. You’re signed-up for browser notifications of new stories. No longer want to be notified? Unsubscribe.

Tags: philadelphiaeconomic developmentbudgetspensionscasinos

×
Next City App Never Miss A StoryDownload our app ×
×

You've reached your monthly limit of three free stories.

This is not a paywall. Become a free or sustaining member to continue reading.

  • Read unlimited stories each month
  • Our email newsletter
  • Webinars and ebooks in one click
  • Our Solutions of the Year magazine
  • Support solutions journalism and preserve access to all readers who work to liberate cities

Join 1096 other sustainers such as:

  • Anonymous in Grand Rapids, MI at $10/Month
  • Mike in Roseville, CA at $10.00/Month
  • Davis at $10/Month

Already a member? Log in here. U.S. donations are tax-deductible minus the value of thank-you gifts. Questions? Learn more about our membership options.

or pay by credit card:

All members are automatically signed-up to our email newsletter. You can unsubscribe with one-click at any time.

  • Donate $20 or $5/Month

    20th Anniversary Solutions of the Year magazine

has donated ! Thank you 🎉
Donate
×