Victory for SugarHouse Casino owners

August 22, 2008 5:40:02 PM PDT
SugarHouse Casino won a major decision from Pennsylvania's highest court, which said Friday that Philadelphia's mayor cannot revoke a license to build on submerged riverfront lands that his predecessor legally granted. The 4-2 decision was the latest battle to be settled by the state Supreme Court between the owners of two planned casinos along the Delaware River and Mayor Michael Nutter, who has fought to get the casinos to build elsewhere in the city.

Already, the court has ordered the city to issue building permits to both casinos, saying the state's slot-machine gambling law does not allow the city to block casino licensees.

Even with the decision, SugarHouse still faces hurdles before it can build: The Army Corps of Engineers is reviewing the 22-acre site to determine whether there are centuries-old artifacts from settlers and Indians that must be preserved ahead of construction.

SugarHouse's owners, led by Chicago billionaire developer Neil G. Bluhm, argued that Philadelphia properly issued the building license under a 1907 law that lets the city develop its own waterfront.

But city lawyers, backed by state lawmakers, countered that only the state can grant such a license to build on the submerged lands since at least 1978, when a state dam safety law took effect.

"We recognize that there has been a change in the executive office in Philadelphia; but the view of the current director of commerce for the city does not affect or undermine the legitimate exercise of the authority reposed in the former director of commerce," Chief Justice Ronald D. Castille wrote in the court's majority opinion.

On Nov. 27, former Mayor John F. Street's commerce director authorized a permit for the $700 million SugarHouse to build on the submerged lands. On Jan. 24, Nutter's acting commerce director mailed a notice of revocation.

Nutter's chief adviser on the issue, Terry Gillen, said the city would have to decide how to react next week after its lawyers read the opinion.

If the casinos open, Philadelphia would become the nation's largest city with casino gambling.

Meanwhile, SugarHouse is digging on other parts of their site to remove the foundations and debris from the sugar factory that once stood there, even as public officials urge it to build somewhere else.

Since the 1980s, the site has been abandoned and off-limits to the public. The casino plans include public access to the waterfront with a fan-shaped park, water taxi dock and marina fronting the Delaware.

Opponents, including city council members and neighborhood civic groups, say a riverfront casino is a poor choice to develop the Philadelphia's riverfront, and the resulting traffic, noise and crime will destroy the property values and quality of life in nearby neighborhoods.

On Thursday, Gov. Ed Rendell and Nutter met with representatives of Philadelphia's other planned casino, Foxwoods Casino Philadelphia, to discuss alternative sites. Foxwoods' representatives said they would at least consider other locations, and city officials said they hope to meet with SugarHouse officials after Labor Day.

However, shifting construction to another site would force SugarHouse to seek approval from state gambling regulators - a time-consuming and expensive prospect for the casino's investors.

In 2004, Rendell signed a bill legalizing slot machines at 14 sites across the state, including two freestanding casinos in Philadelphia, as a way to generate money to cut taxes.

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