Penn National Gaming should get Philadelphia's remaining
casino license, a spokeswoman said, because its established Hollywood brand
would attract many customers, a promised improvement to I-76 would make its
Stadium District location even better, and its charity ownership model would
funnel money to Philadelphia schools and pensions.
Two of those reasons – experience and location – were also
given when PlanPhilly asked the “why you?” question to Penn National's
across-the-street competition, Live! Hotel & Casino. The team behind the
third stadium-area proposal, Casino Revolution, also claims its location is
best.
When asked in a recent interview why the experience points
should go to Penn National and its Hollywood Casino proposal rather than the
neighbors across the street, Vice President for Public Affairs Karen Bailey
said the Live team has experience, just not as much as Penn National.
“One gentlemen owns and operates one casino right now. He's
built others, doesn't operate them,” she said. “The other partner, obviously
has experience elsewhere in the country, but not the vast experience we do. We
have 26 facilities around the country and Canada.”
Bailey noted that Penn National, which is based in
Wyomissing, PA, opened three new casinos in 2012 alone, and a total of five
since 2008. This was done “while the economy was in a downturn, while the
industry was in a downturn,” she noted. “We obviously had the fiscal prudence
and ability to continue growing through that time period.”
Like the other two stadium-area proposals, Penn National
touts its location for being adjacent to both existing facilities that draw
millions of visitors per year, and major highways that make access for driving
customers easier than at the two Center City options, The Provence at Broad and
Callowhill and Market8 and 8th and Market.
But, Bailey says, Penn National is the only applicant that
has committed to making that highway access better. “We committed to building
direct, west-bound access onto I-76, so that our customers aren't traveling on
Packer down to Broad to access I-76 down there,” she said. “That was a key
concern with the neighborhood groups in that area, and something we took very
seriously. We included that cost in our development costs. Others have said
they'll look at it, they'll consider it, they'll study it. We've said we'll
build it.”
Penn National would build the $480 million Hollywood Casino
in two phases. It would open between 18 and 24 months after the start of
construction with 2,050 slot machines, 66 table games and a 15-table poker
room. Amenities would include a sports pub, casual grill, four-outlet food
court, noodle bar and 180-seat entertainment lounge. Phase I would also include
a 3,500-car garage, the biggest garage of any proposal.
Phase II would include a 500-room hotel, 1,000 more slots,
40 more table games, 5 more poker games and more food, beverage and parking
options. Bailey notes that the economic projections Penn National gave the
state are based on Phase I only.
Critics have noted that the Hollywood proposal is the
smallest in scope and investment, Bailey said. “We believe we are the right
size for the market,” she said. “We know the market. We have a facility up the
road in Harrisburg. We brought to the gaming commission, to the community, what
we know will work, and what we can produce for the state and city.”
Bailey said that Penn National builds what it says it will
build, on time and on budget, and would rather under-promise than over-promise.
Local Penn National representative David Dunphy accompanied
Bailey on the interview and put a finer point on this statement. He said any
comparison between Hollywood and Live! Hotel and Casino should note differences
between Cordish's proposal for the nearby XFINITY Live! and what was built.
Cordish plans an expansion, some of which would depend on whether they and
Greenwood get the casino license.
A Philadelphia Hollywood Casino would share some key
characteristics with other Hollywoods across the country, but would definitely
have Philadelphia flavor, Bailey said.
Like all Hollywoods, the one proposed for South Philadelphia
would be done up in Art Deco style and harken to the Hollywood, California's
film industry Golden Age. At each gaming table, stylized trees would hold
electronic monitors in their branches, broadcasting sporting events on the
weekends.
“On opening day, guests can dine at our Final Cut
steakhouse, which has been winning awards all over the country,” Bailey said.
Wine Spectator recently gave its wine list an award. Final Cut, the food court,
sports bars and Asian dining options “are all products that we've tried and
tested across multiple regions across the country,” she said. “But we will
tailor them to what our customer base is.”
Final Cut chefs will use local ingredients and flavors on
the menu, for example, she said. The city's film history – and present – goes
well beyond Rocky, Dunphy said, and the Hollywood theme brings with it an
opportunity to highlight Philadelphia cinema.
The familiar amenities mean fans of Hollywood Casino's
elsewhere will recognize what they like in Philadelphia, Bailey said. And Penn
National would promote its new casino – and the city surrounding it – to the
millions of people in its data base.
Those who've earned Hollywoods loyalty rewards elsewhere in
the country could use them in Philadelphia, she said. And she anticipates that,
as the company does at its other locations, Hollywood will partner with local
businesses outside the casino, so that loyalty rewards can be used there as
well.
"We have players in multiple jurisdictions around the
country earning points on our system,” Bailey said. “People earning them around
the country can come to Philadelphia and use their points. Or, they can play at
Hollywood (here) and can earn points to visit in Las Vegas.
"We've got over 4 million people in our data base. Over
2 million of them live within a short flight or drive here to Philadelphia.”
Bailey said what sets the Hollywood proposal further apart
from its competition is a plan to share its profits.
Because Penn National already operates a Pennsylvania
casino, it could have no more than a one-third ownership stake in a new one.
(This is the reason Greenwood Gaming, which owns Parx, partnered with Cordish
on the Live! Hotel and Casino proposal.)
Penn National noticed in other jurisdictions where it has
bid for casinos that decision-makers always want to know who offers the most
benefit to the community in which they will operate. So to meet the ownership
rules and up the benefit, Penn National decided to create a charity as a
two-thirds partner.
All casinos give money to organizations in their
communities, but Bailey said Penn National has “guaranteed a minimum of $2
million per year until our debt service has been paid off for construction.
Then it jumps up to at least $15 million per year” for city schools and city
pension funds.
(When asked if Penn National had secured loans to build,
Bailey said, “We don't need them.” She said, “We have the ability to pay cash
for development if we so chose to. Or we can use a credit revolver, or we can
get outside financing.”)
The board of the proposed non-profit, the Philadelphia
Casino Benefit Corporation (PCBC), would be chaired by Joe Domenico, a gaming
executive with experience around the country. The board would consist of other
leading business people and philanthropists from the Philadelphia area.
Penn National made a similar proposal when it unsuccessfully
bid on a license in Maryland.
While Penn National says Hollywood's location is best, and
the two other South Philadelphia proposals agree that the stadium-area beats
Center City, a city economic analysis does not agree.
When presenting that analysis to the state gaming board last
fall, Deputy Mayor Alan Greenberger noted traffic concerns of neighbors –
something Bailey said the I-76 ramp improvement addresses.
Greenberger said the city also believes “choosing the
proposal that will generate the largest overall economic benefit to
Philadelphia over the long-term" makes the most sense, and the analysis
shows that's not Hollywood. "We project that this proposal will generate
the lowest number of direct and indirect jobs once the casino is constructed,
the lowest amount of total gaming and non-gaming revenue, and the lowest tax
revenue to both the City of Philadelphia and the Commonwealth of
Pennsylvania."
In the recent interview, Bailey said, “We thought it
interesting that there was such a differential in revenues between us and our
neighbor across the street.” Penn National doesn't agree with the city's
numbers, but it didn't formally respond to them. “We actually just stand by our
numbers,” she said. “We're confident in what we project, in what we create, in
what we put forward.”
Penn National and the other five applicants will have one
last shot to convince the Pennsylvania Gaming Control Board they are the right
choice for the license at suitability hearings next week. The board is expected
to make a decision sometime in the first part of 2014.
Source: PlanPhilly.com
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