Pittsburgh Casino Builder Barden Asks for Reprieves From Board

Barden told the board that costs have grown from an estimate of $450 million to $770 million, due to delays and financing difficulties.

Don Barden, the Detroit entrepreneur who won the hotly-contested rights to build a stand-alone casino in Pittsburgh, has told the Pennsylvania Gaming Control Board that factors beyond his influence have forced him to ask for approval of changes to his initial agreement and plans.

Barden claims a conspiracy among  failed bidders for the casino, along with a slate of other unforeseen problems, has caused delays and expense runups that have made him ask the board for approval to amend his contract.

Barden assured the board members his Majestic Star Casino would still open by May 2009, but requested that he be allowed to postpone construction of an outdoor amphitheater, ballroom and banquet space and some parking spaces.

Forest City Enterprises and Isle of Capri Casinos were the losing bidders; both had filed losing appeals over the board's decision to favor Barden. The Majestic Star also has faced lawsuits by the Steelers football team and Pirates baseball team over possible traffic problems caused by the casino's location, although the relevance of traffic to sparsely-attended Pirates games seems unlikely.

Barden told the board that costs have grown from an estimate of $450 million to $770 million, due to delays and financing difficulties. A bridge loan of $200 million Barden took to begin construction of the casino is due next month, and Barden must either pay, negotiate an extension, or face foreclosure.

Barden also asked to be absolved of a $3 million commitment he made to assist community development, a promise he said was made on the basis of his company receiving development rights to a new arena, rights that were instead awarded to the Penguins hockey franchise.

However, board members noted there was no tie-in between the arena and the community funds at the time the license was sold to Barden, and that the community promise figured in the decision to favor Barden. Also cited was Barden's shift in financing from Jeffries Ltd to Credit Suisse; Jeffries' participation was another factor in Barden's approval.

This could result in an embarrassment for Pittsburgh, as it appears Barden is having great difficulty following through on the promises he made to the Gaming Board. As if taking on the board and a pack of competitors wasn't enough, one thing sure to turn Pittsburgh residents against Barden would be more squabbles with their beloved Steelers and Penguins.