Panel rejects slots bid
Delays sink Baltimore project; license to be rebid in 2010
This story was corrected on Dec. 18, 2009. An explanation of the correction is at the bottom of the story
ANNAPOLIS Frustrated by continual delays in securing details and a license fee from a group seeking to bring 3,750 slot machines to Baltimore city, the state slots commission on Thursday rejected the group's bid and will reopen the bidding process in the new year.
Commission Chairman Donald C. Fry, reading from a statement after emerging from an hourlong closed session, said Baltimore City Entertainment Group LLC would be able to submit a new bid in 2010 when market forces might yield more competitive bids.
In the statement, Fry said that the commission had been "more than patient" with the group, which had missed several self-imposed deadlines for submitting an official proposal and an additional $19.5 million license fee after stating that it would expand its plans for the site from its initial proposal of 500 machines and move the site to near Camden Yards.
The commission was concerned that even though the move to Russell Street near the city's sports stadiums a few blocks from the original location provided a better location, it had not been properly advertised to potential bidders.
"The global recession and tightened financial/capital markets dampened competition for all of the video lottery facilities in Maryland, including Baltimore city," the statement said. "The commission believes that a re-bidding of the Baltimore city license in 2010 under more favorable economic conditions and a better understanding of the available [slots] facility sites, including the Russell Street location, could yield competitive proposals."
The commission voted 6-0 to reject the bid. Commissioner D. Bruce Poole, absent from Thursday's meeting, abstained from the vote.
After the vote, Fry ignored a request from representatives to address the panel before quickly adjourning the meeting. After the meeting, Michael Moldenhauer, a Canadian developer and majority partner in the Baltimore city group, said he had "no comment at the moment."
The commission will refund the $3 million licensing fee for the 500 machines that the group submitted in February.
Commissioners will have to meet with city representatives to discuss how and when to issue a new request for proposals, Fry said.
The closed session that preceded the vote came after more than a half-hour of grilling of Moldenhauer and Michael Cryor, the former chairman of the state Democratic Party and a member of the bidding group.
Efforts to get the casino up and running have been hampered by the legal requirement that the Baltimore site be located on city land, a provision that has led to extensive negotiations with the city government, Moldenhauer said.
"Our challenge has been that we needed to work through a municipal process that is exclusive to this jurisdiction," he said.
The city's Board of Estimates approved the land development and lease agreement and zoning in October.
Commission members took issue with the group members' contention that their bid was "on track" to be the first to open in Maryland.
"This project's nowhere near the track, and it is not traveling at a velocity capable of being the first project in place in Maryland," Commissioner Robert R. Neall said.
The commission has already awarded three licenses. One, to Penn National Gaming, is for 1,500 machines in Cecil County. A second is for 800 machines at Ocean Downs Racetrack in Berlin. Ocean Downs hoped to be up and running by Memorial Day, but a recent discovery of asbestos and structural issues during construction of a slots parlor under the track's grandstand will likely delay the opening.
The commission has approved a third in Anne Arundel County near the Arundel Mills Mall. The county council is expected to vote on necessary zoning changes for the parlor on Monday. A fifth approved site, Rocky Gap State Park in Allegany County, has yet to attract a bidder.
After missing self-imposed deadlines to submit plans and the fee in September and November and setting a new deadline for Dec. 10, the Baltimore city group instead sent a letter to the commission on Dec. 10 requesting a "reasonable extension" to finalize a deal with a new partner, York Capital Management.
The project had not moved forward "one millimeter" since an August meeting when the group informed the commission it would expand its proposal from 500 to 3,750 machines and said it would provide the additional license fee in September, Neall said.
This story originally said the commission had not awarded a license in Anne Arundel County. It should have said it has.