Tuesday, March 20, 2007

Have saw will travel..... and Inside the mind of the gaming control board

The ruling of the Pennsylvania Gaming Control Board (PGCB) is out and it gives some detailed explanation for their choice of Majestic Star over the other proposals. Most of it is unsurprising or pro-forma, but there are a few curious things hidden in there. All along, one of the main arguments for the Forest City/Station Square proposal was that it was going to be managed by Harrah's which had a reputation within the industry for high quality and successful casino operations. Buried in the report is the following footnote which says the PGCB didn't care at all about that at all:

Harrah’s Entertainment is not the “applicant” for this license nor does it have an ownership interest in Station Square gaming. Therefore, the success of Harrah’s Entertainment as a contractor are not a factor to be considered under Section 1325(c)(6). (footnote 9 page 68, or p. 72 of the PDF)

There are some other basic details worth thinking about. In particular the self-reported employment impact. Not to imply I trust the veracity of numbers self-reported by any of the applicants, but Majestic Star says building the casino will create 4,000 construction jobs. They don't say it but they must mean person-years of employment. That is obviously a ballpark guess, but given the scale of the project it is a decent enough number to start with. The important point is that Barden claims the casino will be built in a 14 month construction window. So those 4,000 jobs will all be concentrated over the course of a year or so. That means the project will have a much bigger impact on the local construction market than if it was spread out over 2 or more years.

Remember when two stadia were being built in town along with a few other big projects. There was a point where the local construction industry was highly strained. Just a quick list, but as I observe it at some point pretty soon there is going to be a number of big construction projects going on all at the same time: a fast-tracked casino will be labor intensive, the North Shore Connector ramping up (or down I suppose) construction, let's not forget the new arena, the PNC building downtown as well as ongoing construction of Children's hospital, and this new amphitheater on the North Shore (ok, that may not count as big like the other things but it adds up)... The list could go on with some other things we already anticipate, but the point is simple enough: can the local construction market handle all this activity at once? At the very least it is just another reason to doubt any fast-track scheduling for the casino construction. Anyone want to bet that there will be a headline at some point to the effect of: casino opening delayed by pace of construction, or lack of construction workers or structural steel means casino not to open until 09. You almost are in the situation of hoping for a national building recession which frees workers elsewhere who would be willing to come here for the season.


Blogger Matthew said...

Good points. And you beat the Post-Gazette by 5 days! See http://www.post-gazette.com/pg/07084/772362-85.stm

Sunday, March 25, 2007 12:26:00 AM  
Blogger C. Briem said...

not sure beat is the right verb, but it's a good thing Toland has some on record that construction issues shouldn't greatly affect schedules. We will see how that holds up.

Also note story in PG today on how casino delay is directly impacting city budget as well. Something also
discussed recently here.

Sunday, March 25, 2007 8:08:00 AM  

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