Developers aiming to build a harness racing racetrack/casino in Lawrence County hope common sense will prevail.
Philadelphia produce wholesaler Joseph Procacci, 88, and New Castle native Joseph Canfora, who is CEO of Chicago-based Merit Management, have appealed what they are calling arbitrary deadlines imposed on Oct. 21 by Pennsylvania Harness Racing Commission chairman Jonathan Newman and asking for more time.
If the deadlines don't change, Procacci's attorney, John O'Riordan, said Procacci will have no choice but to pull out of the project.
While O'Riordan said he hopes Procacci will not abandon the project, he believes the timetable set by Newman includes impossible deadlines that ensure that this project "dies on the vine."
In October, Newman — the sole member of the harness commission — approved transferring 90 percent of the stock and the harness racing license from Endeka Entertainment stock holders to Procacci.
Newman also imposed a timeline to be met by the new developers and said if the deadlines are not met or if the Gaming Control Board denies a casino license, the harness license will be terminated and revoked.
"These deadlines totally ignore reality," O'Riordan said.
The schedule set by Newman requires:
•Providing to the harness racing commission by Jan. 21, 2016, proof that Endeka has the financing to construct the proposed racetrack. Phase I of the project currently under consideration will cost $200 million to $204 million.
•Provide architectural plans, blueprints and a construction timeline by April 2016.
•Commence construction no later than October 2016.
•Construction of the racetrack must be 50 percent completed by April 2017, and completed within two years of that agreement, with live racing by October 2017.
OTHER HANG-UPS
"The reality of the situation is the gaming license and harness license are joined at the hip," O'Riordan said. "No one's going to give us financing for a track without a gaming license. The harness commission is ignoring this. They expect us to get a track up and running even though no gaming license has been awarded."
Nor, he said, have the deadlines taken into consideration that appeals will inevitably be filed by competitors including The Meadows Racetrack and Casino in Washington County, Rivers Casino in Pittsburgh, Presque Isle Downs and Casino in Erie or other interests.
"This happens when a new licensee enters the market place," O'Riordan said. "It's more cost-effective for them to hire a lawyer and file an appeal than to lose money to competition."
He noted that appeals generally delay the project by 12 to 18 months while issues are resolved.
"It's a condition of the gaming board that we have a harness license," he added. "Right now, due to the unprecedented deadlines imposed for no logical reason, Joe Procacci's $50 million investment is at risk due to these untenable deadlines. This will kill the project unless common sense prevails."
An appeal asking Newman to reconsider his order was filed on Nov. 25, O'Riordan said. He said a response is expected within 30 days but noted the next meeting of the harness commission is Dec. 17 in Harrisburg.
"It could be addressed then or at any time," he said.
O'Riordan said he expects some action will be taken to resolve the matter in the next week or two.
"We believe (Newman) acted in haste," O'Riordan said. "We don't see how his deadlines benefit the interests of Lawrence County, Pennsylvania, or harness racing and they will kill the project."
Attempts by the News on Wednesday to reach Newman were unsuccessful.
PROJECT HISTORY
O'Riordan said he understands Newman's frustration with the project that has not moved in 12 years.
However, he said Procacci and Canfora joined the project in May. Penn National Gaming, the most recent would-be developer, abandoned the project in March, saying the local market is oversaturated with gaming facilities and a new racetrack/casino in Lawrence County would not be financially viable.
If the harness license is indeed revoked by the commission, O'Riordan said, "It will take five to seven years to work through the process and get back to the point we are now. And Lawrence County and the Commonwealth of Pennsylvania will lose millions of dollars.
"If they withdraw the license, the project will die. If they wanted to kill it, they should have done so long ago before Joe Procacci put his $50 million into the project."
Procacci this spring announced his commitment to spend $210 million to build Lawrence Downs Casino and Racing Resort to be located off Route 422 at Baird Road in Mahoning Township. Plans include a mile-long harness racing track, a 105,000-square-foot facility that will include 1,500 slot machines, 43 table games, 15 poker games, seats for 1,050 patrons and a simulcast theater to accommodate 150 patrons.
On Nov. 20, Endeka met the first deadline condition — by submitting financial disclosure documents to the gaming control board.
SENATORS' SUPPORT
In a letter dated Nov. 9, State Sen. Elder Vogel asked the commission to reconsider its order and work with Endeka to establish a reasonable deadline schedule "that would allow the project to stay on track."
Vogel's letter, also signed by Sens. Joe Scarnati, president Pro Tempore of the senate and majority leader Jake Corman, raised concerns on what he called "unobtainable deadlines" imposed by the racing commission, saying they "put the entire project in serious jeopardy."
"If this project falls apart as a result of the (harness commission order) the Commonwealth stands to lose hundreds of millions of dollars in potential tax revenues, including the $67.5 million license fee," the letter said.
"This outcome would also result in a loss of substantial tax revenues for Lawrence County and Mahoning Township and deprive the region of direct and indirect economic impacts of more than $100 million while putting at risk more than 1,000 good-paying construction, racetrack and casino jobs that would otherwise go to Pennsylvania residents."
The letter added that the project is important to the future growth of the county.
Lawrence County commissioner Dan Vogler on Wednesday said he hopes Endeka and the racing commission can resolve the deadline issues.
"Everyone knows what an important project this is for Lawrence County and Pennsylvania," he said.
"They have asked chairman Newman to modify his deadlines which they say are too ambitious, especially since they have not yet received the casino license from the gaming board," Vogler said.
By Nancy Lowry New Castle News
Reprinted with permission of New Castle News, New Castle, PA.