|By Mike Wereschagin, The Pittsburgh
Tribune-ReviewMcClatchy-Tribune Regional News
Aug. 19, 2008 - Pittsburgh's new casino owners have finalized the $780 million financing package needed to build the North Shore facility, a spokesman for the owners said this morning.
Work at the site already is picking up as contractors, who are owed more than $50 million for work done from April to June, prepare to resume construction.
"With the closing of the financing, we are excited to re-start construction immediately and build and operate a world class facility of which Pittsburghers can be proud," said Greg Carlin, CEO of the company that will run the casino, Holdings Aquisition.
The casino is scheduled to open in August 2009 and is expected to be the state's most profitable.
In its first five years of operation, it is expected to generate about $1.1 billion in tax money for the state and about $98 million for Pittsburgh and Allegheny County. During its first three years, casino owners will give $3 million each to Hill District and North Side economic development efforts. They also will pay $225 million over 30 years toward a new Penguins arena, the groundbreaking for which took place Thursday.
The state Gaming Control Board approved Bluhm's takeover of the project after former owner Don Barden ran out of money. Barden could not close the deal on the complex financing package, in part because of worries about the global credit market. The latest economic downturn has hit casinos, once thought to be recession-proof. At least three casinos across the country -- none in Pennsylvania -- have filed for bankruptcy.
Analysts and others also raised concerns about Barden's decision to pay for the project almost entirely through loans.
Bluhm's group, by contrast, is putting up $205 million. More than $550 million is coming from lenders such as the international bank Credit Suisse and a domestic bank's loan guaranteed by two Detroit municipal pension funds. The rest is coming from other investors, including Philadelphia real estate investor Ira Lubert. Barden and his original team of investors will split a 20 percent stake in the project.
The gambling board gave Bluhm's group five business days to close the deal, and it appears they have done so with about three days to spare.
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