Making the News

Pittsburgh Tribune-Review

Originally Published:Tuesday, July 28, 2009
http://www.pittsburghlive.com/x/pittsburghtrib/news/regional/s_635612.html

Lawrence County hopes for miracle on stalled Valley View Downs

By Mike Wereschagin
Pittsburgh Tribune-Review

The tree-lined road in front of Eugene and Peggy Johnson's house in rural Lawrence County is quiet.

A little too quiet for them.

"We need jobs in this county," said Eugene Johnson, 70.

Like most others in Mahoning Township, Johnson holds out hope that jobs will come with construction of Valley View Downs, a casino and horse-racing track planned for the 250-acre field abutting Johnson's property.

Developers promised jobs, tax relief and economic rebirth for the region, but the project stalled last summer when $455 million in financing collapsed with the rest of the economy.

It's been a rough year since then. Lawrence County's unemployment rate rose from 5.6 percent in May 2008 to 9.2 percent a year later. Lawmakers in nearby Ohio, where Valley View Downs would get most of its customers, legalized video slots at tracks in response to a budget crisis. And major lenders became wary of casino ventures as they watched the fortunes of Las Vegas and Atlantic City plummet.

"Starting a casino project right now is tough sledding, strictly because of the ability - or lack thereof - to get capital," said Joseph Weinert, vice president of Spectrum Gaming Group, a gambling consultant. Ohio's legalized slots are another strike against the project. "Gov. (Ted) Strickland's pronouncement that he would legalize slots at seven tracks can't be helpful to Valley View Downs."

According to the Bureau of Labor Statistics, 1,666 people joined the unemployment rolls in Lawrence County in the past year. Building the racetrack-casino would create 1,600 construction jobs, and 1,500 full-time jobs would be created when the casino opens, according to developer Centaur Inc.

"It couldn't have come at a worse time," said county Commissioner Dan Vogler. "There's not a lot of construction going on right now."

Without new construction, the property tax base remains stagnant. Commissioners likely will have to raise taxes next year - the first time in five years - to close a budget deficit projected to be at least $500,000, Vogler said. The casino would pay the county as much as $8.3 million a year through a 2 percent host fee, according to a Centaur-funded economic analysis by Cummings Associates.

Local residents are caught between two state bureaucracies. In 2007, the state Horse Racing Commission had one more harness-racing license to hand out, and the state Gaming Control Board had one more slots license for a harness-racing track. The commission picked Centaur. The board said it needed to gather more information.

In May 2008, the complex financing deal for Valley View Downs was about to expire. The deal depended on Centaur getting the last slots license. Without it, financier Credit Suisse said, the company wouldn't get the money.

The board, however, wanted Centaur to get the money before it would award the license. Former Pittsburgh casino owner Don Barden had just run out of money, jeopardizing one of the state's largest casino projects and prompting accusations that the board failed to properly investigate him. Board members approached the Valley View Downs deal cautiously.

Credit Suisse's June deadline passed, Centaur still didn't have its license, and $455 million evaporated. The slots license, however, can't go to anyone else.

"There's no other applicant for this, and there can't be any other applicants for this as long as they hold the last horse-racing license in the state," board spokesman Doug Harbach said.

Lawrence County waits for the economic miracle that once seemed a sure thing.

"People here are still hopeful. I have never talked to anyone who rejoiced because (Centaur) had anything stalled," said the Rev. James Downs of Christ the King Parish in Lawrence County. Downs was among dozens of local supporters of the project who packed a May 2008 Gaming Control Board hearing.

The Horse Racing Commission gave Centaur until September 2010 to get enough money for the project. Centaur executives spent much of the past year trying to cobble together the cash, said spokeswoman Susan Kilkenny.

"Countless hours and millions of dollars have been invested to date, and our unwavering focus continues," Kilkenny said. The plan to legalize slots in Ohio doesn't change things, she said.

The Valley View Downs site is about 12 miles from Youngstown. The nearest racetrack in Ohio is 57 miles from Youngstown, outside Cleveland. But Ohio voters there will decide in November whether to legalize full casinos in Cincinnati, Cleveland, Columbus and Toledo. Similar ballot measures failed several times, most recently in 2008.

"There are a lot of balls up in the air right now concerning how Valley View Downs fits into the competitive landscape," Weinert said.

The Rivers Casino, set to open next month on Pittsburgh's North Shore, is one of them. If the casino does well, it could help Centaur attract investors, Weinert said.

"We wish The Rivers much success," Kilkenny said.

The project would be the only one-mile harness-racing track in Pennsylvania, and would host 1,500 races a year during 150 race days. The site used to be a strip mine, Eugene Johnson said, so the tourists it could bring would be a welcome replacement to the rumbling dump trucks of years past and the recessive silence since.

Jean Simpson's husband, Paul, won't even talk about it. He doesn't want to jinx anything, she said.

"It would be great - for property values, for the community," said Jean Simpson, 73, who lives on four acres next to the casino site, a picturesque field of grass and wildflowers. "I think this area needs some boosting."

After a year without seeing any movement on the project, local residents still pin their hopes to it, Vogler said.

"When I go to the grocery store, when I go to the post office, when I go to church, that is usually the No. 1 question: 'What's happening with the casino?' 'What's happening with Centaur?'" Vogler said. "We're treading water at this point."

 

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