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Vol. 7 No. 8, August 2008, Dateline
Barden surrenders majority share in Pittsburgh
Facing an idle construction scene and gaming board scrutiny of his financing, Detroit developer Don Barden last month surrendered a 75 percent interest in his Majestic Star
casino project in Pittsburgh to Walton Street Capital Fund 6, an investment firm headed by Chicago billionaire Neil Bluhm, and a consortium of affiliated investors.
In a hearing before the Pennsylvania Gaming Control Board, Barden outlined the equity deal, which is being arranged as part of an agreement to secure the final $120 million in financing needed to complete the $780 million casino. Barden will retain a 25 percent stake in his company, PITG Gaming, but he will have the right to repurchase a larger stake in the future.
Bluhm, who also is the lead investor in Philadelphia’s stalled SugarHouse casino project, will personally own less than 1 percent of the Pittsburgh project—which satisfies a provision of Pennsylvania gaming law that prevents one casino owner from owning more than one third of a second gaming venture.
Barden’s commitments made when he was awarded the city’s sole slot license—in a surprising victory over deep-pocketed rivals Harrah’s and Isle of Capri—will be fulfilled under the new ownership, Bluhm has indicated. The casino will provide the $7.5 million over 30 years to help finance a new hockey arena for the Pittsburgh Penguins, and financial contributions will be made for inner-city development. A 1,000-seat outdoor amphitheater, boat docks and other improvements to the Ohio River waterfront, which Barden had sought to delay, also will go forward as originally planned.
casino project in Pittsburgh to Walton Street Capital Fund 6, an investment firm headed by Chicago billionaire Neil Bluhm, and a consortium of affiliated investors.
In a hearing before the Pennsylvania Gaming Control Board, Barden outlined the equity deal, which is being arranged as part of an agreement to secure the final $120 million in financing needed to complete the $780 million casino. Barden will retain a 25 percent stake in his company, PITG Gaming, but he will have the right to repurchase a larger stake in the future.
Bluhm, who also is the lead investor in Philadelphia’s stalled SugarHouse casino project, will personally own less than 1 percent of the Pittsburgh project—which satisfies a provision of Pennsylvania gaming law that prevents one casino owner from owning more than one third of a second gaming venture.
Barden’s commitments made when he was awarded the city’s sole slot license—in a surprising victory over deep-pocketed rivals Harrah’s and Isle of Capri—will be fulfilled under the new ownership, Bluhm has indicated. The casino will provide the $7.5 million over 30 years to help finance a new hockey arena for the Pittsburgh Penguins, and financial contributions will be made for inner-city development. A 1,000-seat outdoor amphitheater, boat docks and other improvements to the Ohio River waterfront, which Barden had sought to delay, also will go forward as originally planned.
Staff writers for Global Gaming Business magazine. Las Vegas, Nevada.
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