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Philly’s Big Traffic Gamble

Mon April 16, 2007 - Northeast Edition
Mary Reed

The Pennsylvania Gaming Control Board (PGCB) presented early holiday gifts on Dec. 20, 2006, when it granted 11 casino operators licenses to open the first casinos permitted in the Commonwealth under the 2004 Race Horse Development and Gaming Act.

Under this Act two casinos are required to be constructed in Philadelphia, with the rest at various locations around the Commonwealth.

One of the major problems to be solved in Philadelphia will be handling the enormous amount of additional traffic generated by visitors to SugarHouse Casino and the Foxwoods Casino Philadelphia.

SugarHouse Casino

The SugarHouse Casino is a $550 million project and will be built by HSP Gaming LP (HSPG LP). Investors include Chicago developer Neil Bluhm; Greg Carlin, gaming industry veteran; Dan Keating, CEO of Keating Group; Dick Sprague, founder of Sprague & Sprague; former Pennsylvania Supreme Court Justice William H. Lamb; Robert Potamkin, co-chair of the Potamkin Companies; and Jerry Johnson, chairman of the Radnor Trust.

Expected to open for business in April 2008, the 1.3- million-sq.-ft. casino will be built on the former Jack Frost sugar refinery site covering 22.6 acres (9.1 ha) on the Delaware riverfront in Philadelphia, close to the Girard Avenue exit of I-95.

It will cost $545 million and offer 3,000 slot machines as well as dining facilities, an event center, and on-site parking for 3,000 customer and employee vehicles.

Plans for later expansion include adding additional slots, a hotel, more parking, and a spa.

The Pennsylvania Department of Transportation (PennDOT) will be widening and rebuilding parts of I-95 between Vine and Ann streets as well as redesigning the Girard Avenue interchange — a Philadelphia project planned years before gambling became legal in Pennsylvania — which will remove some SugarHouse-bound traffic from side streets.

Foxwoods Casino Philadelphia

Foxwoods Casino Philadelphia will be constructed on 16.5 acres in south Philadelphia, along the Delaware River at Piers 60, 62, and 63. Public access to the river, which does not currently exist, will be provided. The site is close to the Convention Center, entertainment venues, hotels, and is located in a commercial district with major shopping destinations such as IKEA, Home Depot and Wal-Mart.

Foxwoods’ project is a joint venture of Foxwoods Development Company LLC (FDC LLC) and Washington Philadelphia Investors LP, (WPPI LP) operating together as Philadelphia Entertainment and Development Partners (PEDP). Partners in Washington Philadelphia Investors LP include world-famous musician Quincy Jones; Garry Maddox, former centerfielder of the Philadelphia Phillies baseball team; and Dawn Staley of Temple University.

Foxwoods Development Company LLC is a development company wholly owned by the Mashantucket Pequot Tribal Nation. It operates the Foxwoods Resort Casino, opened in 1992 on the Nation’s homelands in southeastern Connecticut as the world’s largest casino. FDC LLC will own 30 percent of the PEDP and oversee the operations at the Foxwoods Casino Philadelphia.

This casino will be the Nation’s first off-reservation gaming venture, and is viewed as an opportunity for it to diversify its holdings, according to FDC’s Chief Development Officer Gary Armentrout.

Foxwoods Casino Philadelphia is a $986 million project and will be constructed in three phases.

Phase I will provide 3,000 slot machines, an entertainment lounge, retail shops, restaurants, and bars, plus a garage with 4,200 parking spaces. The cost will be $560 million, which includes purchase of land and license fees.

The casino anticipates opening this first phase in November 2008.

Phase II will add further dining and retail venues, 2,000 more slot machines when authorized by the Commonwealth, and 1,200 extra parking spaces. In addition, there will be development of the riverfront area by adding night clubs and other entertainment facilities. This phase carries a price tag of $223 million.

Phase III will cost $203 million, covering construction of a hotel, spa and conferences facilities. It also may include building a number of condominiums.

Significant Traffic Congestion

Although the casinos will open for business in a gradual fashion, casino visitors and construction vehicles in conjunction with existing shopper, trucking, commercial, and port traffic will create more congestion on highways that are already highly congested. This is particularly the case on those sections of I-95 within the city, currently traveled by approximately 90,000 vehicles daily in each direction

The Delaware Valley Regional Planning Commission (DVRPC) issued a study of the situation before casino licenses were granted, examining each proposed site in turn for their impact upon the community. Their study concluded construction of the four casinos in the Greater Philadelphia area would increase local and regional congestion, with resulting increased delays and extension of the lengths of peak travel periods.

This situation also would add to safety risks unless measures were taken to mitigate impact upon the community. The DVRPC study further concluded the presence of the casinos would generate adjoining development, adding to vehicular traffic.

The matter of signage was addressed by the Commission, which expressed concern that the landscape would be strongly impacted by advertising billboards and directional and other signs, particularly along I-95, which has been aptly dubbed “casino corridor.”

Another necessity is provision of adequate parking, which the Commission viewed as a priority given its lack will exacerbate existing conditions.

In addition, Barry Seymour, DVRPC executive director, warned that care must be taken to decrease any negative impact upon residential neighborhoods near the casino sites, adding “Local transportation improvements are essential, and the city must now work with the casinos and community groups to protect and improve quality-of-life in the affected neighborhoods.”

When the DVPC study was issued, casino sites had already been approved at Harrah’s Chester Casino and Racetrack, expected to generate more than 18,000 trips a day, and the Philadelphia Park Casino and Racetrack, with an estimated 14,000 vehicles on weekdays and 19,000 during the weekends.

In connection with the two proposed casino sites in the city, the DVRPC study recommendations included:

• Improve signal timing on, and access to, Columbus Boulevard,

• Reconfigure intersections,

• Improve public transit services and expand pedestrian and bicycle facilities, and

• Undertake a regional transportation study when casino locations were known

Casino Offers to Foot Traffic Mitigation Costs

A study submitted by Foxwoods Casino Philadelphia to the Pennsylvania Gaming Control Board (PGCB) in 2006 laid out traffic mitigation plans costing approximately $5 million for Phase I of its construction plans, which would be paid by the casino.

The Foxwoods plan stated the casino proposes “to accept ’ownership’ of the existing traffic situation” as well as for impact associated with development along and near Columbus Boulevard and traffic generated by the casino itself.

While Foxwoods anticipates highway improvements around its site will have been completed before its casino opens, a note of caution has been sounded. If its plan is approved, it could be delayed, not only because of the necessary planning process and required public hearings but also possible law suits.

Proposed construction of a ramp would need a long review time. However, Phase I of the casino would not be affected by this delay, and Foxwoods believes if it begins the process of seeking approval for such a ramp now, it would be ready for the planned opening of Phase II of the casino in 2010.

While Foxwoods has agreed to pay for Phase I improvements to South Columbus Boulevard, the ramp is for Phase II. The casino will contribute its fair share to the cost of this ramp, augmenting monies it understands will be available on the state, federal, and local levels to help fund these improvements, which are needed whether the casino is built or not.

The casino’s study calculates that on Friday and Saturday, the two busiest weekdays, during Phase I Columbus Boulevard will be used by 20,000 visitors and employees in addition to the usual traffic, rising to 28,500 on Saturdays. During Phase II these figures will increase to 26,000 and 39,900 respectively, although Phase III is not expected to add significantly to congestion in the area.

The casino’s plans advance a number of measures for traffic mitigation, including:

• Re-establish and update a coordinated traffic signal system on Columbus Boulevard,

• Reconstruct, widen, or restripe thoroughfares intersections along South Columbus Boulevard to provide additional traffic lanes at appropriate points on Columbus Boulevard and nearby streets,

• Add a signalized intersection at Morris Street and Columbus Boulevard,

• Construct a new southbound off-ramp from I-95 taking visitors directly to the casino site,

• Provide changeable signage to point vehicles to the least congested route as well as sufficient parking and queuing areas to prevent traffic backing up into Columbus Boulevard and off-site parking for employees, from which they will be shuttled to work,

• Cooperate with Philadelphia’s mass transit system in bringing patrons to the casino, perhaps by increasing current service and providing new routes.

• Similar cooperation with tour bus companies, including provision of a passenger drop-off and pick-up facility at the casino,

• Provide water taxis to take visitors between the casino and entertainment venues at the other side of the river, which also would mean they could park away from the casino site, and

• Possibly using the railroad right of way along Columbus Boulevard for trolley or light rail services linking retail shops and entertainment venues along the Boulevard.

The study concluded that implementation of this program of improvements would mean that, compared to current traffic conditions, peak hour delays in the Columbus Boulevard corridor will be reduced by 32 percent on Fridays and 16 percent on Saturdays in 2008 during Phase I, and by 37 percent and 5 percent respectively in 2010 during Phase II.

The casino’s traffic mitigation plans have received support from the Chief Engineer and Surveyor of the city of Philadelphia as well as the consultant of the Pennsylvania Gaming Control Board.

Foxwoods also is committed to supporting a Special Services District within the community, which will address projects identified by residents as needing attention, and may include additional traffic mitigation measures.

City and State

Residents Benefit

Despite traffic mitigation and other problems needing to be resolved, city and state residents will benefit in more than one way from the presence of the two Philadelphia casinos.

They will provide a number of jobs in construction and eventually more than 2,000 permanent staff positions, and thousands of indirect jobs created by all the new spending in the area.

The Pennsylvania Gaming Control Board budget for the fiscal year 2007 to 2008 includes funding for another 67 employees to be hired during the next 18 months to assist in overseeing operations of the 11 casinos in Pennsylvania.

In addition, the arrival of casinos in the Commonwealth will mean a large infusion of funds into Pennsylvania’s coffers, not least the one-time $50 million license fee required of each casino and an annual casino tax of 54 percent on all gross revenue.

Gaming taxes paid by the casinos will generate huge sums, much of which will be returned to state residents in various ways. For example, it has been projected the SugarHouse Casino alone will pay approximately $1.2 billion in such taxes during its first five years of operation. Based upon this sum, $26 million to $36 million would go to the city of Philadelphia, while wage tax reductions are estimated to be 13 percent for city residents. $788 million would provide wage tax relief for residents of Philadelphia, the Pennsylvania Racehorse Development Fund would receive $170 million to $200 million, and $90 million to $115 million would be transferred to the state’s gaming and tourism development funds.

A number of Foxwoods Casino Philadelphia investors will contribute all or a significant proportion of their casino profits to charity.

Among them, Washington Partners Community Charities LP, an organization whose focus is on helping disadvantaged children in the Delaware Valley and southern New Jersey, has announced that all profits from its casino investment will be donated to various philanthropic causes. CEG

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