Baltimore developer The Cordish Co. is positioning itself to become an active player in the growing gambling business by taking on its first venture to build and manage a Las Vegas-style slot machine casino.
The developer, known for urban entertainment projects, has reached an agreement with the owner of Indiana Downs to develop and operate a $200 million casino at the horse racing track outside of Indianapolis.
The deal with the Oliver Family Trusts, the majority owner of the racetrack, marks the first time the developer of Power Plant and Power Plant Live at the Inner Harbor will run a gambling venue.
Cordish has developed successful hotel and casino projects in Tampa and Hollywood, Fla., for the Seminole Tribe of Florida. And the company now is vying to build a casino and hotel at the Kansas City Speedway in Kansas with partner International Speedway Corp., that track's owner.
Recently, rumors have swirled that Cordish wants to acquire one or more casino resort properties owned by Donald J. Trump's Trump Entertainment Resorts Inc. in Atlantic City, where Cordish already owns The Walk, a $110 million retail shopping project at the foot of the Atlantic City Expressway.
Cordish Co. officials have not responded to requests for comment about the Trump casinos.
But in disclosing the Indiana Downs deal, company vice president Jonathan Cordish said Cordish is eyeing opportunities in gaming.
"We have looked and are looking at opportunities all across the country," Cordish said. "We are committed to growing it."
Indiana Downs, which opened in December 2002 with harness and thoroughbred racing, plans a state-of-the-art, Las Vegas-style slots casino, with restaurants, bars and non-gaming entertainment. The 98,000-square-foot facility, to house 2,000 slot machines, is to open by the first quarter of 2009. A 10-year master plan calls for possibly more gaming, a hotel tower, parking and significant expansion of the shops and entertainment.
Ross Mangano, chairman of Indiana Downs LLC, said the track was approached by several big gaming operators to develop a casino but selected Cordish Co. after an extensive search.
"We expect to create the dominant casino project in the region," he said. "With the Cordish Co., we have the best developer in the country to create a premier entertainment destination unlike any gaming facility anywhere in the state."
Cordish Co. sees expanding its gaming projects as a natural extension of what the company built a reputation on, creating entertainment "destinations," Jonathan Cordish said.
"The right kind of entertainment can create a compelling destination," Cordish said. "We approach gaming like we approach any of those destination projects. We're adept at working with great anchors, whether a racetrack, arena, stadium or the Seminoles' casino, where you can take the capability of destination entertainment and marry it with a compelling anchor."
The company's redevelopment projects around the country have relied on key anchors, typically large stores or entertainment venues, to attract visitors to a destination to shop, dine or go to movies or live shows, including Power Plant and Power Plant Live in Baltimore, and the Fourth Street Live entertainment district in Louisville, Ky. Larger-scale projects now under development or in planning phases in Kansas City, Mo., and Louisville also mix in offices, hotels and residences and have been catalysts for revitalization.
The most recent twist has been creating such mixed-use destinations around sports venues. Ballpark Village, a project with the St. Louis Cardinals, will include condominiums, shops, restaurants, nightclubs and offices behind the outfield of the baseball team's new stadium. Daytona Live!, a $250 million complex of shops, restaurants, a movie theater, housing, a hotel and offices, will be built across from the Daytona International Speedway, home of the Daytona 500.
Investors and developers alike are seeing the potential for growth in gaming, said Steven Wieczynski, a vice president of equity research at Stifel Nicolaus in Baltimore who tracks gaming companies.
He said 38 states now have slot machine gambling in some form, and many of those that don't are considering it. In Maryland, Gov. Martin O'Malley has backed "limited" slots at racetracks and called a special session for Oct. 29 to consider, among other issues, slot machine gambling. O'Malley has also talked about placing on the ballot in November 2008 a constitutional amendment to allow slots.
"You've seen a lot of outside companies [such as private equity firms] start looking at gaming companies as attractive investments," Wieczynski said. These "companies are coming in looking at the cash flow that gaming companies generate, and it's pretty attractive. ... It's been a very profitable-type investment."
Indiana Downs was authorized for slot machines in May by Indiana's Legislature but must still go through the licensing process, Ernest Yelton, executive director of the Indiana Gaming Commission, said yesterday. The state currently has 11 casinos, including 10 riverboat casinos on the Ohio River and Lake Michigan.