Fate of slots at Arundel Mills goes to courts

May 22, 2010|By Nicole Fuller, The Baltimore Sun

In one corner stands a prominent developer — Baltimore-based Cordish Cos. — with dreams of building an enormous slots parlor at Arundel Mills mall that would deliver millions of dollars in annual taxes to a financially beleaguered state government.

In the other corner is a group of residents, backed by the venerable Maryland Jockey Club, fighting with passion to block a casino near their homes.

Starting Monday, a judge will hear arguments in the high-stakes battle surrounding what is expected to be the state's most lucrative slots license.

The lawsuit brought by Cordish centers on whether a petition drive launched by the residents and the horse racing industry to block a casino at the mall is valid, and, more precisely, whether the county election board erred when it signed off on the referendum effort.

"The stakes are very high," said James Karmel, an associate professor of history at Harford Community College and an unpaid adviser for the Maryland Gaming Association, which in not involved in the lawsuit. "The revenue potential is tremendous, given its location between Baltimore and Washington. I fully expect an aggressive fight."

The case comes as Maryland's slots program struggles to launch. Voters approved a gambling plan in November 2008, but only three of five available slots licenses have been awarded — including one for the Arundel mall. Arundel and a Baltimore site are the two largest and most visible slots locations authorized by state law, but plans in both places have stalled.

Maryland, county governments and racing interests are waiting for slots money to begin flowing, while gambling options flourish in neighboring states.

Cordish surprised many when he won the Arundel license. Many county officials and residents expected the slots parlor to go to the Laurel Park race course. But Laurel's owner, the Magna Entertainment Corp., was in bankruptcy at the time and could not produce a down payment.

The Anne Arundel County Council debated for months whether to approve zoning changes that would allow slots at the mall, and endorsed them in December. A petition drive to overturn that decision began soon after.

This week's legal court battle is the latest step in a fight that could continue to drag on for months. Both parties say that whatever the Circuit Court decides, an appeal to the state's highest court is likely.

Neither side has shown a propensity to back away from the battle.

Cordish has already paid millions of dollars in licensing fees to the state. And the Maryland Jockey Club still has dreams of reviving the dying horse-racing industry with gambling profits. It has invested more than a half-million dollars to fight Cordish and keep alive the possibility of slots at Laurel Park, teaming with a disgruntled group of county residents who call themselves Citizens Against Slots and hiring Chicago-based FieldWorks to gather enough signatures for a ballot referendum.

The court file has grown thick with motions and counter-motions.

One intriguing allegation came recently in an affidavit submitted by the citizens and Laurel Park side. A former FBI agent hired by attorneys for the citizens group said that a company affiliated with the Cordish Cos. hired a woman to disrupt the petition drive.

Nikki Thornhill of Glen Burnie told investigator Robert H. Pearre Jr. that she was "recruited" to "disrupt" the signature-gathering process, according to the affidavit. During an interview with Pearre, according to the affidavit, Thornhill showed the investigator a pay stub from Sereflex LLC reflecting $399 in pay for a week's work. According to its website, Sereflex is a subsidiary of Cordish Cos.

The affidavit also said that Thornhill worked for FieldWorks for about a week, and, according to a handwriting expert, Thornhill submitted invalid signatures during that time.

Anthony Herman, an attorney for PPE Resorts Casino Maryland LLC, the Cordish entity handling the development, denied any wrongdoing in an e-mailed statement.

"Thornhill was a FieldWorks' circulator who was unknown" to PPE officials, Herman wrote. "She was not a mole and that allegation is nonsense. She offered to work for PPE, and against the referendum petition, because she could no longer be part of the unlawful petition effort. …She wanted to help educate potential signers about the true nature of MJC's deception."

Thornhill has refused to be deposed in the case, invoking her Fifth Amendment rights.

Cordish's allegations "have been so wild and unsubstantiated from the beginning," said Rifkin, the community group's attorney. "And now they're being called to testify and they can't substantiate anything."

The lawsuit began in February, after Citizens Against Slots submitted the requisite signatures, and Cordish claimed that the election board committed "flagrant failures" in certifying them. The suit also accused FieldWorks of fraud, saying it "misrepresented and concealed facts."

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