State panel opens door to new bids for Baltimore slots

Unsuccessful applicant loses contract appeal

December 08, 2010|By Nicole Fuller, The Baltimore Sun

A state appeals panel has upheld the decision by slots regulators to throw out a bid for the stalled Baltimore casino location, opening the door for the potentially lucrative site to again be offered to gambling developers.

The Maryland State Board of Contract Appeals ruled this week that regulators "bent over backwards" to try to keep the Baltimore City Entertainment Group in the running, even after the group failed to post a required $22.5 million deposit. The state Video Lottery Terminal Location Commission denied the group a license to build a 3,750-slot machine parlor in Baltimore last year, and the developer challenged that decision.

"The location commission was most generous and patient with BCEG in determining to accept its original application and patiently waiting for a supplemental proposal accompanied by the required and repeatedly promised application fee," said the board in its 58-page decision, signed Tuesday by Chairman Michael J. Collins.

Donald C. Fry, chairman of the state commission charged with awarding the state's five slots licenses, said the board's decision "opens up an opportunity to issue [a request for proposals] as soon as possible."

"This is a significant decision that we're very pleased with," said Fry. "We were patient and acted reasonably and prudently in making a decision in the best interest of the state."

Fry cautioned, though, that the commission needs to meet with Baltimore officials to discuss several issues related to the site. By law, the slots parlor must be built on city-owned land, and Baltimore is entangled in a legal dispute with BCEG over its proposed site, an 11-acre parcel off Russell Street, south of M&T Bank Stadium.

The developer sued the city in July seeking $100 million in damages, alleging that the city did not hold up its end of the deal to lease the land, and the city countersued. Both suits are pending in Baltimore Circuit Court.

State and city officials said it was unclear whether the lawsuits would preclude the state commission from rebidding the site, but Fry said the panel would discuss its next moves with lawyers in the coming days. Fry said the commission plans to talk with city officials and the Baltimore Development Corp. to identify all of the city-owned sites in the approved slots area, in order to put together "the most competitive bid."

Michael Moldenhauer, president of Baltimore City Entertainment Group, could not be reached for comment Wednesday.

Ryan O'Doherty, a spokesman for Mayor Stephanie Rawlings-Blake, said the mayor is "very pleased" with the board's decision and "confident" that the remaining legal issues will be resolved.

"It's a step forward in the process of getting the Baltimore site back out to bid," O'Doherty said. "She's excited about that."

Last month, state lawmakers, including Senate President Thomas V. Mike Miller, said they would work during the coming legislative session to change Maryland slots law to make the sites that have failed to attract qualified bidders — including Baltimore and Rocky Gap in Allegany County — more attractive. Lawmakers said they would try to ease restrictions that prevent casino owners from controlling more than one of the state's five licenses and reduce the tax rate on slots proceeds.

nicole.fuller@baltsun.com

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