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State gaming board kills racino for Lawrence County

Jason Cato
| Wednesday, July 13, 2016, 4:12 p.m.

A 12-year race ended without a place in the winner's circle for a racino project long slated for Lawrence County.

The Pennsylvania Gaming Control board Wednesday unanimously voted to deny the gaming license for Lawrence Downs Casino and Racing Resort, which was to have been built outside New Castle. The seven board members deliberated for less than 45 minutes before rejecting the license application.

“The decision is a death sentence for having a racino in Lawrence County,” said John O'Riordan, an attorney for Philadelphia produce magnate Joseph Procacci and Endeka Entertainment. “Mr. Procacci is disappointed. He is evaluating his options.”

Procacci still owns the 250-acre site in Mahoning Township and a state harness-racing license — at least for now. The Horse Racing Commission next meets in about two weeks.

The racing and casino licenses are tied together by state law. Lawrence Downs would have become the state's seventh racino as well as the 14th — and final — casino.

“I know there are some people in the middle of the state who would love to have this license,” O'Riordan said. “My gut tells me this is the end of the road for Endeka and this location.”

Lawrence County was promised a racino in 2004, when state lawmakers legalized casino gambling in Pennsylvania.

The project, once known as Valley View Downs, has been headed by six would-be developers.

“This was an issue that went on for 12 years,” said Lawrence County Commission Chairman Dan Vogler, a longtime proponent of the racino project. “We fought the good fight. We tried our best.”

A group of Philadelphia businessmen formed Endeka and took over plans in 2012.

Procacci, 88, of Cherry Hill, N.J., bought control of Endeka last year and took over the project.

Procacci, known as the “Tomato King of Philadelphia,” is the founder and CEO of Procacci Brothers Sales Corp., the largest tomato and produce distributor on the East Coast.

Before Lawrence Downs, Procacci lost out on a bid to secure a license to build Pennsylvania's last stand-alone casino on property he owns in South Philadelphia.

Procacci and his team told state regulators that they could build a casino and one-mile racetrack in Lawrence County for $205 million, which included a $50 million casino license fee.

Endeka asked the Gaming Control Board for a 60-day extension to finalize a loan through Merrill Lynch and Bank of America after another financing deal recently fell apart. The board in May 2015 granted Endeka a six-month extension to finalize plans for the racino project over a staff recommendation to reject the license application.

Several board members expressed concerns about whether Lawrence Downs could be built for $205 million, an amount Endeka said included the licensing fee as well as construction costs. Procacci was willing to put up another $25 million, along with $50 million that was to be provided through a bond from the Lawrence County Industrial Development Authority.

Cyrus Pitre, director of the board's Office of Enforcement Counsel, again recommended denying the license application.

“Our work on the Endeka case over the last three years has been futile labor, much like that of Sisyphus,” Pitre said, “rolling a boulder up a mountain only for it to roll back down under its own weight.”

Mahoning Township spent $10 million on a water plant and infrastructure to serve the racino property. Commission Chairman Vito Yeropoli said the township is struggling to repay the debt.

“We need it bad,” Yeropoli said about the racino. “We need to get the thing done. If we don't, we're in trouble.”

County Commissioner Dan Vogler said the community was counting on the racino to provide up to 600 jobs. Lawrence County's unemployment rate is about 6.5 percent, he said.

“We continue to struggle,” Vogler told Gaming Control Board members.

Jason Cato is a Tribune-Review staff writer. Reach him at 412-320-7936 or jcato@tribweb.com.

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