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Racino's collapse devastating to host township of Mahoning

Jason Cato
| Thursday, July 14, 2016, 11:34 p.m.

The failure to land a racino in Lawrence County left the small township that would have hosted it — and reaped millions of dollars in tax revenue — with a sewer plant that far exceeds its needs and means.

“We were always told that it is coming so get it done,” said Mahoning Township Supervisor Gary Pezzuolo. “Well, we got it done, but they didn't.”

The Pennsylvania Gaming Control Board on Wednesday rejected a gaming license application from Endeka Entertainment for Lawrence Downs Casino and Racing Resort, a project planned for 250 acres outside New Castle. The board's decision likely killed any chance of the project being built in Lawrence County.

It's a worst-case scenario for Mahoning officials who borrowed to build a large-capacity, $25 million wastewater treatment facility in anticipation of Lawrence Downs and the ancillary development it might have attracted.

State grants covered most of the construction cost, though the township is paying off a $10 million loan from the Pennsylvania Infrastructure Investment Authority.

PennVest officials in October rejected a Mahoning request to revise loan repayment terms from 30 years to 40 years, Pezzuolo said.

Now, he and other township officials hope to meet with Gov. Tom Wolf to find a solution.

“We're starting to run out of money,” Pezzuolo said.

The township has just $140,000 remaining from $1.5 million it collected in sewer tap-in fees from customers to access the new system, he said. They paid about $2,500 apiece.

“We would certainly meet with town officials and work with them to identify a solution,” said Jeffrey Sheridan, a Wolf spokesman.

Officials at the Department of Community and Economic Development — which manages PennVest — are aware of the matter and looking into it, Sheridan said.

Efforts to build a horse-racing harness track and casino in Mahoning started in 2004 and progressed through six developers before the Gaming Control Board ended matters.

Joseph Procacci, a Philadelphia produce magnate who bought Endeka, still holds a state harness racing license for the project — but that is contingent on obtaining a casino license, which is unlikely.

The Department of Agriculture, which oversees the Horse Racing Commission, is waiting to see whether Endeka appeals the gaming board's decision to the state Supreme Court, a spokesman said. It has 30 days to do so, though an Endeka representative said it likely won't file one.

Mahoning officials in 2006 planned a $9 million project for a new sewer plant that could process 160,000 gallons per day — more than enough capacity for its roughly 600 properties and 3,400 people, Pezzuolo said.

After being told the racino project by itself would need 130,000 gallons per day, Pezzuolo said township officials were persuaded to build a plant that could handle 380,000 gallons daily. Such convincing came from then-Gov. Ed Rendell and the state Department of Environmental Protection, he said.

The township received nearly $15 million in state grants to cover costs for the larger facility.

Still, a $10 million loan from PennVest was needed. Payments run about $37,000 a month, Pezzuolo said. Operating the plant costs $25,000 a month.

Monthly revenue is about $35,000, with the plant processing about 40,000 gallons per day, he said.

Adding more customers isn't an option right now.

“We'd have to have more money to run more line, and we don't have the money to get to them,” Pezzuolo said. “We're already in trouble. Where are we going to get the financing?”

Getting rid of the PennVest debt is key to the plant's survival, Pezzuolo said. But he isn't certain how that can happen.

“We need some help,” Pezzuolo said. “It's frustrating. The (racino) outcome is sad. It's a sin the way it played out.”

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

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