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Neighbors, communities big winners since Rivers Casino's opening

Big payout

Since opening in August 2009, Rivers Casino has collected nearly $1.6 billion from slot machines and table games. Some of that money has gone toward taxes and donations:

• $476.4 million in state tax

• $146 million to Pennsylvania Race Horse Development Fund

• $65 million to Economic Development and Tourism Fund

• $57.3 million to Pittsburgh and Allegheny County

• $37.5 million to Consol Energy Center

• $4.6 million to Department of Education Library Fund

• $3 million to Northside Leadership Conference

• $3 million to Hill District groups

• $531,112 to community groups and foundations

Sources: Pennsylvania Gaming Control Board; Rivers Casino

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Five years after opening, Rivers Casino isn't drawing the play its designer envisioned, but it has pumped hundreds of millions of dollars into community investments and turned some of its early critics into champions.

When the North Shore site won the bid for Pittsburgh's casino in December 2006, its developer had estimated people would gamble $428 million at slot machines in the first year of operation. The state Gaming Control Board predicted a more conservative $362 million. The actual take fell woefully short: $241 million.

“We've never met the initial projections but we've continued steady movement toward those goals,” said Craig Clark, who became general manager in 2011, two years after the casino opened on Aug. 9, 2009.

Rivers estimates 2.9 million people visit the property each year.

Last year, gross revenue from slots in Rivers reached $277 million, and table games added $68 million.

“They've gotten better,” said Frank Gamrat, an economist with Castle Shannon-based Allegheny Institute for Public Policy, who never considered the initial projection to be “an attainable goal.”

Since opening, the casino has reaped $1.6 billion, state records show. That produced about $745 million in taxes for the state, Allegheny County and the city, according to Rivers figures through mid-July. The casino paid about $50 million toward Consol Energy Center, community organizations, charities and public libraries.

“But I think some people expected a lot more,” said Denis Rudd, professor of tourism, hospitality and gaming at Robert Morris University. “It was not going to come in and cure all of the woes of Pittsburgh. Casinos aren't meant to do that.”

When casino operators were bidding for the right to build in Pittsburgh, critics predicted a casino would draw crime to its surroundings and increase the rate of gambling addiction. The state law established a compulsive gambling plan that specifies ways for the state, casinos and gamblers to deal with problem gambling.

Critics to partners

Among early skeptics was the Carnegie Science Center, which worried about a casino neighbor drawing traffic and people who wouldn't mesh with a family-friendly crowd.

“When you think of a science center and a casino, it's kind of like chalk and cheese; they're not much alike,” said Ann Metzger, the center's co-director. “But we have a wonderful relationship with the casino. I think they've really contributed to the vibrancy of the North Shore.”

Rivers provides free slots play for people who attend the science center's 21+ Night adult programs, including Pi Night, a party on March 14 hyping math and gaming.

In 2012, the Steelers and Rivers officials each agreed to pay $200,000 for three years to underwrite free rides to and from Port Authority's North Shore Connector stop outside Heinz Field.

Paying for transit rides helps alleviate traffic more than it brings patrons to the casino, Clark said. But it helps many employees get to work and students to classes at Community College of Allegheny County.

“That's part of what we should be, as Pittsburgh's casino — we should support those efforts,” said Clark.

Such a partnership seemed unlikely several years ago, when the front offices of the Steelers and Pirates thought a casino would intensify game day traffic jams, and the casino set hefty fees for fans parking in its garage to attend games — initially $50 for Steelers games.

All sides have backed off.

The casino and sports teams regularly team up for promotions, such as nightly number drawings at baseball games for casino benefits.

“The reality is that we are a good business partner,” Clark said.

Coming through

Even before it opened, the $780 million casino had a commitment to Pittsburgh's hockey team.

Its construction by the late Don Barden, a Detroit businessman, stalled when Barden couldn't finance the project. He and a small group of investors kept just 20 percent ownership when a group headed by Chicago billionaire Neil Bluhm stepped in. The Rivers' owners, Holdings Acquisition Co. LP, bought out the other investors when Barden died.

Holdings Acquisition agreed to meet Barden's promises — namely, paying $225 million over 30 years toward Consol Energy Center, the Penguins' Uptown arena that opened in 2010.

“That is a significant commitment that no other casino in the state has to make,” Clark said of the annual payments of $7.5 million, or about $20,550 a day.

Community groups in the North Side and Hill District were promised a combined $6 millionin the first two years of the casino's existence.

Then lawmakers, when legalizing table games in 2010, tapped part of Rivers' revenue to provide consistent funding for Carnegie Library of Pittsburgh. The casino since has channeled more than $4.5 million to the library.

“It's a challenge,” Clark said of the financial obligations. “But the important part is, the ownership group came in and lived up to those commitments.”

Rivers consistently ranks as one of the state's top-performing casinos. In fiscal year 2013-14, which ended June 30, the property's 2,900 slot machines and 83 table games grossed $345.5 million — ranking third among the state's 12 casinos, behind Parx in suburban Philadelphia and Sands Casino Resort Bethlehem.

“I can't say that it has been a boon or a bust for Pittsburgh,” Allegheny Institute's Gamrat said of Rivers. “It's just become part of the landscape.”

Leading by example

Riverlife, a group that promotes Pittsburgh's riverfronts, thinks the casino set new standards for riverfront development.

“They are a model for other riverfront property owners,” said Lisa Schroeder, Riverlife president and CEO, citing the casino's glass-front design, riverside amphitheater and native landscaping. The casino hosts Riverlife's annual “Party at the Pier,” set for Sept. 5 this year.

The casino leads by example in money donated to other organizations, including The Mario Lemieux Foundation, the Allegheny County World War II Memorial, the Greater Pittsburgh Community Food Bank and the Urban League of Greater Pittsburgh.

It hosts annual charity poker events benefiting the Lemieux Foundation and provided entertainment for its fantasy hockey camps in January.

To date, the casino has provided more than $100,000 in direct funding to the foundation, which addresses cancer research and patient care.

“Ultimately, they are helping us help other people,” said Nancy Angus, the foundation's executive director.

The casino has partnered with the Pittsburgh NAACP, NorthShore Community Alliance, Allegheny YMCA and Susan G. Komen Pittsburgh, among other groups.

Through its “Community Champions” program, some of its 1,800 employees volunteer with the food bank, Habitat for Humanity, Pittsburgh Parks Conservancy and Friends of the Riverfront.

“They've tried to integrate themselves into the community and they didn't have to do that,” Angus said. “They've really tried to make themselves Pittsburghers.”

In case you missed it: This story is the second in a two-part series. Part one, which appeared in Sunday's paper, reported how homeowners have not received property tax breaks expected with state approval of casinos. To read that story, visit triblive.com.

Jason Cato is a Trib Total Media staff writer. Reach him at jcato@tribweb.com.

 

 
 


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