Hording Quarters

Everything you ever wanted to know about how not to finance a casino (but were forced by the Pennsylvania Gaming Commission to find out).

First the good news (if you wanted to see a casino built in Pittsburgh):

Mr. Barden's spokesman, Bob Oltmanns, said this afternoon that a private investment firm headed by Chicago billionaire Neil Bluhm has committed to provide $120 million in equity for the project.

But then the bad news (if you wanted to see a casino built in Pittsburgh):

Mr. Barden has been looking for a total of $780 million, however, to cover the casino project's full costs... Mr. Barden has been unable to pay his contractors at least $10 million for work done since March. Mr. Barden met with them today, and they decided to suspend work while awaiting payment, Mr. Oltmanns said.

Now, I don't know much about construction (I doubt that I could tell an I-beam from reinforced concrete or a rivet from a flange), but I do know two things. First, never piss off anyone with power tools. Second, never ever piss off anyone that has access to a backhoe or a bulldozer.

Not to be nervous or anything, but the suspension of construction activities (which the story spins as a mutual "decision," rather than an attempt to preempt a walkout) seems to be an attempt for Barden to run away just out of firing range so he can apologize from a nice, safe distance. Given the condition and volatility of the markets, I find it hard to believe that two weeks will make any major difference in the search for permanent financing.

Of course, I'm probably wrong about that. If I really knew anything about high casino financing, I wouldn't be working for the government, would I?

Perhaps, in order to alleviate this problem, Don Barden should erect a temporary slots parlour. It would be a big hole in the ground into which everyone would throw their quarters and other loose change. I can only imagine that the expected payoff to the gaming customers would be slightly worse than the full blown slots parlour.