Cordish's revenge? It emerges as operator of proposed Petersburg casino
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The Cordish Companies, a well-established casino developer spurned by Richmond last year in the sweepstakes to build a gaming resort in the capital, has emerged as the preferred operator of a proposed casino in Petersburg that got a big boost this week from the state's legislative watchdog agency.
The Petersburg City Council unanimously approved the choice of Cordish in a meeting on Tuesday night, but neither the city nor the Baltimore-based company has revealed details about where the casino would be built, its size and amenities, the capital investment or jobs that would be created.
All of those details will be necessary for Petersburg to submit the project to city voters next year for approval in a referendum - if the General Assembly agrees to allow one under a 2020 state law that authorizes legal casino gaming in five cities, including Richmond.
Richmond voters rejected a proposal to build the $565 million ONE + Casino Resort along Interstate 95 at Bells Road, but Mayor Levar Stoney and City Council voted last year to bring a revised proposal back to voters for approval this fall, only to be thwarted by the assembly and advocates for a Petersburg casino.
The Cordish Cos., which had sought to build a casino on Arthur Ashe Boulevard in Richmond, as part of its Live! brand, was a finalist for the Richmond project before a panel of Richmond officials picked the Urban One proposal in May 2021.
On Monday, the Joint Legislative Audit and Review Commission released a study that concluded Petersburg could support a casino, either by itself or in competition with one in Richmond, although the size and benefits would be diminished if two casinos opened within 25 miles of each other.
A day later, Cordish announced that Petersburg had selected it as its preferred casino operator. The company is a veteran casino developer, operating casino resorts in Baltimore, Philadelphia, Pittsburgh and two Florida cities under the "Live! Casino & Hotel" brand.
In the announcement, Petersburg Mayor Sam Parham said, "An important part of our evaluation was to identify a development partner with a proven track record in developing and operating mixed-use and casino properties, a long history of revitalizing cities across the country, and strong community engagement practices."
"The development of a casino in Petersburg is a once in a generation opportunity to set the course for economic growth for decades to come," Parham said. "We are confident we have selected the ideal partner in The Cordish Companies to bring to fruition our vision for Petersburg."
Cordish Chief Operating Officer Zed Smith said, "Urban revitalization is at the heartbeat of The Cordish Companies' DNA."
Smith, an African American, also touted the commitment of Gov. Glenn Youngkin to help Petersburg. The Republican is pushing a combination of new and existing initiatives to revitalize the economically struggling, majority Black city.
"We share Governor Youngkin, Mayor Parham and the Petersburg City Council's commitment to create a world-class entertainment destination and mixed-used project with gaming that will generate millions of dollars in tax revenues and spinoff economic development, create thousands of new jobs and benefits to the local community, and become a major tourist destination for the city."
Race has played a major role in discussions about a casino in central Virginia, beginning in 2020 when Black leaders in the General Assembly called for minority ownership in casino development projects. Urban One, the majority partner in the ONE Casino + Resort proposal, is a Black-owned radio company in Silver Spring, Md., that said its project would have been the only Black-owned casino in the United States.
The project would have relied on financial backing and expertise from Peninsula Pacific Entertainment, the California-based owner of the Colonial Downs horse track in New Kent County and a growing state network of Rosie's Gaming Emporiums, including one in South Richmond and another in Prince William County in the lucrative Northern Virginia market. The emporiums operate historical horse racing terminals that look like slot machines but operate on actual horse race results.
Richmond had extended its contract with the ONE partnership to pursue developing a casino at the same South Richmond site, if city voters approved a second referendum this year.
Urban One and the city ultimately asked the state court to withdraw its referendum from the ballot in November after the General Assembly added language to the budget to block a second vote until JLARC had completed its study of the viability of a casino in Petersburg.
The study found this week that a casino in Petersburg could generate $204 million in gaming revenue inn 2028 - more than a casino that already has opened in Bristol in temporary quarters and one under construction in Portsmouth - and create about 1,300 jobs.
But that's without a rival casino in Richmond, which hasn't given up its hopes.
The JLARC study found that a casino in Richmond would generate about $300 million and 2,000 jobs — almost $100 million more in revenue and 700 more jobs than one in Petersburg by itself.
If both cities develop casinos, JLARC said the one in Petersburg would shrink in scope, producing about $140 million a year in gaming revenues, but generating about $4 million less in local taxes and creating 300 fewer jobs.
“The casino in Petersburg would be larger if there is no Richmond casino,” said Tom Zitt, executive vice president of the Innovation Group, the state’s gaming consultant.
Sen. Joe Morrissey, D-Richmond, who used his political leverage with Senate Democrats to secure budget language to block a second Richmond referendum, adamantly opposes allowing Richmond to seek a second referendum for a proposed casino.
State law currently doesn't forbid Richmond from seeking a second referendum after the JLARC study, but Morrissey said this week he already has filed legislation to authorize Petersburg - not Richmond - to operate the fifth casino in Virginia.
Paul Goldman, Morrissey's former law partner, helped lead the successful effort to defeat the first Richmond casino referendum, but he favors a second vote, as long as there's an open process in selecting a developer for a hugely lucrative contract.
That also applies to Petersburg, which Goldman said is wrong in selecting a casino operator without any public review.
"It should have been an open, transparent process in Petersburg," he said.
Goldman also faults Richmond for extending the ONE Casino contract with Urban One without further public review, although he acknowledges that the city conducted a competitive bidding process last year that produced a half-dozen proposals that included extensive public comment.
Richmond and Danville were the only cities to select casino operators though an open, competitive process, which JLARC advocated in a comprehensive gaming study in 2019. Bristol, Portsmouth and Norfolk reached deals with developers outside of a public competitive bidding process.
If Richmond seeks a second referendum, Goldman said, its choice of developer "should be done in an open process."
