The Columbus Casino Conundrum
The election is over, but, for some, the battle has just begun.
By Steve Croyle |
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And the gods asked: "Why do those men and women fight so much? Don't they know that all that noise they are making isn't letting us sleep? What do they want then?"
- Subcommandante Marcos, contemporary Mexican revolutionary, Our Word is Our Weapon (2001)
The long-raging war for gaming in Ohio has been won. Ohio's voters approved a constitutional measure to allow first-class casinos to be built in the state's four largest cities, including one in Columbus' Arena District. That fact hasn't stopped some Franklin County activists, however, who are working to create what they have termed an "acidic environment" in hopes of dissuading casino developers from building.
In November, Ohio voters passed Issue 3, an amendment to the state's constitution that would permit the four casinos to be developed. The casinos in Columbus and Cincinnati would be built and operated by Penn National Gaming, a company that owns many casinos throughout the country. Dan Gilbert, owner of Quicken Loans and the Cleveland Cavaliers, would be the major partner of the casinos in Cleveland and Toledo. While Franklin County voted against the amendment by 58 percent, the counties where the other three casinos are to be located approved the amendment easily.
In Central Ohio, casino opponents are hoping they can parlay Franklin County's rejection of Issue 3 into an exemption. State senators David Goodman (R-New Albany) and Jim Hughes (R-Clintonville) have introduced a resolution to include a provision on the May Ballot that would grant Franklin County the right to reject a casino, but it's an uphill battle. Not only does the resolution have to gain majority support in both houses of the General Assembly, if it reaches the ballot, Franklin County's fate rests in the hands of the rest of the state.
Abstaining from the fray
Mayor Coleman's spokesman Dan Williamson said that the Mayor is analyzing the situation.
"The Mayor is concerned about the character of the area," said Williamson. "The Arena District is a jewel of this community and we don't want something introduced that would be a detriment to that."
Until he gets an official opinion from the city attorney gauging his leverage, Mayor Coleman is staying put.
"The mayor doesn't want to sit down with anybody until he understands his options," said Williamson.
The most vocal local casino opponents, such as Casino Free Columbus founders Jon Myers and Chuck Hootman, along with local restaurateur Liz Lessner, are dead-set against the casino, and are using Meetup.com to organize a coalition to prevent the casino from being built, by whatever means necessary. Local online message boards and blogs have rung with the battle cries of some locals who are determined to do whatever it takes to prevent the Columbus casino from being built.
Penn National's option to purchase the Nationwide Boulevard parcel expires January 31st, and Casino Free Columbus hopes to encourage the developer to let that option expire, even though both Hootman and Myers seemed to think that such an objective is a long shot. They want to have a 'town-hall' style meeting involving all the major players some time in January. That's a possibility.
"We're not here to be at war with anybody," said Eric Schippers, Vice President of Media Relations at Penn National. "Our approach is open and inclusive. In each of our communities we have had a positive impact on other businesses. We support local charities and, given the state of the economy where a lot of companies are tightening their belts, we help with those shortfalls."
"It's too early in the process to argue," agreed Bob Tenenbaum, a spokesman for Penn National. "The amendment just passed in November, and there are still a lot of strong feelings involved . . . you could also argue that there were counties that didn't support the smoking ban," he said.
Tenenbaum was quick to point out that Penn National is very impressed with the Arena District and wants to enhance that area.
"They are eager to meet with community officials to discuss development," he said.
Casinos in other cities
Obviously, Columbus isn't the first city in the U.S. to be approached by casino developers. When Harrah's Entertainment opened up a casino in New Orleans back in 1999, such concerns were raised.
"We heard all of that, too," said Lea Sinclair, Director of Communications for the New Orleans Tourism Marketing Corporation. "People were worried about what it would do to our city's character."
While Columbus' unique personality is unquestionably an important part of the city for many residents, New Orleans was perhaps even more at risk. Any hit to its unique character - with the French Quarter, the Marigny District, and other historic areas - would have been devastating. Did it hurt the Big Easy?
"Oh no, not at all," Sinclair said. "They've poured a lot of money into the community. Did you know that they were one of the few employers that continued paying their employees after [Hurricane] Katrina?"
Harrah's wasn't granted a permit to build its own hotel back in 1999, for fear that it would hurt other hotels in their area. After several years of 'no vacancies' signs constantly lit at the existing hotels, Harrah's was encouraged to add their own lodging.
"There's still a lot of overflow," said Sinclair.
But what about other businesses? Has the casino sapped their customers? "No," she said, "They actually bring more tourists in. They promote very heavily, and invest in advertising that promotes the entire city, not just the casino."
Even though Harrah's operates a full-service casino just a few blocks from the French Quarter, Michael Valentino doesn't see the presence of a casino as a detriment. Valentino owns several hotels in the area and his company operates the website FrenchQuarter.com, which serves as an online guide to help visitors plan their vacations.
"It's a wonderful aspect of our city," he said of Harrah's.
Erie, Pennsylvania, doesn't compare to Columbus in terms of size or demographic, but it's another Midwestern town that recently saw the advent of a casino, just three years ago. MTR Gaming manages Erie's Presque Isle Downs and Casino, just off of I-90.
John Oliver, president and CEO of VisitErie, said the casino there has been beneficial for the area.
"They've been a very good partner," said Oliver. "They assist in a lot of our marketing efforts, and they are actively involved with a number of community organizations."
Oliver didn't have hard numbers available, but when asked if he thought that the casino had met expectations in terms of creating jobs (he estimates that the Erie facility employs 800) and projected economic impact, he was quick to say 'yes.' He gives the casino credit for being a marquee attraction. "They are definitely bringing more people to the area," he said.
Oliver acknowledges that Erie faces different challenges than Columbus, but believes that casino developers generally work to see the big picture.
"They have increased and improved our tourism product," he said.
Quaker Steak and Lube wasn't hurting for business prior to the casino and racetrack going in just across the interstate, and because the casino offers a buffet and other amenities, it's easy to imagine it taking a bite out of QSL's business - but the opposite has been true.
"We've seen a pretty good increase," manager John Thompson said of the casino's impact on customer traffic.
The same is true at The Station Dinner Theater on Peach Street. Box Office manager Dave Mitchell has been collaborating with the casino's operators since they opened up three years ago.
"It's a very good draw," he said. "They have a bus that brings people over for the show, and shuttles them back when it's over."
The view from here
Still, calls to most of the Arena District businesses turned up responses of "no comment" when asked how they view the likely presence of a casino.
According to Schippers, there is support for the casino in the business community, but because of the very aggressive posture assumed by casino opponents, including The Columbus Dispatch ("They've lost their sense of objectivity on this," said Schippers, of the Big D), many local businesses are reluctant to come forward.
In fact, we found only a few that were willing to talk to us, at all.
"If they pay taxes, create jobs, and don't hurt anyone through eminent domain, then I'm okay with it," said Marc Fortney, who owns the Arena District's Bar Louie, Gaswerks, and Brothers. "Anything that supports the infrastructure, and doesn't cause harm, or take anything through eminent domain, and is a good corporate partner, is a good thing," he said.
"I'm all for people bringing in added value. The Arena District is already an entertainment area; and you have the great ballpark, and you have the Nationwide Arena," noted Fortney.
Other business owners are more reserved with their opinions on the casino. Mike Gallicchio, a partner with the CGS Group, which owns several Arena District bars, expressed doubt over whether the casino would ever actually be built.
"Hey, if it happens, it happens," he said. "If not, great."
"I don't know how it would affect me," he continued. "My experience with casinos is Vegas, period . . . I know this is not going to be Vegas. I don't necessarily think it would help me, and I don't necessarily think it would hurt me."
"If it's going to be nice and upscale, then I'm all for it," he said. "I hope it's a nice addition to the area."
The opposition's argument, and Penn's rebuttal
"This is the casino they're bringing to Columbus," Hootman said on December 16th at Casino Free Columbus' at first 'meet-up,' as he displayed a slide of a shoddy little casino incorrectly identified as the Hollywood Casino operated by Penn National in Lawrenceburg, Indiana. "This is their cookie-cutter casino."
Of course, the casino in Lawrenceburg is a riverboat casino that was originally owned by Argosy. Penn National did acquire control of that casino, but the one Hootman criticized on the slide wasn't the Argosy, nor the renovated Hollywood. And a quick Google search reveals that the design of Penn National's Hollywood casinos varies greatly from location to location.
"This is not a cookie cutter," Eric Schippers said in a phone interview, explaining that the design of this casino will be based on input from business and community leaders. "We can play off each other; we're not an island unto ourselves," he said. "We can be a unique draw and bring in new tourists."
Schippers also talked about developing cross-marketing partnerships with existing business.
"We want a very transparent and inclusive process . . . to present ourselves, answer any questions, and win the support of local businesses," he said.
Schippers believes that the casino will draw more people to the Arena District. Penn National will invest in advertising to bring new visitors to the area and introduce them to everything it has to offer. In addition to new visitors, people familiar with the Arena District might visit more frequently, he said.
One important question posed to Schippers involved provisions in the proposed enabling legislation that would appear to grant Penn National the ability to offer free alcoholic beverages. Even if Penn National is committed to enhancing the community, free booze would most certainly lure patrons away from the bars, and Ohio's law currently forbids free alcohol, period.
"That's an open issue," he replied. "Complimentary alcohol would be addressed in the enabling legislation."
The legislation, drafted by Penn National, does remove the 'loophole' opponents said would enable the casino to avoid paying taxes on wagers made in cash.
Caustic strategy
Hootman and Casino Free Columbus have a plan to prevent the casino.
"The goal is to create such an acidic environment that they will go home," he said.
Casino Free Columbus is not trying to raise money. At least not yet.
"We're three weeks into this," Hootman said several times throughout the night. In fact, the 'meet-up' wasn't so much the unveiling of a plan as the presentation of a vision.
Casino Free Columbus hasn't identified any partners and the only 'friend' listed on their website is Casino Free Philly, a similar grassroots organization that failed to keep casinos out of Philadelphia.
"That's what we need you for," Hootman told an audience of about two dozen.
Hootman and Myers visited Philadelphia to meet with the Casino Free Philly people to learn from their mistakes.
"The opposition became radicalized, and their tactics alienated more people," he said.
Casino Free Columbus hopes to focus on the economic issues, which they feel is the most powerful argument against the casino. This strategy is reiterated on the group's website, which includes a set of talking points that you can use to persuade friends you are calling; the instructional section urges complainants to "stick to the economics argument," erroneously identifying the 33-percent tax rate passed in the amendment as "the lowest of any state." (Nevada's tax rate is 6.75 percent, although lobbyists hope to raise it to 9.75 percent as early as next year; Detroit's casinos pay 8.1 percent currently, but will raise it soon to 12.1 percent. Colorado maxes out its graduated rate at 20 percent, and Iowa at 24 percent. In fact, 33 percent is about average, nationwide).
While the group has declared the "economics argument" against the casino the most effective approach, Casino Free Columbus doesn't present much in the way of an alternative; certainly nothing in the ballpark of a private investment of $250 million into the community. Condos were mentioned several times, but with so many vacant properties in the area, it's hard to imagine realtors would welcome more, nor do condos employ many people after they are built.
"We're working on it," Hootman said.
They will have to work hard. Penn National is willing to spend private money on connecting the western terminus of Nationwide Boulevard to S.R. 315, which would benefit all of the businesses in the area by alleviating traffic snarls during sporting events and concerts. Finding a private investor with pockets deep enough to match that is a real challenge.
Casino Free Columbus is also working on the legal aspects of their effort. One goal of the 'meet-up' was assembling a legal team. Part of that effort was addressed during the 'meet-up' when anybody with legal experience or anybody who wished to acquire legal experience was invited to join that team.
In spite of the battle lines drawn at the 'meet-up,' the economic and legal issues did not seem to be the focus. The resounding theme of the evening was pressure. Pressure on political leaders, pressure on business leaders, pressure on friends and neighbors. Hootman cited the owner of the 'Cops for Casinos' website, who lives in German Village.
"How would his neighbors feel if they knew he supported the casino?" asked Hootman.
The single-mindedness of the casino's opposition is impressive, if not their arguments and tactics. Overall, there is an incredible certainty within the group that the casino, of which the designs and specifics are as yet a complete mystery, is absolutely wrong for Columbus. As I left the 'meet-up,' I admitted to Hootman that I was there to gather facts.
"I'm not really against a casino in Columbus," I told him, "I just don't want the wrong casino."
"Oh," he said with inexplicable confidence, "it is."
Originally Published: January 1, 2010
