THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, January 8, 1995 TAG: 9501080055
SECTION: FRONT PAGE: A7 EDITION: FINAL
SOURCE: BY TONI WHITT, STAFF WRITER
LENGTH: Medium: 97 lines
For leaders of long-struggling cities, the idea of floating casinos plying the James and Elizabeth rivers conjures visions of urban redevelopment and the end of hard times.
A few council members in Hampton, Norfolk and Portsmouth have talked about the evils of gambling, but they say they fear a greater threat: losing out while all those around them are lining their coffers with gambling revenues.
So those cities have pursued partnerships with casinos - sending a message to state legislators that they support the notion of riverboat gambling, while disturbing those citizens who fear the crime and social ills associated with gambling.
The vision is so tempting that in Newport News, some of the city's most prominent business and civic leaders have joined together to invest in companies hoping to locate riverboat facilities there. So many of them have ties to the boards that will be helping to choose which company gets a license that they volunteered to file conflict of interest forms.
The chairman of the Newport News Industrial Development Authority, Alan Witt, had to step down from the decision-making process after his accounting firm did work for investors or potential investors in three of the riverboat companies.
Casino operators began wooing cities two years ago when Del. Jerrauld C. Jones, D-Norfolk, introduced the first riverboat gambling bill to the General Assembly. Casinos began approaching cities with rosy pictures of what legalized gambling could offer - revitalization for struggling downtowns; boatloads of tourists; tax windfalls.
Most of those cities have begun negotiating contracts without getting a feel for where citizens stand on the issue. Jones plans to tie a referendum to the gaming legislation, so that voters will have the final say. Several city leaders view the referendum as their political safety net.
But even officials involved in choosing the riverboat operators say they are not sure casinos are a good idea. Several Portsmouth council members suggested they might oppose them in their votes on a referendum.
Neil Morgan, the acting assistant director of planning and development in Newport News, said: ``I have mixed feelings about it. . . . Our assignment was not to go out and decide whether gaming was a good thing. If this happens at the state level, we want Newport News to get its fair share. My job is to find a good company, with good ethics, and a good track record that will be a good corporate citizen.''
One problem resulting from all the hoopla is that too many casinos seem to be interested in Hampton Roads. If a casino were awarded a license in each of the four cities - Hampton, Newport News, Portsmouth and Norfolk - the riverboat market likely would be saturated and profits could be small or non-existent in each of the cities.
Those concerns, in part, led Jones to announce last week that the bill he will introduce this year will allow cities that get casinos to share profits with neighboring cities that don't.
``I don't believe a state gaming commission would issue four licenses in Hampton Roads,'' said Portsmouth City Manager V. Wayne Orton. ``And if they did, and if each city had two vessels, there is a finite return. . . . That's why we need a regional approach.''
Orton suggested that each of the four cities operate one riverboat and set up a regional economic development fund with some of the profits.
Officials from all of the cities said they did next to nothing to attract the interest of casinos. Two cities, Portsmouth and Newport News, advertised for proposals and asked the casino operators to submit large fees with their bids. The fees were to be used to pay for local officials to visit casinos and riverboats the companies currently operate.
Hampton was the first city to approve a plan. The Hampton City Council has long pursued a pact with Hollywood Casinos to operate a riverboat out of the city's Strawberry Banks site at the mouth of the Hampton Roads Bridge-Tunnel.
Hollywood Casinos set the standard, upping the ante for other casinos, when it promised money for police, schools, museums and a public park. The council voted 6-0 with one abstention to accept that proposal, worth an estimated $150 million to $180 million in the first five years.
But Norfolk wasn't as interested in building up its downtown or adding to its services as it was in cash. So city leaders signed a contract with Spirit Cruises Inc., guaranteeing the city 8 percent of the casino's annual revenues. Norfolk's council voted 6-1 to accept the contract.
While Hampton and Norfolk were discussing proposals with casino operators, Portsmouth was still pursuing a horseracing track. Casino operators had been approaching city officials all along, Orton said. But the council and administrators believed that the city should wait for the decision on the horse track before beginning discussions on the riverboats.
``We've had unsolicited approaches about the desirability of site in Portsmouth,'' Orton said. ``We chose not to pursue any such undertaking until the race track process had run its full course.''
The Portsmouth council voted 5-2 to pursue riverboat gaming after the race track issue was decided.
Portsmouth officials plan to announce their choice of casino operator later this month. The city has declined to name the five casinos that submitted proposals while it negotiates. The casino operators have honored the city's request to keep negotiations quiet.
KEYWORDS: RIVERBOAT GAMBLING VIRGINIA by CNB