THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, January 14, 1995 TAG: 9501140221
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY TONI WHITT, STAFF WRITER
DATELINE: PORTSMOUTH LENGTH: Long : 119 lines
``Imagine a world class hotel, convention and riverboat complex that will attract 1.4 million people to the Portsmouth waterfront. Imagine a beautiful new amphitheater with the programming budget to attract prestigious national acts. Imagine a new marina, specifically designed to attract super-yachts.''
- From the Eldorado Hotel and Casinos proposal
Portsmouth officials have long dreamed of turning their quiet waterfront, anchored by the ghost of a Coast Guard base, into a festival place teeming with tourists and locals spending money.
And that's what Eldorado Hotel and Casinos promised in its $123 million riverboat gambling proposal.
The company - a partnership between Eldorado of Reno, Primadonna Resorts Inc. of Nevada, and a group of eight local investors - has promised to build $101 million worth of improvements on the waterfront.
The company also estimated it would bring 900 new jobs, a $16 million payroll and $9 million in revenues for Portsmouth.
But in choosing to negotiate with Eldorado, the city ignored what its staff said was a better offer from the well-known Bally Entertainment Corp. Bally's offer promised more over a three-stage process. Bally's sketches of its vision for Portsmouth showed the entire waterfront as a festival place with a European flair.
When the majority of the council membersagreed to negotiate with Eldorado, at least one member began to worry that the proposal was chosen based on the prominent local investors rather than its merits.
Among those investors are some of the best-connected people in the city, including a former councilman, a Circuit Court judge and the leader of an organization that contributed heavily to the elections of two of the newest council members.
City Manager V. Wayne Orton said he had two compelling reasons for choosing Eldorado:
Eldorado and its partners were financially robust, while Forbes magazine recently rated Bally Entertainment poorly for profitability, growth over a five-year period, and last year's profit margin.
Eldorado promised to begin construction on its entire $101 million riverboat complex and entertainment center, if it wins a license to operate a floating casino in Portsmouth.
Bally's proposal offered a smaller investment in its first phase, with other improvements coming after the casino had been in operation for a time. Orton feared that Bally would never begin construction of the second and third phases.
``I don't want another King's Crossing on the waterfront,'' Orton said, raising the specter of the luxury condominium project that went bankrupt and had to be taken over by the city. ``We have a failed project because an entity failed financially. The bottom line is, financially, Bally's is very weak.''
The staff rated Bally's proposal higher for several reasons, said Councilman Cameron C. Pitts. Bally's entire package offered the city more improvements and more attractive facilities. The staff also believed the company had a better ability to sell Portsmouth to travelers.
Bally has been on the upswing in the last few months. In its last quarterly report, the casino operator said it had doubled its earnings. A spokesman for the company said Friday that Bally is financially healthy and capable of tackling the Portsmouth project.
``It's a very well-run, very successful company that has among the very best properties,'' said Michael Kempner, a Bally spokesman.
Eldorado Hotel Associated Limited Partnership owns and operates the Eldorado Hotel & Casino in Reno. Eldorado is also developing a new resort with Circus Circus Enterprises in Reno.
The company would own 45 percent of the proposed riverboat operation in Portsmouth. Another 45 percent would be owned by Primadonna Resorts Inc., a company that has experience building casinos that also feature family-oriented entertainment - something the city stressed in its request for proposals.
Primadonna Resorts has been described in trade magazines as the most profitable land-based casino company in Nevada.
It owns and operates three casino-resorts - Buffalo Bill's Resort and Casino, Primadonna Resort and Casino and Whiskey Pete's Hotel and Casino. All are on the California-Nevada border. In addition to gambling, Buffalo Bill's features ``Desperado,'' the world's tallest and fastest roller coaster.
Primadonna Resorts is also involved in a joint venture with MGM Grand Inc. to build a 2,000-room casino resort in Las Vegas called New York-New York that would feature recreations of the Statue of Liberty, the skyscrapers of the Manhattan skyline, a Coney Island roller coaster and other famous Big Apple landmarks and attractions.
Eldorado is involved in another riverboat joint venture with Primadonna. They are seeking a gaming license to develop and operate a casino in New Albany on the Ohio River across from Louisville, Ky.
The Eldorado proposal for Portsmouth includes:
A nine-story, 300-room hotel with 275 luxury rooms, 15 player suites and 10 penthouse suites; an upscale restaurant, retail shops, indoor swimming pool, health spa, and convention facility, including 1,000 seats for meals; a 1,500-seat meeting space; and a 14,000 square-foot exhibition space.
A marina for large yachts and a dock house, located south of City Hall.
Improvements for on- and off-ramps at I-264 and Crawford Parkway, including a stormwater retention lake with a fountain, concert park, bandstand and other facilities.
A $3 million amphitheater adjacent to the park with a capacity of between 5,000 and 10,000.
It was the local investors more than the details of the plan, though, that made both Councilman Pitts and Mayor Gloria O. Webb uncomfortable.
The investors were assembled by former councilman Morton V. Whitlow who is also a local attorney. The group includes: Circuit Court Judge Johnny Morrison, Harvey N. Johnson Jr., Marlene Randall, Glenn Yates Jr., Fred T. Mathews Jr., John W. Failes and Michael J. Blachman.
Blachman is president of the Portsmouth Committee, which contributed heavily to the joint council campaign of James T. Martin and P. Ward Robinette, both of whom reportedly support the Eldorado proposal.
After first agreeing to negotiate with Eldorado, Webb later changed her mind. She said she had misgivings about her decision and deepening concerns about potential crime that might come with a floating casino.
Gov. George F. Allen said Friday that one of the reasons that there are opponents to riverboat gambling is because of ``the corruption - whether it's illegal or not,'' that can come with the promise of so much money.
Allen has not taken a stand on riverboat gambling.
KEYWORDS: RIVERBOAT GAMBLING CASINO PORTSMOUTH WATERFRONT
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