Frank said the agreement with Cormany is now considered the "prevailing" use for the parcel.
City officials who attended the slots commission meeting were visibly upset by the rejection. Kim Clark, executive vice president of the Baltimore Development Corp., burst into tears.
The Canadian-led bidders "are good guys and they've worked hard and deserve the opportunity and they were not given it," she said. "We've put in a lot of hard work."
Late Wednesday, members of the group worked with lawyers to negotiate a deal they hoped would buoy their efforts, obtaining a commitment for $50 million from York Capital Management. A manager from that investment firm, Luis Medeiros, attended the commission meeting. In the 1998, Medeiros was managing director of Leucadia National Corp., which purchased substantial shares of both Pimlico Race Course and Laurel Park at a time when they were in financial danger.
But the cash infusion came at a price: The group would give up the controlling interest in the venture. Moldenhauer said he would have remained the managing partner, but his stake would have been cut by more than half.
And York was not ready to commit to the deal until it studied it for an additional 45 to 60 days.
Cryor insisted that much of the developers' financing was already in place, saying they had a $150 million construction financing commitment. But those funds could not be tapped for the state license fees, Cryor said.
Moldenhauer said he believed that Baltimore could be the first Maryland slots parlor in operation, with 2,000 machines in a temporary facility by June.
Commissioner Robert R. Neall said he was offended by Moldenhauer's assertions, saying the group was "nowhere near" opening by June.
The bid, he said, "has not moved, in the eyes of the commission, 1 millimeter" in months.
A spokesman for Gov. Martin O'Malley said the slots panel had done its job.
"It's unfortunate they couldn't get the financing in place, but we look forward to a new bidding process - and hopefully with improved credit markets, this is a small setback and we can move forward quickly," said spokesman Shaun Adamec.