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Firms want payment for work on slots bid

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Architects, a public relations firm and several other companies that were part of a rejected bid to build a casino in downtown Baltimore claim they are owed $771,000 by the Canadian home builder who led the proposal - the latest sign of disarray surrounding efforts to bring slot machines to the city.

The eight companies want the Maryland Lottery to intervene in the dispute by tapping or freezing a $3 million deposit made last year by the would-be casino developer, Baltimore City Entertainment Group.

That request is under review, said Assistant Attorney General Robert Fontaine, who represents the lottery. But he sounded doubtful that it would be granted. "It strikes me as something that would be very difficult to do without court involvement of some sort," he said.

Meanwhile, the casino group is hiring a new lawyer as it prepares to appeal a decision by the state slots commission rejecting its bid. The change in legal counsel has delayed the appeal. Previously set for today, a hearing is now scheduled for March 12 before the Board of Contract Appeals.

If the appeal fails, the city site will be rebid along with Rocky Gap in Western Maryland, which did not attract a qualified bidder when applications were due about a year ago. Slots parlors in Cecil County and Ocean City could open this year. Zoning approval for a fifth, a 4,750-machine casino at Arundel Mills Mall, is being fought by local groups.

The slots commission rejected the Michael Moldenhauer-led proposal in December. Members said they were frustrated by his failure to pay $19.5 million in additional license fees for the 3,750 machines envisioned at the city casino. They also complained about multiple delays and a lack of clarity about who would control the facility.

The claims of nonpayment against Moldenhauer are contained in a Feb. 16 letter to the lottery and the slots commission.

"Mr. Moldenhauer has at no time registered dissatisfaction with any of the work performed, nor has he denied that the payables are unjust or his obligation," lawyer Charles G. Byrd Jr. wrote.

But Byrd said the vendors have waited up to seven months to be paid, despite repeated phone calls and letters. "BCEG and Mr. Moldenhauer have failed to respond to any of these requests resulting in the need for each company to send a demand letter seeking full payment," Byrd wrote.

Moldenhauer did not respond Monday to a message left at his office in Toronto, and Byrd did not return a call.

Several of the vendors are based in Maryland, including the Cryor Group LLC, led by Michael Cryor, a strategic consultant and former Maryland Democratic Party chairman; the public relations firm of Sandra S. Hillman and VMG Inc., a marketing firm headed by LaRian Finney.

Other vendors include STV Inc., an Illinois-based engineering firm; Reich + Petch architects in Toronto and Gaming Entertainment Management Corp., run by two Canadians with years of gambling experience.

Donald C. Fry, chairman of the slots commission, said there is "significant question" as to whether the state could legally withhold any portion of the $3 million, except to cover the cost of background investigations that were conducted.

Referring to the claims, Fry said, "that's really something for the parties to agree to or a court of law to decide."

Mayor Stephanie C. Rawlings-Blake is a strong supporter of the downtown project, which she and other city officials say would pay for a reduction in the city's high property tax rate.

Copyright © 2014, The Baltimore Sun
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