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Pimlico slots may cost city instead of helping it

Sun Staff

Gov. Robert L. Ehrlich Jr.'s plan to install 3,000 slots at Pimlico Race Course would require $65 million in up-front transportation improvements - money that is not accounted for in the governor's plans - according to estimates prepared by the city.

Documents obtained by The Sun also show that Mayor Martin O'Malley's administration estimates the plan would cost the city $9.3 million a year in public safety, transportation and sanitation costs. Under projections now, that would absorb Baltimore's entire share of the slots proceeds - before community impact and social costs are taken into consideration.

The cost estimates for providing services at Pimlico could present new obstacles to enactment of the governor's bill allowing the installation of 10,500 slot machines at four Maryland racetracks. The Ehrlich bill faces its first hearing in the House of Delegates today amid widespread dissatisfaction over the administration's inability to say definitively how the money would be divided.

Legislators who were briefed by aides to the governor on his planned revisions to his original bill - which has been widely dismissed as unworkable - were disappointed yesterday at the lack of specific information.

Many had expected to learn the results of a study by KPMG LLP, a consultant hired to examine the administration's original proposal, but were told the analysis was not complete.

"There was nothing to it. There was absolutely nothing - period," said Sen. James E. DeGrange Sr., a member of the Senate committee that will hold hearings on the bill tomorrow. The Anne Arundel County Democrat said he was expecting a meeting with the governor and was "shocked" when Ehrlich didn't show up for the briefing.

The governor did find time later in the day to meet with horse racing interests, two sources familiar with the meeting said.

Representatives of the state's racetrack owners were meeting with the governor's top aides when Ehrlich dropped in unexpectedly. The governor thanked them for their work and told them: "Don't oppose the bill, we're going to work it out," one source said.

A second source said Ehrlich told the group that his administration is not prepared to propose new numbers for splitting slots revenue at tomorrow's hearing but reassured them that problems will be resolved.

Senate President Thomas V. Mike Miller, a slots supporter, said he was not happy with what he learned in the briefing. He pointedly noted that Ehrlich found time for the racetrack owners but not the legislators - but then added he understood. "In fairness to the governor, the staff didn't have the numbers available by then," Miller said.

Ehrlich appeared confident as he left the State House last night. "I am quite pleased with the progress that's been made," he said, adding that the administration will unveil its revised proposal this week.

With the 90-day legislative session more than halfway over, some legislators said Ehrlich may be running out of time.

House Speaker Michael E. Busch, an opponent of slots, said the administration does not appear to have a well-thought-out policy on slots.

"If we don't have the numbers, and we don't know what the percentages are, it just adds more to the reasoned approach of waiting a year and doing a study of the implications of slots gambling in Maryland," he said.

The governor's revised bill could face serious problems if it fails to provide enough money to Baltimore to offset the anticipated costs of a 365-day-a-year, 18-hour-a-day racetrack casino in a largely residential area, city lawmakers said.

Sen. Nathaniel J. McFadden and Del. Salima S. Marriott, chairman and chairwoman of the city's Senate and House delegations, said the economic effect on Baltimore and the Pimlico neighborhoods have to be addressed for the bill to win their votes.

"I think the entire delegation would concur with that," McFadden said.

McFadden said it appears the city needs to receive from 8 percent to 10 percent of the slots proceeds - rather than the 3 percent envisioned in the original Ehrlich proposal - to cover its costs and cushion the effect on nearby neighborhoods.

Miller, however, said he believes Pimlico's main problem is parking - not transportation.

"I'm not certain the numbers are going to be as generous as the mayor would like," the Prince George's County Democrat said.

O'Malley met with city lawmakers behind closed doors last night and did not respond to a request for a comment.

The cost estimates compiled by the city show that Baltimore would need $64.7 million to rework intersections, repair roadways, widen streets, install traffic signals and make other transportation improvements in the Pimlico area.

In addition to the annual spending of $9.3 million in operating expenses - largely salaries for extra police and other city workers - Baltimore officials estimate they will need $1.8 million in extra operating costs in the first year.

That spending would roughly equal the $9 million the city would receive under Ehrlich's original bill if Pimlico takes in net revenues of $300 million a year, said chief legislative analyst Warren Deschenaux.

The transportation improvements sought by the city could be funded with bonds, Deschenaux said. But that would require payments of $6 million to $7 million a year over the next 15 years, he said.

City officials are also expecting the state to make a substantial contribution to their plans to redevelop the neighborhoods around Pimlico - a key demand of many city lawmakers. Baltimore officials estimate that cost at $250 million and are hoping for $8 million to $12 million in state funds annually to pay off the bonds that would finance those projects.

The figures obtained by The Sun apply only to Pimlico - not to Laurel Park and Rosecroft, the two other Central Maryland tracks where Ehrlich would allow 3,000 slots each. But Anne Arundel and Prince George's counties, the sites of those two tracks, could face additional costs - though Miller said the cost to Prince George's would probably be "minimal."

The demands for an increased local share could make it impossible for the Ehrlich administration to come close to the 64 percent of the slots proceeds it reserved for education in the original bill.

Racetrack owners have contended that the 25 percent share the governor allotted to them made the plan economically unworkable and are demanding more. Horse owners and breeders are also unhappy with their percentages.

However, the governor faces a potential erosion of support for the bill if he agrees to a large decrease in the share for education.

"That education share must exceed 50 percent - period - and I think it will," said McFadden, a slots supporter. "That's absolutely essential."

McFadden said he is "in hot water" with African-American ministers for his support of expanded gambling for fund education.

"They are mounting a very aggressive campaign aimed at yours truly," he said, adding that he is listening to their arguments. "Last election taught us about people who ignore their constituents, and I don't want to be one of those casualties," he said.

The Rev. Gregory B. Perkins, who heads the Interdenominational Alliance of Baltimore and Vicinity, confirmed that he and other Baltimore ministers met for about 1 1/2 hours yesterday with McFadden and Sen. Lisa A. Gladden - both Democrats.

"We made it clear that our community is hurting from these predators, from drug dealers and so forth, and that we didn't need any more predators coming in from the gambling industry," said Perkins, pastor of St. Paul Community Church in East Baltimore.

"The intensity of the meeting was quite high. Nobody lost their temper, but believe me, it was hot," Perkins said. "I do believe if was ever any doubt of our tenacity, they now know beyond a shadow of a doubt that we're in this thing for the long haul."

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