Despite pending legal challenges, the developers of Baltimore's casino formally began construction Wednesday on the planned $400 million gambling complex near the two stadiums.
Chad Barnhill, general manager of the Horseshoe Casino Baltimore, said lawsuits alleging environmental risks briefly caused a delay in construction plans, but the 335,000 square-foot complex remains on track for opening in the middle of 2014.
"There's always the concern, but we have a great team and we'll get past those hurdles," Barnhill said of the litigation. "And very soon we'll bring a great gaming facility to Baltimore."
Mayor Stephanie Rawlings-Blake and Caesars Entertainment CEO Gary Loveman joined Barnhill in touting plans for the development, which city officials are counting on to provide revenue for property tax cuts as well as jobs to help stem persistently high city unemployment.
The developers have pledged to create 2,000 construction and 1,700 casino jobs in a city where about 1 out of 10 residents is unemployed. The Caesars group is funding a city staffer to help residents land jobs at the casino.
The city plans to use casino revenue to lower property taxes — the highest in the state — gradually over the next decade.
"Horseshoe brings with it the promise of a new day," Rawlings-Blake said at the groundbreaking. She and Loveman rolled a pair of oversize ceremonial dice down a craps table to celebrate the development's progress.
"It is no small feat to get to this point," Rawlings-Blake said.
Plans for the Russell Street casino call for a 122,000 square-foot gaming floor with slot machines, table games and a "World Series of Poker" room.
The developers have agreed to pay the city at least $11 million in the first year of operation — significantly less than terms proposed in 2009, but enough to help fund the mayor's proposed property tax cut for homeowners. Rawlings-Blake plans to cut property taxes by a total of 22 percent — a reduction of 50 cents per $100 of assessed value — over 10 years.
The city's property tax rate of $2.268 per $100 of assessed value is about twice the rate in neighboring jurisdictions.
This month, two Baltimore residents filed suit seeking to halt construction of the casino, which is being built on the former site of the Maryland Chemical Company. The lawsuit says the work is allowing toxic chemicals to leach into the Patapsco River.
The suit contends the project is allowing arsenic, trichloroethylene and other toxic pollutants in the soil to get into the ground water, which then seeps into the river. They argue that "the city has undertaken no meaningful effort" to clean up the site or to keep pollution out of the ground water or the Patapsco.
The city and the developers have countered that the Maryland Department of the Environment has approved the developer's plan to cover the contaminated ground at the site with new buildings, pavement and clean soil. The state also ordered the developer to take precautions to prevent toxic vapors from entering or building up inside the casino.
The suit is the second to raise environmental concerns about the development.
In March, a city circuit judge temporarily halted construction at the site, but then decided work could continue while the matter is litigated. In that case, a group of Westport residents backed by a foundation is contending that the project is skirting state and federal requirements for cleaning up the site. A city circuit judge refused to block casino construction, but the lawsuit financed by the Inner Harbor Stewardship Foundation remains pending.
City Solicitor George Nilson has likened the flurry of litigation to "a plague of locusts" intent on stopping the project for any reason.
Barnhill called the litigation a "setback," but said the company has worked through all environmental concerns about the site with the state.
The developers pledged Wednesday that the complex would be integrated into South Baltimore, spurring the economy in the surrounding area. They say they envision businesses sprouting up organically as crowds flowed between downtown hotels, Ravens and Orioles games and the casino. The gambling complex will not have a hotel, meaning visitors would patronize other businesses as they visit the city, officials said.
"We will build a place that you'll be proud of," Loveman told an audience of lawmakers and business people gathered at the construction site.
Maryland taxes slot machines at a rate of 61 percent and table games at 20 percent. Baltimore adds a 3 percent tax for gaming revenues on city-owned land. The company will be eligible to apply for a state "brownfields" tax credit — for development of abandoned and potentially contaminated former industrial properties — after it pays city property taxes.
The mayor noted that the development already has 24 local or minority-owned companies performing work on the site, including the construction firms Commercial Group Inc. and P&J Contracting Company Inc.
She called the development a southern "gateway into Baltimore" that will "fuel millions in new development."