Outside Erie

9 Responses to “Slots in Maryland: A Big Deal for Pennsylvania?”

1. Jim
   November 7th, 2008 at 8:34 am

   This is an interesting development. I have friends who live in Gettysburg, and up until two years ago, owned a business there. They have been talking about the battle that took place to bring gaming to the Gettysburg area in an attempt to address the decline in tourism there. The slots, so far, failed there, but they are right on the Maryland boarder and were aware of the attempt to secure gaming within the state of Maryland. They have been saying Maryland had been using some of the same arguments as used here, about tourism (read that gaming) dollars leaving the state for Pennsylvania. So as I see it, this development is sure to hurt the Gettysburg economy, which is already hurting.

   I was in Gettysburg twice this year for meetings, once in July and again in late September, and can attest to the fact that traffic was the lightest I have ever witnessed there. That was surprising because on Friday the week I was there, they dedicated the new Gettysburg visitors center, containing the restored cyclorama painting.

   Competition for these tourism, or leisure dollars is intensifying nation wide. Even Las Vegas is hurting which has been pretty insulated from economic downturns over the years. Just this morning there is an article in the WSJ indicating that Sands is seeking cash, and may halt projects.
   I am beginning to get the impression that the gaming industry is rapidly reaching a saturation point, and may begin dramatic contractions as the novelty begins to wear off in places like Pennsylvania, where it is still relatively new.

   I believe, as we are just now starting to see spending plans for the gaming revenue at the local level, it would be prudent to carefully consider how that money is committed, and not make the mistake of thinking it will be an ever growing pot of money for every spending proposal that comes along.

2. Radio Free JoJo
   November 7th, 2008 at 10:16 am

   This questionable hope that tourism will be the savior of Erie is why I was incredulous when the first thing out of Mayor Sinnott’s mouth to Good Morning America on the train ride was that Erie was reinventing ourselves as a tourist town.
   How about saying something like “Erie is open for business, with four colleges and universities, an advanced skilled workforce, and nearly unlimited natural resources, we are reinventing ourselves as a logistics, manufacturing, and knowledge-based industrial engine for the 21st century.”
   To paraphrase Jeff Zucker, let’s not trade “manufacturing dollars for tourism pennies.”

3. george vietze
   November 7th, 2008 at 10:19 am

   The impact of slots and the casino/racetrack, so far, has been positive for both the Erie area and the State of Pa. The revenue has exceeded expectations as they have grossed almost $40million a week netting from $1.5-1.9 million for the state of Pa. and generating revenue locally.
   The racehorse purses are funded by the State of Pa. from a revenue pool of 12% of gross revenue resulting in huge purses equal to some of the best race tracks in the country, thereby attracting quality horses and trainers and jockeys. Some of those jockeys have chose to reside in the Erie area and trainers and animal vets are purchasing local land and farms to do business in this area. The Jacobs family who used to own the Chicago Cubs have recently invested in MTR the casino/racetrack owner and the talk on the backside from the horsemen is that it is positve for horse interests.

   This success has paved the way for the Govenor and the State of Pa. to view the redevelopment of the Erie area as being in the best interest of the State of Pa.’s revenue source as the more attractive the Erie area is for visitors and tourists the more future revenue will be enhanced. The Govenor knows that eventually Ohio may push for slots because the racing interest in neighboring states have been hurt. It is in the State of Pa. interest to push for full gaming before Ohio and other states get a foot hold in slots. Erie has beaches, tourist attractions like Waldemeer Park, Splash Lagoon, Family Sports Park, Convention Center, Tullio facility, and many other attractions that will keep visitors in this area longer and already has over 5,500 hotel rooms and growing. Tourism is not the answer to all economic problems but adds to a base of industries like Educational, Medical, Manufacturing and Insurance.
   It looks as if a Comprehensive Master Plan that includes Bayfront Development and Downtown and Midtown re-development should also include the impact of full-gaming to allow for such things as specialty shopping, yacht clubs, hotels and casino’s ON THE LAKE and cruises to Canada as potential future uses as Erie grows into its destiny.

   This is not polyana, altruistic thinking as some may view this post, but vision into the future of Erie as it is happening NOW……

   Commenters like Jim who point out the saturation of places like Vegas and other negative view points fail to recognize the amazing success of a City like Las Vegas, sure it is having the effects of the current economic slowdown but so it the entire world including Erie but we should take this opportunity to plan for our future and await and be ready for the inevitable upturn…it is about PLANNING and implementation of that PLAN and that takes VISION beyond the negative into the FUTURE. Erie is unique, it is not like Atlantic City or Vegas or many other places, it is unique into itself, no other community that I am aware has the unique demographics coupled with the community spirit of this area but it is only as good as the people who get involved and shape its future, the time is NOW join groups like Envision Erie, Erie Young Professionals and other groups and make the difference.

4. TonyF
   November 7th, 2008 at 1:11 pm

   George, your post presents a very valid point very eloquently.

   It may be true that Vegas is feeling the effects of places like Erie getting into the gambling business. It’s certainly cheaper to drive to Route 97 & I90 than to fly to Vegas and pay for hotel and meals.

5. George Vietze
   November 8th, 2008 at 7:43 am

   Radio Free Jo Jo and other have pointed out that Erie has much more to offer than just tourism. I certainly agree that the Erie area has a diverified base to its economy with manufacturing, educational, insurance and other areas that make up its economy as well as a growing tourism industry. I concentrate on the tourism industry because I recognize the immediate potential based upon the demographics of existing beaches, hotels, casino/racetrack that have the potential for growth based upon assets we already have in this area and a critical mass of activities that will allow tourism to flourish.

   I certainly recognize the diversity of Erie’s economy but have heard of many constraints from other commentors as to why the business climate of Pennsylvania and Erie may not be attractive to developing new business and there seems to be a lot of challenges to making this area more appealing to new companies investing in this area.
   My experience is not in manufacturing and I don’t know how to solve the union/management problems, the problems of political background of why the police and firemen do not trust the political situation, high taxes and other disincentives, proposed high cost of energy problems lurking, a $10,000,000 problem the City of Erie has with complying with governent rules to put curb cuts for handicap people or they will lose certain rights with the Federal government and the myriad other ins and out of the political games being played with segmented factions of political interests. In the meantime, it seems to me that tourism does not have a many complexities and this area needs the CASH FLOW.
   i am hopeful that the Chamber of Commerce, Manufacturing Associations and others will work on solving some of the constraints to attracting more manufacturing jobs and other companies that could move here but in the meantime maybe some people consider $40 million dollars a week in gross revenues and $1.5 million in NET REVENUE to the State of Pa. a WEEK pennies, I don’t see many other places pouring that potential into our local economy and I see the State of Pa. gearing up for increasing that cash flow, I see that as a positive
   addition to the lifestyle of the area. Like a lot of other people I see some problems with that much of a concentration of gambling and the negatives that may bring to any community but the entire country seems to think gambling, lotteries, bingo and other such activities as some sort of panacea. I frankly think gambling is a tax on the stupid but it is a personal choice people need to make or not make but Erie can certainly use the CASH FLOW.

   i am all for more high paying jobs, more manufacturing, more hi tech companies but this area needs to implement policies that are attractive to companies or investors to allow that to happen, in the meantime, if other people want to come from Ohio, Canada, New York and other places and leave their money in Erie and keep this area GREEN it seems better to me than everyone leaving town, the grass turning brown as companies leave this area taking the high paying jobs with them. Pennsylvania and Erie need to look at their existing policies and do what it takes to attract more companies and higher paying jobs to this area. This is not to say that our existing representatives are not working hard on solving those problems but that may take a lot more time, in the meantime let the tourism money flow.

6. anonymous
   November 9th, 2008 at 11:07 am

   Sent information to Envision Erie about the Glass Pryramid successful tourist spot in Galveston that generates approximately 2,000,000 tourist per year that has a 10 year track record of profits and have received no response. Galveston was a very depressed area 10 years ago. Even with Hurricane Ike, is attracting tourist from all over the country.
   We have tried the Mayor, Erie Chamber, GEDC and now Envision Erie with no response. Maybe they really do not have any interest in developing the waterfront and creating an attraction that will benefit the Convention Center and Hotel. If anyone has any ideas, please let us know. In our opinion, you can’t live on gambling alone.

7. Chris
   November 9th, 2008 at 11:46 am

   nobody wants a pyramid on the bayfront. I.M Pei has overdone that form for decades. if you were really behind this idea you should put your name behind it as well. otherwise, you could be Rubino.

8. MGR
   November 9th, 2008 at 1:50 pm

   My suggestion for the Glass Pyramid Peddler is that if the project has strong merits that many investors would entertain except the Erie political establishment, then bypass them. They are only involved in the process for good show and do not possess the power or adequate funding to do much about it. On the financial racetrack, govt works better as a guiderail than as a fuel source.

   The building is owned by GAF (or whatever quasi-govt entity they might dump it on) and will be sold to whomever writes the check I believe. Since govt funds are typically used for losing projects no one else will back, not winners, a real private equity/VC group or gambling conglomerate is the correct avenue to pursue. Your research must thoroughly prove probability of demand and success in the Erie market and potential to generate a 35-40% 5-year IRR back to the investors. This is not a great time to find funding, but there are fewer good investments to compete with so your best chance is targeting a group that employs a higher % of equity in their deals. Funding this venture will require diluting your shareholder value due to leverage and in this case probably relinquishing a controlling share of the equity with success kickers, but that is how things are done. Best of luck.

9. George Vietze
   November 10th, 2008 at 3:21 pm

   MGR, i believe you are on the correct track. One of the reasons I have been giving transparency to the projections of the future potential for full gaming is because I believe the Bayfront has the potential of attracting a full pledge Casino/hotel that would have the equity capital necessary to complete a project in Erie, on the Bayfront, that would have the potential of creating serious synergy for a successful Bayfront Development. I believe the GAF building location would be an ideal setting. The Bayfront comprehensive plan should at least be open to that potential as well as other potential as it most likely will take a couple of years before a final plan would take shape, during that time the potential for full gaming could be evaluated. My opinion is that it will take a use with the demand of gaming on a waterfront location with access to over 50% of the population of the United States and direct access to Canada to attract the kind of project that would be successful in Erie because of the seasonal aspect of its climate. I’m sure there are other ideas with strong enough demand but as you indicated the ability to finance projects are becoming more and more important.
   Since the State of Pa. has an interest in the cash flow from gambling that adds another incentive for Harrisburg to particcipate in the re-development potential of Erie. I believe the demographics of Erie
   if marketed nationaly could attract a major gambling company to etner the mix and give the State of Pa. and Erie the incentive for MAJOR redevelopment of its already established assets and provide the synergy to make this development potential happen sooner than later because the State of Pennsylvania is aware of the potential for neighboring states to get the jump on that potlential for Pennsylvania, the Governor is dedicated to updating Pennsylvania to national status both for Casinos and racetracks and Erie could be the Churchill Downs of Pennsylvania and the Bayfront gives Erie the potential for MAJOR casinos with full gaming. Erie has major infrastructure problems and economic challenges and when you heard the Mayor mention at his last news conference that Erie has the potential for major tourism he recognizes and needs the type of cash flow that a project like that would provide as the fastest way to get there. Time will tell.