Monday, April 08, 2002

Covington casino a long shot

Opposition to more gambling must be overcome

By Patrick Crowley
The Cincinnati Enquirer

        COVINGTON — Talk about long odds. High-profile Northern Kentucky developers Jerry Carroll and Bill Butler have floated the idea of building a casino complete with hotel rooms, live entertainment, shopping, housing and parking for 5,000 cars on the Covington riverfront. But the pair and the idea face some tough obstacles before slots, blackjack, craps and cards can be played in a Vegas on the Ohio setting. Consider:

        • Casino gambling is illegal in Kentucky. A law that would allow racetracks to offer video gambling — slot, blackjack and other games played on a computer screen — has died without a vote in the Kentucky General Assembly.

        Mr. Carroll and Mr. Butler say they will lobby lawmakers to legalize gambling in the 2003 legislative session.

        There is a chance that pro-gambling Gov. Paul Patton could call a special session to address the issue before 2003, but anti-gambling lawmakers have threatened to vote to end such a special session moments after it begins.

        • While the debate in Frankfort has resulted in some public and legislative warming to legalized gambling, the opponents also have been mobilized to halt any expansion of gambling.

        • Kentucky's thoroughbred racetracks have pushed video gambling in Frankfort as a way for the horse industry to compete against riverboat casinos in Indiana and Illinois.

        And while the Butler-Carroll plan would include casinos as well as video gambling at racetracks, the horse industry may come back next year for another try at winning approval for legalized gambling.

        If that happens, the tracks would likely oppose Mr. Carroll and Mr. Butler.

        “They know as well as anybody that any expansion of gambling is going to be a tough sell in this state,” said Fort Mitchell lawyer and investor Lanny Holbrook.

        “To pass something like this, you need support from all over the state, and that's hard to do,” he said.

Heavyweights in power

        A Bluegrass State Poll, conducted by the Louisville Courier-Journal, found that while support for casino-style gambling was 72 percent among those polled in Northern Kentucky, the approval rating hovered at only 50 percent in the southwestern portion of the state, home to many powerful lawmakers.

        But Mr. Holbrook, political adviser to Gov. John Y. Brown during the 1970s and 1980s, likened the move toward gambling to how the lottery won approval in Frankfort in 1988.

        “There was a lot of initial resistance to the lottery, but after people realized it was a fact of life in most of the states around us, then the state legislature saw the wisdom of joining the crowd,' Mr. Holbrook said.

        They're long odds, but Mr. Butler and Mr. Carroll have won at the high-stakes table before.

        Mr. Carroll owned Turfway Park for 13 years. He sold the track three years ago to develop the $150 million Kentucky Speedway in Gallatin County.

        He also has developed hundreds of thousands of square feet of office, commercial and retail space in Northern Kentucky and Nashville, Tenn.

        Mr. Butler developed RiverCenter, a collection of high-rise office buildings, hotels and luxury condos in Covington.

        Through his Corporex Cos., he has built office buildings, industrial space and health clubs throughout the Tristate and across the country.

        “If anybody can get it done, can build a casino in Northern Kentucky,” said developer Richard Crist of Boone County, “it's Jerry Carroll and Bill Butler. They have the track record of getting things done where others have tried and failed.”

        In March, Mr. Butler and Mr. Carroll were given permission by Covington city leaders to conduct a feasibility and market study for River West, a 15-acre tract of mostly vacant land along the Ohio River between the Clay Wade Bailey and Roebling Suspension bridges.

        Covington leaders such as Mayor Butch Callery have shown some enthusiasm for the casino plan because of the tax money it could generate.

        The developers have offered no estimates on how much revenue a riverfront casino would generate. But the Argosy casino in Lawrenceburg, Ind., paid $91.6 million in state and local taxes last year, according to the Indiana Gaming Commission.

        “That kind of money could fix a lot of streets, build a lot of parks, fill a lot of holes in our budget,” Mr. Callery said.

        But the idea of a casino on Covington's riverfront is so radical and untested that some in the development and business community are wondering if the proj ect would be a success and welcomed by others in the city.

        “It would certainly change the face of Covington,” said lawyer Greg Shumate, who heads the Advocacy Committee at the 200-member Covington Business Council, the city's largest business group.

        “We're going to poll our members to see where they stand. I'm not against gambling, but I think it's questionable if you can get anything through the legislature,” said Mr. Shumate, who is chairman of the Kenton County Republican Party.

        Commercial real estate broker Chuck Eilerman, who is active in Covington neighborhood issues, said the notion of a casino in an urban setting is largely untested.

        “Other than Las Vegas and Atlantic City, most casinos are located in mostly rural areas or small towns, like the riverboats in Indiana,” said Mr. Eilerman. “I think there will have to be a lot of investigation and study into how a casino would fit in an urban neighborhood like Covington.”

        Wally Pagan, president of Southbank Partners in Newport, a group that promotes development in the river cities, said a casino would certainly draw people to the riverfront.

        “But I don't know how much it would really help the riverfront,” Mr. Pagan said. “I'm just not sure it fits in with what else is going on along the river and in that part of Covington.”

        Cincinnati lawyer Stan Chesley, who considers Mr. Carroll one of his best friends, predicted that a casino will eventually rise from the riverfront because of gambling's popularity.

        “It just makes sense,” Mr. Chesley said. “And not just for Kentucky, but for Cincinnati as well. It would draw a lot of people to the area who are going to Indiana now to gamble and spend money.

        “Let's keep it here, and you do that by building something that is just not gambling but an entertainment center,” Mr. Chesley said.


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