"The judicial branch obviously overstepped its bounds in this case," says state Rep. Mike O'Brien in the statement. The court's Aug. 22 ruling found that then-Mayor John Street acted properly last December in granting riparian rights via a "submerged lands license" to HSP Gaming LP, developer of the SugarHouse project. Conversely, the court determined that the current mayor, Michael Nutter, erred in revoking SugarHouse's riparian rights on grounds that only the General Assembly has authority to approve the lease of submerged waterfront land to private entities.
The four lawmakers—O'Brien, state Rep. William Keller and state Sens. Vince Fumo and Mike Stack—say they're particularly troubled by the court's claim that the submerged lands license cannot be revoked. "It is a contradiction to say that the city has the authority vested in it to give the license but not take it away," says O'Brien in the statement. "If that is really true, then no one has the authority to protect the public interest."
Fumo charges that the court's decision "has effectively created a special 'casino class' that is treated differently from all other forms of commercial development along the waterfront. It is a class that, according to the court, is immune from making payments to the commonwealth for the land, and unlike all other similar conveyances, it is a class that receives a property right to public lands in perpetuity."
Following the court's decision, Stephen Cozen, attorney for SugarHouse, issued a statement saying that the ruling "validated a position which we and the prior city government always believed was correct." Cozen was unavailable to comment on the four lawmakers' statement by deadline.
Teresa Gillen, Nutter's senior advisor for economic development, tells GlobeSt.com the Nutter administration has reviewed the court ruling. "We're now having internal conversations about it to determine the next steps," Gillen says.
The court's ruling was revealed the day after Foxwoods Development Corp. met with the Nutter administration and Gov. Ed Rendell's office, and later issued a statement saying it had agreed "in principle" to consider alternative sites for its own planned waterfront casino, Foxwoods Philadelphia. A Foxwoods spokeswoman tells GlobeSt.com that relocating the casino would pose obstacles. Both SugarHouse and Foxwoods Philadelphia were the subject of a study ordered by the Nutter administration that concluded the two casinos do not fit in with the vision for redeveloping seven miles of Delaware waterfront. The study, prepared by PennPraxis, a nonprofit urban planning group which also prepared the civic vision for waterfront development, said the two casinos might work better elsewhere.
The Foxwoods spokeswoman says the court's ruling in favor of SugarHouse does not change Foxwoods' position on considering alternative sites, and adds the company has no comment on the call for action issued by O'Brien, Keller, Fumo and Stack. Last April, the court had ruled in favor of Foxwoods Philadelphia, granting it commercial entertainment district status after the Nutter administration attempted to block the project. In July, Foxwoods petitioned the court to appoint a special master who would enforce the Court's April decision; the company spokeswoman says "we are still awaiting a ruling" from the court on that petition.
In common with Foxwoods, the SugarHouse developers have maintained that they will build their casino along the waterfront. However, Rendell is convening a meeting after Labor Day between his administration, the city and HSP to discuss the possibility of resiting, Gillen tells GlobeSt.com.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
