Pittsburgh casino debt downgraded

Oct 6, 2009 3:03 AM
Industry Insider by Ray Poirier |

Rivers Casino in Pittsburgh, Pennsylvania, hasn’t been open for two months and already its debt has been downgraded by Standard & Poor’s.

The property, built by Detroit entrepreneur Don Barden, owner of casinos in Indiana and Nevada, was completed by Holdings Acquisition Co. L.P. after Barden ran out of cash. Barden sold 75% of the casino to a partnership involving Pennsylvania investor and developer, Neil Bluhm.

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In announcing its downgrade of Rivers Casino’s debt to B-minus, Standard & Poor’s cited what it called "weak operating performance."

Since it opened, the casino has failed to produce revenues anywhere near its own estimates or those of proponents.

When the casino license was offered by Pennsylvania gaming regulators, there were several different companies bidding for the rights but Barden’s "Magic Star" was chosen. Barden’s failure to secure financing forced him to sell a major interest to the partnership of Walter Street Capital LLC and High Pitt Gaming LP, a company controlled by Bluhm.

Meanwhile Bluhm was successful in bidding for one of two licenses granted for the Philadelphia area. Foxwoods Investments received the other license.

After much controversy and delays, caused by casino opponents, Bluhm announced that his SugarHouse Casino groundbreaking will take place this week.

The $355 million project will be located on the Delaware River near the city’s Fishtown neighborhood.

Question? Comment? E-mail me at: Ray Poirier