My last employer in Philadelphia was the Pennsylvania Real Estate Investment Trust (PREIT). At the time, the CEO was well known local developer Ron Rubin. I shall research another post on WHY Ron Rubin became a famous local developer, because I believe that's also an interesting story and might have something to do with bankruptcy. Anyway, some years ago Pennsylvania legalized non-table gambling, and Philadelphia decided to allow slot parlors. The first project was a SugarHouse Casino on Columbus Blvd in north Philly. The second project was a Foxwoods Casino in south Philly. Ron Rubin had some of my colleagues in the Development department and the finance department running numbers and wheeling and dealing to get a piece of that action. For a hot second I actually worked on alternative site locations for the casino - the shopping mall I was working on renovating had a nearly empty third floor that we thought might make money as a slot parlor. (Side note: never build a three-story shopping mall). However, that proposal was just a Trojan Horse to get PREIT to the negotiating table with the people who were going to front the $50M gaming license fee; nobody expected my project to get the casino, and it only cost us a couple grand to have the architects mock up some drawings and floor plans.
Anyway, Ron eventually made an investment in the project. The final location is a spit of empty, overgrown land at the site of an old pier warehouse that was demolished decades ago. The site is an environmental disaster and a real liability for the owners, who have hard times keeping people out, and yet it's on a pier and the waterfront so it has substantial taxes still. It's like a black hole for money. It's also adjacent to the backside of a Home Depot and a Walmart, and which shares a parking lot with the grocery store I used to shop at when I lived in that area.
The project is in bankruptcy. Apparently my lawyer (Obermayer) is a creditor (my lawyer does M&A and bankruptcy work as his day job, so he might actually be involved!), and my former boss (Ron Rubin) is one of the equity investors. The project's gaming license was revoked, but the State kept the $50M gaming license application fee. Apparently the partnership wants that $50M back, claiming it was a contingency fee, not a sunk fee.
Here's the link:
http://www.philly.com/philly/news/breaking/20140402_Partners_in_failed_Foxwoods_casino_file_for_bankruptcy.html
Here's the map:
https://www.google.com/maps/place/S+Christopher+Columbus+Blvd+%26+Tasker+St/@39.9273951,-75.1449944,17z/data=!3m1!4b1!4m2!3m1!1s0x89c6c8a56fa44993:0x97dc2a4b5bdf5160
No comments:
Post a Comment