April 24, 2009
By John Byrne and Jon Seidel
Post-Tribune staff writers
INDIANAPOLIS -- Indiana's first land-based casino could take root in Gary near the Borman Expressway under an ambitious 11th-hour plan Northwest Indiana legislators announced Thursday that would pay for a new teaching hospital in the city and other major regional projects using tax money generated at the new gambling emporium.
Proposed amendments to House Bill 1607 would also give Gary unique authority to use money collected from the lease of the Gary-Chicago International Airport on infrastructure improvements and other projects throughout the city.
The bloated legislation also retains its original purpose, to allow creation of a four-county transportation district to govern rail and bus service in Lake, Porter, LaPorte and St. Joseph counties.
But the package took on the feel of a Gary stimulus package at a conference committee hearing Thursday, with local representatives pointing to the struggling city's two casino licenses and its airport as the best assets to leverage as it attempts to remain solvent in the short term and forge a successful future in the long-term.
The proposal is sure to face opposition from some legislators who will wonder why Gary deserves such special treatment in the waning hours of the legislative session.
The casino financing package would require the amounts of admission and wagering tax revenue collected at one of the Don Barden-owned casinos in Buffington Harbor be recorded as of May 15.
Whenever a new casino opened on the south side of the city near Interstate 80/94, any increase in those tax revenues above the May 15, 2009, levels would go to three local projects: a teaching hospital in Gary; the West Lake corridor of the South Shore commuter rail extension, from Munster to Lowell; and the Marquette Plan to clean up and develop the lakeshore.
Those are dollars that would normally go to the state general fund, making it potentially problematic to garner downstate support for the plan.
No public input.
And Rep. Cleo Duncan, R-Greensburg, worried about HB 1607 undergoing wholesale changes without the benefit of the public hearings bills usually receive in the House and Senate.
"It has not passed either chamber and we're down to the nitty-gritty," Duncan said.
Rep. Chet Dobis, D-Merrill-ville, urged Duncan to consider what it would mean to the state if Gary went bankrupt.
"We are trying to help ourselves with this plan," Dobis said. "There are negatives, I concur. But if you want to see negatives, wait till you see the bottom line at the (Distressed Unit Appeal) Board when it reaches its conclusion" on Gary's request for state aid.
Support from Mitch
Gov. Mitch Daniels said this week he would be open to granting Gary the state's first land-based casino.
"As somebody who came late to this party, I've never understood why they have insisted on clinging to the illusion that these casinos are water-based anyway," Daniels said. "So if this is something the City of Gary feels will be helpful to them, I'm certainly willing to look at it."
Then there's the question of who would pay for a new casino in Gary.
Thursday's amendment requires the owner of the license to spend at least $150 million on the facility, though Sen. Earline Rogers, D-Gary, predicted it would cost much more than that to erect a large-scale casino on the expressway.
Barden has had well-publicized money problems lately, and Rogers speculated he might sell the license or seek partners to defray the cost.
Barden said Thursday he hadn't had a chance to see the proposal. He declined to comment on the particulars or whether he plans to sell one of his Gary casino licenses.
"I don't have any plans to do anything about anything at this juncture," Barden said.
Clay lauds plan
Gary Mayor Rudy Clay greeted Thursday's developments as a welcome piece of good news for the beleaguered city.
The casino could generate $240 million over the next decade, Clay said, and the casino-hospital project could create 5,000 jobs.
He praised lawmakers, including his sometime political antagonist, Rep. Charlie Brown, a longtime supporter of a four-year medical school and teaching hospital in Gary.
"For the last two years he has really been on the front lines of pushing and bringing people together for the four-year medical school," Clay said.
HB 1607 started as a far-reaching, controversial plan to create a one-of-its-kind four-county transportation district with taxing powers in northern Indiana.
The transportation language remains in HB 1607, though it, too, underwent significant changes at Thursday's meeting of a bipartisan House-Senate conference committee with less than a week remaining in the General Assembly session.
Rather than separate May 2010 referendums, Dobis proposed a single, regionwide ballot question in November 2010. If a majority of voters in the whole four-county area wanted to participate, all four counties would become members.
Mayors from Gary, Hammond, Valparaiso, Portage, and the four largest cities in LaPorte and St. Joseph counties would sit on the board, which would have the power to levy an income tax up to 0.25 percent in each county to mass transit capital projects and operations.
Daniels would still appoint the ninth member, from among elected officials in the four counties.
"The mayors in all four counties would be more the beneficiaries than the counties," Dobis said.
Contact John Byrne at 317-631-7400 or jbyrne@post-trib.com.