Stadium Casino wins a $3 million exit to its I-76 on-ramp conundrum

Stadium Casino LLC will be on the hook for five years to pay only $3 million toward the cost of constructing a new Schuylkill Expressway entrance ramp, which the company had promised to build in 2014 when it was awarded the city’s second casino license.

The Pennsylvania Gaming Control Board on Wednesday unanimously approved renewing Stadium’s license, and modified the on-ramp condition to provide the company some clarity over how long it would have to stand by its obligation to improve access to I-76 in South Philadelphia. The modification also puts the onus on government entities to build the on-ramp, not the casino operator.

Casino officials and the gaming board apparently privately negotiated the new terms of the on-ramp promise, which the board approved without comment. The gaming board did not explain how it arrived at the $3 million figure, which is significantly lower than what the casino had initially promised.

During its 2014 licensing proceeding, the casino said it had set aside $19 million to design and build an on-ramp at Seventh Street, near the site at 900 Packer Ave. where it is now building the Live! Casino and Hotel Philadelphia. The Pennsylvania Department of Transportation recently estimated that building an entrance ramp would cost $8 million to $10 million. More recently, during a July 10 hearing, Stadium Casino’s lawyer, Richard W. Hayden, estimated construction costs would amount to only $2 million.

The company’s $3 million obligation will expire if the government does not have an approved and permitted on-ramp project in motion by Aug. 14, 2024, according to the gaming board’s order. It would then be responsible to only fund $1 million in traffic-mitigation projects identified by the company and the city.

The board’s decision resolves a problem that had taken on a life of its own during the company’s license renewal process. Stadium Casino in 2014 had promised to design and build a westbound on-ramp to alleviate traffic congestion. But neither the Delaware River Port Authority, which owns that section of highway, or the Pennsylvania Department of Transportation had agreed upon a plan. The casino said it was not feasible.

» READ MORE: Casino promised a badly needed I-76 on-ramp in South Philly. Now it wants to do a U-turn.

Stadium Casino said Thursday it was pleased its license was renewed.

“The development of a ramp onto I-76W was handled by Stadium Casino putting up the projected cost of the ramp with the applicable governmental agencies responsible for its construction, consistent with the normal procedure and precedent for all other interstate construction in the Commonwealth,” the company said in a statement.

“They got away with not putting in the ramp,” said Ivan Cohen, a director of the Sports Complex Special Services District, the nonprofit group that manages community benefits from the professional sports teams, as well as from the casino. The special services district had argued for the on-ramp.

Neighbors near the sports complex in 2014 pressured competitors for the city’s second casino license to build a new on-ramp on Seventh Street. While there are five on-ramps that take eastbound toll-paying traffic to New Jersey on the Walt Whitman Bridge, there is only one entrance ramp, on Broad Street, that allows motorists to go westbound on I-76 toward Valley Forge. Residents worried that the casino traffic would contribute to the traffic jams that form after games and events at the city’s stadium complex.

Construction of the $700 million casino hotel began this year. The complex is scheduled to open by the end of 2020.

Even with a five-year deadline in place, it is unclear whether government transportation agencies, which are notoriously slow when it comes to planning and designing highway projects, can reach a consensus on the on-ramp project.

The Delaware River Port Authority, the bi-state agency that manages four Delaware River toll bridges and owns the land and highway where the on-ramp would be built, says it is forbidden from contributing any resources to a project that does not benefit bridge traffic. It says it is willing to sell the land for the ramp, as long as it doesn’t have to pay to maintain it.

PennDot is examining the section of I-76 as part of a broader study that it is conducting of the I-95 corridor, which may eventually recommend major changes of interchanges, some of which may require a change of ownership from the DRPA to PennDot. That study is due to be completed next year.

There was practically a zero chance that the gaming board was not going to renew Stadium Casino’s license. The state initially awarded the license to Foxwoods Group in 2006, but revoked its license and launched a second competition that resulted in the award to Stadium Casino in 2014. The project was stalled for three more years by a legal challenge.

The Cordish Group, a Maryland real estate and entertainment company that owns Stadium Casino, this year finally broke ground on the lavish project two blocks north of Citizens Bank Park, which includes a new 200-room hotel.

In addition to the South Philadelphia license renewal, Stadium Casino had a busy day Wednesday before the gaming board.

The board also unanimously approved a “Category 4” satellite gaming license for Stadium Casino Westmoreland RE LLC, an affiliate of Stadium Casino LLC, which plans to open a $150 million gambling facility in a former shopping mall department store in Hempfield Township next year. The site, about 25 miles east of Pittsburgh, will operate as Live! Casino Pittsburgh.

The license was the second of five so-called mini-casinos licensed under a 2017 law expanding gambling. Pennsylvania regulators in June approved Penn National Gaming’s proposed satellite casino in Berks County to attract gamblers from Philadelphia’s growing western suburbs.

This story was updated to include a statement from Stadium Casino LLC.