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Norfolk, VA

Waterside developer sues Norfolk over Pamunkey casino, says city broke agreement

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Virginian-Pilot
Virginian-Pilot
 2021-06-17
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The developer behind the revamped Waterside has sued the City of Norfolk. Sandra J. Pennecke / The/Virginian-Pilot

The developer behind the revamped Waterside has sued the city of Norfolk, alleging it has broken an agreement to help build a casino at the entertainment center and carried out a conspiracy to ensure the company could never get one there.

Cordish, the Baltimore-based developer, agreed in 2013 to overhaul the ailing Waterside through an LLC named Norfolk District Associates. The company argues in the suit filed June 15 that it would never have taken on the risky and expensive endeavor if the city hadn’t also agreed to support a casino from Cordish once the state opened up casino gambling, which didn’t happen until 2020.

But now, Cordish is accusing Norfolk of using workarounds to cut the company out as the city courted the Pamunkey Indian Tribe and its billionaire backers to build a casino instead.

In the filing in Richmond Circuit Court, the company is demanding $100 million in damages, on top of punitive damages, lawyers fees and more.

The suit says the city breached the contract as soon as it approached the tribe in 2018 about building a tribal casino in Norfolk. That plan was made public in December 2018 and set off a fervor at the state capital to address, and eventually legalize, commercial casinos in the state.

Since then, the Pamunkey Indian Tribe and its backers have secured state approval to open the Headwaters Resort and Casino near Harbor Park — less than a mile from Waterside.

The suit takes particular aim at longtime Norfolk City Attorney Bernard Pishko, who the suit says personally negotiated both the deal with Cordish for the Waterside redevelopment and the casino deal with the tribe.

The filing contends that the city and Pishko breached contract terms, tried to hide it, refused to work with Cordish and directed lobbyists to push legislation specifically meant to exclude Cordish and the Waterside location from ever being the site of a casino.

The filing says Pishko overstepped his authority and that he boasted to Cordish representatives he was the “real mayor” of Norfolk.

“Mayors and Council persons come and go, and in reality ‘[I am] the Mayor,’” the filing says, quoting Pishko.

The lawsuit says the city went so far as to lobby to add a clause to the state legislation at the tail end of the 2020 legislative session specifically designed to cut Cordish out. The last-minute amendment to prohibit construction of a casino on property owned by a housing authority, the suit says, “was solely done in a pathetic attempt to ‘fix’ the city and NRHA’s breach of (Cordish’s) Lease Agreement.”

The Norfolk Redevelopment and Housing Authority took ownership of the Waterside property in 1999 and now leases it to Cordish’s limited liability company.

The suit goes on to say Pishko and the city then tried to cover up the scheme by amending the exclusivity deal with the tribe to only be effective as far as it didn’t interfere with the Cordish contract — months after the city had lobbied for the housing authority clause that excluded Waterside from contention for any casino approvals.

“In other words, after the city thought the enacted legislation would prohibit (Cordish) from developing a casino at the Waterside District, the City made a cosmetic attempt to cure its blatant breach of the Lease Agreement,” the filing says.

Pishko and the city have long maintained that the deal with the Pamunkey did not breach the contract with Cordish and that it had no legal responsibility to aid Cordish in securing a casino.

The company first threatened to sue Norfolk over a year ago. In the meantime, Cordish secretly backed a citizen group opposed to the voter referendum last November that secured the tribe’s ability to build a casino in Norfolk, which voters overwhelmingly approved . It renewed its legal threats after the election, but only just filed its suit this week.

Ryan Murphy, 757-739-8582, ryan.murphy@pilotonline.com

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