PETERSBURG – Did City Council choose to ignore the advice of its longstanding financial advisor in picking The Cordish Companies as its preferred casino vendor?
According to language in a report Davenport & Co. sent the city on the same day council chose Cordish, the advisor informally said Cordish appeared to be the most financially viable of the five bidders. However, Davenport recommended a list of questions the city ask of all the vendors before it would make “a firm and final recommendation.”
Hours after the report – marked “confidential” but viewed by The Progress-Index – was received, City Council emerged from a 90-minute closed session to discuss the vendors and unanimously chose Cordish. After that vote, councilors adjourned and quickly left the Petersburg Public Library without commenting on the vote. Ward 5 Councilor Howard Myers released a statement praising the choice an hour after the adjournment.
Myers’ statement was included in a release the next day from Cordish announcing the partnership, along with an extensive quote from Mayor Sam Parham, one of the first to leave Wednesday's meeting without comment:
“The City of Petersburg is thrilled to have selected Bruce Smith Enterprise and The Cordish Companies as development partners after a thorough RFP process and extensive review by outside consultants. An important part of our evaluation was to identify a development team with a proven track record in developing and operating mixed-use and casino properties, a long history of revitalizing cities across the country, and strong community engagement practices. Bruce Smith and Cordish’s experience, comprehensive project master plan and visionary approach, ideal site location, robust financial strength, and commitment to swift market entry make them the clear and unanimous choice of both our consultants and City Council. The City has worked very hard to get to this point, and we believe that it is imperative to continue moving this project forward as expeditiously as possible so that we can meet the deadline to get this in front of our citizens for a referendum vote this November.”
The vote drew outrage from Sen. Lashrecse Aird, D-Petersburg. Aird sponsored legislation creating a November casino referendum and hosted an April 14 town hall at the library where citizens heard presentations from the five vendors and asked their own questions.
In a pointed statement Friday night, Aird said council declined to take public input on the decision and chose to “christen an operator that met their personal priorities while deprioritizing positive outcomes for the city.” Cordish, who unsuccessfully paired with the city in the 2023 legislative session to land the casino in Petersburg, is the only one of the five bidders with whom the hospitality-workers union Unite Here Local 25 said it does have a positive labor agreement.
The General Assembly made it clear with Petersburg in the 2024 session that it would be closely monitoring the city’s vendor-choice process to ensure it meets all the necessary criteria for a transparent procedure – including feedback from the hospitality union.
What exactly did Davenport say?
Bally’s, Cordish (and co-developer Bruce Smith Enterprise), Penn Entertainment, Rush Street Gaming and The Warrenton Group were the five companies that responded to the city’s request for bids on a “destination resort” that would include a casino, hotel and entertainment venues.
In the April 24 report, Davenport said of those five, the three most viable were Bally’s, Cordish and Rush Street Gaming. Among those three, only Rush Street Gaming has a Virginia gambling presence with its Rivers Casino in Portsmouth.
Informally, Davenport recommended Cordish after applying three key factors to each proposal: financial stability and likelihood of funding, overall development and investment in Petersburg, and guaranteed upfront and on-time payments benefitting Petersburg’s infrastructure during operations.
Cordish and BSE want to build a $1.4 billion, 92-acre mixed-use community off Wagner Road that would be anchored by the casino, a hotel and entertainment complex. It also vowed to put emphasis on hiring Petersburg residents and choosing Petersburg-based builders for subcontracting on the 15-year project.
“Davenport believes that The Cordish Companies’ proposal ranks first when aggregating the three key factors that we considered,” the report stated.
The company said Cordish’s plan to use its own equity for Phase 1 of the project – building a temporary casino while the permanent location is constructed – made it “the most likely to be operational on time.” Another mitigating factor was Cordish’s promise to pay Petersburg a total of $80 million over the first three years after selection was the strongest of all bidders.
Davenport said it also has a history of connections with Cordish senior leadership “and is most impressed with their financial strength, stability and operational follow-through.”
Finally, Cordish’s co-development deal with NFL Hall of Famer and Virginia native Bruce Smith “is a positive for the proposal and the community” since it represents outreach to “well-respected and well-known minority investors.” That is a nod to Petersburg’s 78% Black-majority population.
Bally’s, according to Davenport, offered a “strong lifestyle proposal” in their offer to build on both sides of Rives Road about a mile south of the Cordish location. Its main strike, though, was the recent downgrade of Bally’s stock amid reports it was having trouble raising capital for a similar resort proposal in Chicago.
Rush Street Gaming “has the financial support of a well-respected and deep-pocketed Midwestern family,” Davenport noted, but its failure to include a hotel with its casino on County Drive made it “considerably more limited in appeal to the city as a “full-service venue.” Rivers Casino in Portsmouth also does not have a hotel despite RSG’s promise to eventually build one.
Davenport qualified in its report that the recommendation was based solely on what each vendor presented and did not involve direct involvement with any of them. With that in mind, the company offered general questions to all five vendors and specific questions to Bally’s, Cordish and Rush Street Gaming.
“Davenport would like to have responses to these questions before presenting a firm and final recommendation to the city,” the report stated.
Petersburg city spokesperson Joanne Williams confirmed Davenport discussed its report with council during the April 24 closed session before council voted.
Two days before the vote, City Manager March Altman sent Davenport some questions for which answers are due May 3, Williams said. The nature of those questions was not disclosed.
Lines drawn
The decision apparently has polarized relations between Petersburg and Aird, and prompted battle lines to be drawn in each camp.
In its resolution choosing Cordish as the vendor, council claimed Aird and her colleagues would withhold support for Petersburg if it did not pick Bally's. A resolution accompanying Cordish's choice said the city was presented with a letter of intent to be signed by Altman and sent to Bally's for its signature, but instead, the resolution said, Altman signed the letter and returned to the sender.
The sender was not identified in the resolution, but city officials insinuated it was Aird.
The letter was dated April 17, the same day as the General Assembly's reconvened session.
Aird downplayed Petersburg’s claims in the resolution that the legislature was forcing the city to choose Bally's. It did not directly address the letter, though.
Cordish has maintained that it has rectified any previous disagreeements with the hospitality union and that everyone gets along now.
In a post on social media network X (former Twitter), Sen. Ghazala Hashmi, D-Chesterfield County, wrote, “Thank you, @lashrecseaird, for standing up for workers and for the Petersburg community. Economic development must mean economic progress for all.”
Meanwhile, Ward 1 Councilor Marlow Jones said he will hold a meeting sometime this week to share everything that has led to the current situation.
“I’m about to tell it ALL!!,” Jones posted on his Facebook page. “Y’all keep thinking city council [sic] is shady. You might wanna look above and beyond reach!”
Last week after the vote, Jones wrote on Facebook, "It is in these moments that we must ground our choices in facts, in detailed analysis, and in the unyielding pursuit of what is right for our citizens, rather than being swayed by mere promises or transient trends." He added that had council not acted when it did, "all would have been lost."
City Council has scheduled another closed session for May 1. Virginia Code Section 58.1-4109, which addresses the choice of a preferred casino vendor, is cited on the meeting agenda as one of the reasons for the meeting. Williams said she did not know what casino-related business was up for discussion then.
Bill Atkinson (he/him/his) is an award-winning journalist who covers breaking news, government and politics. Reach him at batkinson@progress-index.com or on X (formerly known as Twitter) at @BAtkinson_PI.
Most Popular
Comments / 0