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Tag: Bruce Smith

Petersburg casino passes with 81% of unofficial vote

Updated Nov. 6

More than 80% of Petersburg voters said yes to the city’s casino referendum, according to unofficial Election Day results from the Virginia Department of Elections, as of 9:45 p.m. Tuesday.

The vote gives a green light to Cordish Cos.’ $1.4 billion Live! Casino & Hotel, set to be built on an undeveloped 100-acre site off Interstate 95 in Petersburg. It is the fifth casino voters have approved in Virginia, where casino gaming facilities were legalized by the General Assembly in 2020 with the requirement that local voters pass a referendum in support of a casino.

According to the Virginia Board of Elections’ unofficial tally Tuesday night, 10,265 voters selected “yes,” compared to 2,325 people voting no.

“We are deeply gratified by the community’s affirmation of this project and very hopeful about the meaningful impact it will have on the city’s future,” Virginia Beach developer Bruce Smith, co-developer of the project, said in a statement Tuesday. “The casino will not only create good-paying jobs for our residents but will also attract visitors statewide and beyond, stimulating local businesses and in turn producing an overall ripple effect of economic growth. Now that the voters have spoken, we look forward to working with the City of Petersburg and the Virginia Lottery to secure all of the necessary permitting, licensing and regulatory approvals for this project to move forward.”

Developers said earlier this year that the Petersburg casino resort would be built in phases. The first phase would include a 200,000-square-foot casino, featuring 1,000 slot machines and 23 table games. The full 400,000-square-foot project, to be completed two years after approvals, would include a 200-room hotel, 1,600 slot machines, 46 live-action table games, a 3,000-seat entertainment venue and eight food and entertainment establishments, three of which would be reserved for Petersburg businesses. Smith said he anticipated 1,500 jobs with average salaries of $70,000, and an estimated $240 million in local tax revenue in the first 10 years. In a news release Tuesday, the developers say they expect the project to create 6,000 construction jobs and 1,500 permanent jobs.

Virginia has three operating casinos: Rivers Casino Portsmouth, the state’s first permanent casino; the Caesars Virginia temporary casino in Danville; and the temporary Bristol Casino: Future Home of Hard Rock, which opened in Bristol in July 2022. The permanent $515 million Hard Rock Hotel & Casino Bristol is set to stage its grand opening Nov. 14, and according to Caesars Virginia officials, the permanent, $750 million Danville casino is expected to open in December. Meanwhile, the Pamunkey Indian Tribe and Boyd Gaming broke ground in October for the long-delayed Norfolk casino.

All four of those casino projects were passed via local referendum in 2020, but Richmond voters rejected the Urban One casino project in 2021 and 2023 votes. Earlier this year, Virginia General Assembly lawmakers passed legislation that gave Petersburg a chance to host a casino, pending voters’ approval of a referendum on the November ballot, and barred Richmond from a third try. The state’s casino laws cap the number of casinos to one per city in five designated cities: Bristol, Danville, Norfolk, Portsmouth and now Petersburg, which replaced Richmond.

Baltimore-based Cordish Cos., which was among competing casino developers in Richmond, and Smith, a NFL Hall of Fame member and owner of Bruce Smith Enterprise, teamed up to vie for the opportunity to develop a casino in Petersburg. Five development groups put in bids, and in April, a controversy erupted when Petersburg city councilors accused Petersburg-based state Sen. Lashrecse Aird, who sponsored legislation to hold a casino referendum vote in Petersburg, of pressuring city officials to choose Bally’s Corp. as developer.

Aird disputed the allegation, and Petersburg City Council ultimately chose Cordish as the casino’s developer. In 2022, the Petersburg council voted to approve Cordish as a potential casino developer, as Petersburg officials began trying to win state approval to hold a casino referendum there following the casino’s first defeat in Richmond.

“The approval of the destination resort and casino in Petersburg marks a significant milestone for our city,” Petersburg Mayor Sam Parham said. “Voter approval follows a three-year journey on this transformative project that will bring positive change to Petersburg for generations. This destination resort, casino, retail and residential development will be the largest economic and tourism project in Petersburg’s history. City Council and administration look forward to working with the Cordish Cos. and Bruce Smith Enterprise to positively impact our community and its prosperity.”

According to the Virginia Public Access Project, the pro-casino Vote Yes Petersburg committee funded by a Cordish limited liability company spent more than $1 million this year on its campaign to pass the referendum, with the majority of money going toward campaign marketing materials and advertising. Unlike in Richmond, there appeared to be no coordinated opposition campaign against the Petersburg casino.

Petersburg casino competitors roll out details

More details have rolled in about the five Petersburg casino contenders, all of whom presented their plans during a town hall Sunday at the Petersburg Public Library.

Hosted by state Sen. Lashresce Aird, D-Petersburg, the town hall saw officials representing Bally’s, Cordish Cos., Penn Entertainment, Rush Street Gaming and The Warrenton Group reveal more details about their casino proposals, even though the city doesn’t yet have the state legislature’s go-ahead to include a casino referendum on this fall’s ballot.

Virginia Beach developer and NFL Hall of Famer Bruce Smith, who is partnering with Cordish, has called on Virginia House of Delegates Speaker Don Scott to expedite an amended bill allowing a referendum this year instead of requiring a second General Assembly vote in 2025, which would delay construction of a casino by at least a year.

“Now’s not the time to play politics with the people of Petersburg,” Smith said in an April 12 interview with Virginia Business.

The state legislature meets in Richmond on Wednesday to vote on the 2024-26 state budget and other bills amended by Gov. Glenn Youngkin, who removed the reenactment clause from the casino bill, allowing a 2024 vote.

Here are the five prospective casino developers and their proposals, of which the Petersburg City Council may green-light one for development as soon as this summer:

  • Bally’s, a major national player in the casino industry, previously vied for the Danville casino (which Caesars Entertainment ultimately won) and a proposed Richmond casino, ultimately losing to Urban One in 2021. The proposed Bally’s resort, with a casino, 500-room hotel, restaurants and entertainment space, would be on Rives Road near Interstate 95, and officials say 15% of the casino’s equity would go to local people.
  • Baltimore-based Cordish, which competed unsuccessfully to build a casino in Richmond in 2021, received Petersburg City Council’s approval for a $1.4 billion casino development in 2022, but without state approval, that project was null and void. This year’s proposal is similar to the company’s earlier proposal, Smith says, and would include 400,000 square feet of gambling, hotel and dining space, as well as a 3,000-seat entertainment venue. To be built on 90 acres at the intersection of Wagner Road and Interstate 95, the venue would be known as Live! Casino & Hotel Virginia.
  • Rush Street Gaming is the Chicago-based company that operates the Portsmouth Rivers Casino, the first permanent casino to open in Virginia. Its proposed Petersburg resort would include a casino, hotel, business and entertainment space, possibly off County Drive.
  • Penn Entertainment is based in Pennsylvania, and its focus is on “community casinos,” as opposed to those based in Las Vegas and Atlantic City. Its proposal includes a 200-room hotel, an 8,000-capacity amphitheater partnered with Live Nation, in addition to a casino and ESPN sportsbook.
  • The Warrenton Group is a Washington, D.C.-based business developer that has an agreement with casino operator Delaware North and the Upper Mattaponi Tribe, based in King William County. Its proposal is significantly different from the other four, as development would be in two different parts of Petersburg. A 160,000-square-foot casino and 200-room hotel, as well as restaurants and housing units for casino employees, would be at the “Southern Gateway” location off Route 301, and a second phase, known as the “Northern Gateway” on the waterfront of Pocahontas Island, would include a 100-to-150-room hotel, 120,000 square feet of retail and housing for Virginia State University students.
Rendering of Cordish Cos.’ proposed Petersburg casino development, which would include retail and residential buildings. Image courtesy Cordish

Who’s involved

Smith, who played defensive end for the Buffalo Bills and the Virginia Tech Hokies football teams, was on hand at Aird’s town hall. He said that the Cordish ownership team would have 50% minority equity participation, more than the other development teams vying for the opportunity to develop a casino in Petersburg and, if successful, it would have the largest minority equity participation in a U.S. casino. Other investors are former Philadelphia Eagles and University of Virginia All-American receiver Billy McMullen, former Cox Communications executive Gary McCollum and the Reynolds family, which founded Reynolds Metals.

The Warrenton Group’s alliance with the Upper Mattaponi Tribe distinguishes it as the only proposal with a federally recognized Indian tribe. U.Va. basketball legend Ralph Sampson, a Harrisonburg native whose mother attended VSU, and VSU President Makola M. Abdullah wrote letters to support the project known as Gateways2Petersburg.

Rush Street said in its presentation Sunday that its casino, if chosen, would have up to 40% minority investment and ownership.

There have been Black-owned casinos in the U.S. before, most notably by the late Don H. Barden, who owned resorts in Pittsburgh, Las Vegas, Colorado and Mississippi. In 2021, Maryland-based Black-owned media company Urban One promoted its Richmond casino as being the only Black-owned casino currently operating in the U.S., although the proposal failed in a city referendum. Its 2023 proposed venture was a 50-50 collaboration with Churchill Downs, and that referendum also failed, opening the doors to the possibility of a casino in Petersburg.

In 2020, the state legalized commercial casinos to be built in five economically underserved cities: Bristol, Danville, Norfolk, Portsmouth and Richmond. The first four cities passed casino referendums easily in 2020, but Richmonders voted down casino referendums in 2021 and 2023. Petersburg’s process would be similar to the other cities’ processes, requiring the city council to choose a casino operator and a city referendum to win in either 2024 or 2025 for the plan to move forward.

 

Bruce Smith teams with Cordish on Petersburg casino plan

Virginia Beach developer and NFL Hall of Famer Bruce Smith is vying for the chance to develop a casino in Petersburg and has joined forces with Cordish Cos., the Baltimore-based entertainment company that has already made inroads in Virginia.

There’s just one obstacle facing Smith and other prospective developers, including Bally’s, Penn Entertainment, Rush Street Gaming and D.C.-based Warrenton Group: a piece of legislation awaiting action by the Virginia General Assembly. Virginia State Senate Bill 628 replaces Richmond with Petersburg in the state’s list of cities eligible to host a casino, clearing the way for a casino referendum to be held in Petersburg.

However, the House of Delegates added a reenactment clause to the bill’s wording at the last minute, which would require next year’s General Assembly to take up the bill and vote for it a second time before Petersburg can move forward with a referendum vote — a move that would delay the development of a casino there by at least a year.

Gov. Glenn Youngkin removed the reenactment clause and sent the bill back to the legislature, which will vote on his amended bills April 17. If the General Assembly leaves the bill as-is, Petersburg will likely hold a referendum this fall — and that’s what Smith hopes will happen. He says Petersburg is ready and needs the economic benefit of a casino sooner rather than later.

“Now’s not the time to play politics with the people of Petersburg,” Smith said this week in an interview with Virginia Business, directing his remarks toward House Speaker Don Scott. “They need this economic development opportunity — more so than any other city in the state of Virginia. This is a critical time. That is costing the city money [and] jobs, trying to alleviate the problems of food deserts [and] underfunded schools. We can’t allow folks to say one thing and do another. The time to act is now, and all we’re asking for is to … take the reenactment clause right out of the bill.”

The former defensive end for the Buffalo Bills and Virginia Tech Hokies plans to unveil details of his and Cordish’s casino proposal Sunday at the Petersburg Public Library. The proposed casino will be similar to a $1.4 billion development submitted in 2022 by Cordish and approved by Petersburg City Council in a nonbinding agreement — which became null and void because Petersburg did not receive legislative support to hold a casino referendum that year. Smith, who collaborated with Cordish on a failed Richmond casino proposal in 2021 but was not part of the 2022 Petersburg bid, said the new proposal is “similar, with some tweaks.”

While he will disclose more details Sunday, Smith said “the structure of the deal in itself” will be different. “I will discuss those details on Sunday at the town hall, and they will be groundbreaking — and I think it will be breaking news.” Smith said he became interested in working in Petersburg after a visit with other NFL all-stars a few years ago to a local school and seeing room for economic improvement.

As in the 2022 proposal, the Cordish resort would be built on 90 acres at the intersection of Wagner Road and Interstate 95, and the casino would be “just one component in this massive development,” Smith said, including a 3,000-seat theater among residential, office and retail buildings on the site. He says his team expects to create 7,500 jobs total, including construction jobs, and produce about $2.8 billion in economic impact for the city over the casino’s first 10 years in operation, according to a CNBC interview he gave about the venture this week.

Smith says that his status as a born-and-bred Virginian — having grown up in Norfolk, graduated from Virginia Tech and moved to Virginia Beach to start his real estate business — is a major point in his favor.

Bruce Smith Enterprises, based in Virginia Beach, has previously developed hotels in Washington, D.C., and Virginia Beach in partnership with Armada Hoffler, and Smith is involved in projects slated for Virginia Beach’s Rudee Loop and a 287-unit apartment complex in Norfolk.

He also says that his development team would focus on making sure there is robust local participation in the project, noting that in some majority Black cities that host casinos, participation from investors of color is minimal. “Historically, when opportunities for major developments have taken place, Virginians have either been shut out, or given such a small percentage, even in areas that are disenfranchised,” he said. Petersburg’s population is about 77% African American, Smith notes.

“First and foremost, this is about the citizens and the city of Petersburg, a city that has been ignored and disenfranchised for three generations, to be quite honest,” Smith said. “A city with historically high unemployment, poverty, food deserts [and] underfunded schools, just to name a few problems. This city needs this economic engine more than any other city. It’s time to put Virginians first.”

Meanwhile, the Smith-Cordish plan is not the only one under consideration; four other prospective developers have applied for consideration:

  • Bally’s is a major national player in the casino industry and has previously vied for the Danville casino (which Caesars Entertainment ultimately won), but according to news reports, the company also is struggling to raise capital for a new resort in Chicago;
  • Rush Street Gaming is the Chicago-based company that operates the Portsmouth Rivers Casino, the first permanent casino to open in Virginia;
  • Penn National Gaming is based in Hollywood, and its focus is on “community casinos,” as opposed to those based in Las Vegas and Atlantic City;
  • The Warrenton Group is a Washington, D.C.-based business developer that has an agreement with casino operator Delaware North, but the Warrenton Group itself is a new entrant to the casino industry.
Rendering of a proposed Petersburg casino from 2022 that is expected to be similar to the 2024 proposal. Image courtesy The Cordish Cos.

Cordish pitched a $600 million hotel and resort casino in 2021 in Richmond’s North Side that would have featured a live music hall, but ultimately a plan proposed by Urban One on the city’s South Side won approval from the city. Cordish also sued the City of Norfolk in 2021 for $100 million alleging the city government breached its contract with the company, in which Cordish said it agreed to develop the Waterside District in exchange for the exclusive right to develop and operate a casino in Norfolk — although at the time casinos were not yet legalized in Virginia.

Instead, Norfolk reached a deal with the Pamunkey Indian Tribe to develop the HeadWaters Resort & Casino with Tennessee billionaire investor Jon Yarbrough. Cordish’s lawsuit was dismissed by a Norfolk circuit court in 2022, and the state Court of Appeals upheld the lower court’s decision last month, but there is still a possibility that another entity will take control of the long-delayed HeadWaters project.

According to an April 4 Virginian-Pilot story, Norfolk city leaders are considering the possibility of partnering with a developer other than the tribe and Yarbrough. Under the casino referendum passed by city voters in 2020, the development team is required to obtain a gaming license within five years, or by November 2025. To do so, developers needed to begin construction of the permanent casino by this spring, a casino spokesperson said previously. Smith said it’s possible that he and Cordish would enter the running if the city opens the field to other casino developers.

“If there’s an opportunity that exists in Norfolk, in my hometown, after we take care of Petersburg, we will certainly address that opportunity if it arises,” Smith said, while noting, “first and foremost, our focus is on Petersburg.”