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March 28, 2013

Ohio’s demands to delay Penn National progress

NEW CASTLE — Penn National Gaming will have another six months to meet Ohio Racing Commission demands.

In a special meeting yesterday, commission members asked Penn National to redesign the $125 million racetrack set for Austintown.

The redesign — which adds more seats — could take four to six months Penn National spokesman Bob Tenenbaum said.

He called the meeting “disappointing.”

Penn National had anticipated that yesterday, the commission would approve its request to relocate two racetracks. The delay effectively postpones the construction schedule and planned opening of the Austintown track, which had been anticipated for spring 2014, Tenenbaum said.

“We were two weeks away from awarding significant $4 million contracts for the first foundation work and the structural steel.”

The Pennsylvania-based gaming organization, which operates 27 holdings in 18 states and Canada, plans to move a thoroughbred racetrack from Columbus to Austintown and a harness track from Toledo to Dayton. Penn National will pay $75 million to relocate each track. It also anticipates paying a $50 million licensing fee to the Ohio Lottery Commission for each track to include video lottery terminals, similar to slot machines, at the sites.

Tenenbaum said yesterday was the first time the commission had given a number that would satisfy them.

“We submitted our first plan in November and waited until February for a hearing,” he said. “At that time, they said there were not enough seats.”

Tenenbaum said the number of enclosed seats was doubled, additional outdoor seating was planned and the design resubmitted for the commission’s March 12 meeting. Seating was increased again last week and for yesterday’s meeting.

“We didn’t know what they wanted until today.” he said. The racing commission wants 1,168 seats from which patrons can see the entire race, he said.

“There is no way to satisfy the higher number of seating in the building in its current design.”

Tenenbaum said the local market and racing season were among factors considered when designing the facility.

“Penn National is the largest operator of pari-mutuel racing facilities in the United States,” he said. “We believe we had a good basis for making the choices we did.”

He added that if the commission had approved the existing plan, “We would have been glad to come back in a year to say we need a larger facility.”

Tenenbaum said he believes the seating figure “is an arbitrary number.

“Not only will the building have to be completely changed, we will also have to return to Austintown Township and Mahoning County and reopen the permitting process.”

Similar demands were made for the Dayton project and more stalls were requested for the horses.

The commission meets again April 18. Tenenbaum said he does not anticipate redesign plans will be completed by then.

He said the Ohio Racing Commission did not raise the topic of Penn National participating with Endeka Entertainment to manage the harness track/casino planned for Lawrence County, an arrangement said to be in negotiations.

He noted that if the Pennsylvania track goes forward while the Austintown plans are under redesign, “that could change the dynamic. We were confident that (the Austintown track) would be the first to open and thereby have the advantage. We never saw this (delay) coming up.”

Tenenbaum said Penn National is still committed to the Austintown and Dayton projects.

He once again declined to comment on possible negotiations with the Lawrence County project, saying, “As a policy, we don’t comment on ongoing discussions or speculations.”


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