NEW CASTLE —
Carmen Shick is still in the hunt for a harness track for Lawrence County.
And a casino to go with it.
But the local developer is up against interests who appear to be determined to move the track elsewhere.
At an Oct. 20 auction to sell the assets of Valley View Downs, the proposed harness track and casino in Mahoning Township, Shick and his company, Bedford Development Management, submitted the highest bid — $7 million.
Attending the auction via telephone, Shick offered a non-refundable bid of $1.3 million up front followed by $4.2 million at closing — expected to be Dec. 13 — plus an additional $1.5 million to be paid on the one-year anniversary of the grand opening of the racetrack/casino.
Pittsburgh-based American Harness Tracks, submitting a bid of $5.6 million, was deemed the successful bidder by attorney Gerald Uzzi who conducted the auction.
American Harness Tracks offered $1.3 million to be placed in escrow and $4.3 million at the closing for the “as is-where is” racetrack to be located in Mahoning Township. The newly-organized group includes attorney Charles Knoll, son of the late lieutenant governor, Catherine Baker Knoll.
However, comments made during the bidding process suggest part of American Harness Tracks’ goal is to transfer the license to another area, possibly near Johnstown.
The bid is pending approval of the U.S. Bankruptcy Court.
After conferring with Centaur and its financial adviser, Innovation Capital, Uzzi announced American Harness Tracks as the winning bidder, saying the creditors would not agree to “value deferred considerations” as part of the price. This placed Shick’s bid at $5.5 million.
Shick said yesterday he will continue to pursue the matter. He anticipates filing an objection to the auction results with the U.S. Bankruptcy Court in Delaware.
The deadline for filing is tomorrow.
SHICK SHOCKED
“I was shocked when the bidding ended,” he said. “I had expected it to continue. We believe that we offered the higher bid. I was shocked when it was awarded to American Harness Tracks.”
Shick said Uzzi had not announced that after-bid offerings would not be considered.
“I had expected (this bidding) would continue after the money available at the closing was exhausted. I had been prepared to continue the post-closing bidding.”
He noted that the $4.3 million bid due at closing is predicated on all hurdles being cleared. This includes approval by the Pennsylvania Harness Commission and lining up investors and financing.
“In this (economic market) nothing is a sure thing.”
He declined to share more of his plans, noting a confidentiality agreement with Centaur and the courts prevents it.
The position of Centaur and Innovative Capital Investment Bankers rejecting value deferred consideration is particularly surprising because the duo had accepted that condition earlier this year.
In July, Centaur sold its Fortune Valley Hotel and Casino in Central City, Colo., to Michigan-based Luna Gaming for $10 million — $7.5 million in cash and a $2.5 million promissory note to be paid over five years at 6.5 percent interest. That sale and those conditions were approved Aug. 25 by the bankruptcy court.
TRANSCRIPT CITED
Four bidders participated in the Oct. 20 auction — American Harness Tracks, Bedford, Western P. Gaming Ventures and Merit Management Group who, according to a transcript of the proceedings, partnered with Bedford.
According to the transcript, all four initial bids were rejected by Centaur and bidders were asked to “improve their offers.”
American Harness Tracks was identified as the front-runner initially sweetening its bid to $3.5 million but proposing to eliminate language in the agreement requiring the track and casino to be located in Lawrence County.
After Bedford’s attorney pointed out the track license issued in 2007 by the state harness racing commission is “site specific,” the “as is-where is” language remained. However last summer, the corporation indicated it would prefer to build a track/casino near Johnstown. The two traded bids until the American Harness offer was accepted.
Shick said he maintains his initial goal. “We want to keep the track in Lawrence County.”
SAINATO SPEAKS
State Rep. Chris Sainato is less concerned the location of the racetrack/casino will change.
“The bid was ‘as is,’” he said. “It is still ours. It is site specific for Lawrence County.”
He said American Harness announced last summer it wanted to obtain the license then move the facility to Johnstown, “But things have changed,” he said. “Now they appear to be the winning bidder for a racetrack in Lawrence County. That is what they bought.”
Sainato said the harness commission will make the final call. Relocating the site will not be easy, he said.
“Our job is to welcome them to Lawrence County,” he said. “We want them to want to come here.”
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