New Castle News

April 10, 2013

Citigroup to underwrite county’s track financing

Mary Grzebieniak
New Castle News

NEW CASTLE — Citigroup has been chosen to underwrite the county’s share of financing for the racetrack/casino proposed for Mahoning Township.

The bank will issue bonds or notes to finance part of the $400 million project proposed for Lawrence County.

At their meeting Tuesday, the county commissioners said Citigroup Global Markets Inc. had the best proposal for debt financing for the county’s pledge of $50 million in anticipated revenues from the racetrack. It has the additional advantage of having offices in Philadelphia, where the racetrack project owner, Endeka Entertainment, is based.

Three other financiers submitted proposals and the commissioners met with all of them before making their decision.

The commissioners plan to pass a resolution at Tuesday’s meeting recommending that the Lawrence County Industrial Development Authority choose Citigroup as the underwriter. The action will become final when LCIDA takes action April 24.

The commissioners’ action to choose an underwriter for the bonds is part of meeting the Pennsylvania Harness Racing Commission’s requirement that Endeka must demonstrate a “firm financial commitment” to the project by May 31 in order to retain the harness racing license.

Endeka also must complete an application for a Category 1 slow machine license from the Pennsylvania Gaming Board, have a full and executed copy of a management agreement, have an executed live racing agreement with a recognized Pennsylvania horsemen’s group and provide a summary update on the status of zoning and other local approvals and permits for the project.

The $50 million in bonds to be underwritten by the county will be backed by a portion of the county’s anticipated revenues from the racetrack. The commissioners have pledged up to 50 percent of the county’s share of gross table game revenue and a portion of slot machine and gaming revenues to back the bonds.

The law requires a portion of the revenues of such racetracks to be given to the county where they are located.

County Commissioner Steve Craig reiterated Tuesday that no tax revenues will be used to back the project, which is expected to have a $25 million annual payroll.