Cordish bets on gaming at Simon's Arundel Mills

It's looking more and more like a sure thing that within the next 18 months or so, Arundel Mills will offer a form of entertainment besides shopping, eating and movie-watching.

What's in the wings at the Baltimore-Washington, D.C-area megamall is gaming - 4,750 slot machines and video table games, to be specific.  That's the number of video lottery terminals (the legal term) permitted by Maryland law in Anne Arundel County and encompassed by a far-reaching proposal for what's being promoted as a "world class" gaming and entertainment facility at the center.

This is the plan by a spinoff of Baltimore-based Cordish Co., a development heavyweight with a real estate pedigree dating back nearly 100 years and an entertainment and gaming resume filled with some of the nation's newest upscale destinations. Cordish also owns Atlantic City Outlets, the Walk in that New Jersey gambling mecca.

"If we are awarded a license in the fall of 2009, we will break ground immediately and will expect to finish by winter 2010," says Jonathan Cordish, principal and fourth-generation family member in the privately owned company. Power Plant Entertainment Casino Resorts Maryland, LLC, owned and managed by Cordish principals, is seeking zoning and gaming license approvals for a 200,000-sf casino that would be built in the mall's parking lot. A zoning vote by the Arundel County Council is expected this summer and a state Video Lottery Facility Commission decision is anticipated in the fall.

There aren't many "ifs" blocking the Cordish proposal. Maryland voters soundly supported video lottery terminals in a 2008 referendum on a constitutional amendment that would allot 15,000 slot machines among five sites, one of them a facility in Anne Arundel County. The 59 percent "yes" vote made Maryland the 38th state to allow slots or casino-style gambling. And Arundel County Executive John R. Leopold says that even though he opposed gaming bills during 20 years in the Maryland House of Delegates, he has heard voters speak. So, if time were to run out on the initial zoning legislation he submitted for council action, he says he would re-submit it.

The few remaining rubs are conditions that the council could attach to the zoning law -— for instance, addressing traffic control and crime prevention - and a court challenge of the state licensing process. Magna Entertainment Corp. (which since filed for bankruptcy) sued the state after gaming authorities rejected its Arundel County slot bid when Magna failed to include the required, up-front payment of $28.5 million in licensing fees. Magna's Laurel Park was long thought to have the inside track for the Arundel County license, with area residents assuming the race track would add slots some day, as other nearby states (such as Delaware, Pennsylvania and West Virginia) have let parimutuel establishments do

So, the Cordish proposal is the only one waiting for the Arundel license or, as Leopold says, "From a practical standpoint, it appears there's only one likely site."

In a stroke of good timing, Cordish is fresh from a new gaming and development coup in Indiana, where it opened in March the 233,000sf Indiana Live! Casino. Just 20 minutes from Indianapolis, the casino is adjacent to and owned by Indiana Downs horse-race track. This casino offers less than half the number of slot machines and video table games, such as electronic blackjack and video Texas Holdem, that would be allowed at the Arundel Mills casino.) Two Hard Rock Hotel and Casino complexes that company affiliate Power Plant Entertainment developed, in Hollywood and Tampa, Fla., are thriving, and company principals are discussing with native Americans a casino and hotel project in New York's Catskill Mountains.

Also, the Arundel Mills proposal has the bad economy on its side. Casinos mean jobs and tax revenue. The Anne Arundel Economic Development Corp. and area chambers of commerce support the casino zoning legislation, citing the creation of 1,500 new permanent jobs and 1,500 construction jobs as well as windfalls for governments. PPE Casino Resorts Maryland projects that gross revenues at an Arundel Mills casino would exceed $600 million a year initially. "At any other location in the county, revenues would be significantly lower," Cordish wrote in reply to questions submitted by Value Retail News.

The venture's website (www.ppecasnorcsortsmd.com) specifies that the casino would bring $350 million in annual taxes to the state and $30 million a year to Anne Arundel County. The law approved in 2008 allocates 52.5 percent of gross revenues from slots to Maryland's education fund, with 33 percent to slots licensees, 9.5 percent to the horse racing industry, 5.5 percent to local governments and 1.5 percent to small, minority- and women-owned businesses.

Enhancements that the Cordish proposal plans for Simon Property Group-owned Arundel Mills are additional parking, traffic improvements, "state of the art" security and surveillance as well as a greater police presence. The 1.2-million-sf mall, opened in 2000 by Arlington, Va.-based Mills Corp., boasts 17 anchors and 225 specialty stores and restaurants as well as a 25-screen cinema. It is located at a heavily trafficked intersection of the Baltimore-Washington Parkway and Route 100, two miles from Baltimore-Washington International Airport, 10 miles from Baltimore and 20 miles from Washington, D.C.

The casino would cost at least $250-million to build (a requirement of Maryland law) and is predicted to attract nearly 6 million visitors annually. Arundel Mills is Maryland's No. 2 most visited attraction, drawing more than 13-million visitors a year. It will be open from 8 a.m. until 2 a.m. daily, Cordish said, and will be branded and named in coming months.

"The casino will be very similar to our Indiana Live! Casino," Cordish told KRAI. "It will be a high-quality gaming-entertainment facility that will enhance and improve the community. The casino will not be a slot box; it will add upscale entertainment and restaurants to the existing Mills mix."

Will this be a jackpot for Arundel Mills?

"The synergy between retail/entertainment and gaming is well established," Cordish said, explaining that his own company had demonstrated that relationship in its Seminole Hard Rock Hotel and Casino complex in Hollywood, Fla., where the lavish entertainment district is a critical driver of gaming traffic.

"Likewise, Arundel Mills is owned by Simon Property Group, which developed The Forum Shops in Las Vegas," he continued. "The Forum Shops was a pioneer in terms of integrating retail with gaming, and it was the catalyst for multiple similar developments that have shown the ongoing power of combining two types of attractions.

"On the simplest level, we will drive millions of incremental visitors to the site. These visitors will be looking for a complete entertainment experience and will avail themselves of the amenities already present at Arundel Mills.

"The casino patron is ideal for retailers. The average casino customer is 47 with above average income, has attended college and enjoys retail, dining and entertainment during her visit. There is a great crossover with most of the customers already enjoying other entertainment options at Arundel Mills."

The Arundel Mills casino would be located in a separate structure connected to, but not part of, the mall, he said, and parking garages would be built as part of the development plan. As many as 3,000 new, free parking spaces would be "highly accessible and open to all visitors to Arundel Mills."

Indianapolis-based Simon Property Group, which acquired Arundel Mills with the entirety of The Mills portfolio in 2007, issued a statement by President/COO Richard S. Sokolov, saying: "We are confident that Cordish's recently submitted proposal to the state of Maryland envisioning a casino and entertainment proposal at Arundel Mills will work in harmony with this landmark retail project, which has become one of Maryland's top destinations. We believe that the Cordish proposal will maximize revenues for all interested constituencies and expand Arundel Mills' already significant trade area."