Why Call Him "Billionaire" Bluhm?

Viewer & reader Ted Couperus writes:

Why do you as well as all the other news folks on WTAE refer to Neil Bluhm as "Billionaire Neil Bluhm"? I didn't hear anyone refer to Don Barden as "Millionaire Don Barden". It seems very strange to use someone's alleged net worth as part of their name almost like it is a title.

It's a fair question.

While a billion dollars may not buy what it used to, it's still a significant mark of distinction in the world of business and worth noting. It's certainly in a different league than millionaires and the strata for the rest of us which a local bank referred to as "thousand-aires" in an ad campaign years ago.

Until Mr. Bluhm & company close the deal, which -- at this writing -- they've not yet done, we can't call him the Pittsburgh casino co-owner. (UPDATE: Late this morning, word came that the deal closed, casino financing came through, and payments to contractors is under way.)

In fact, Bluhm has said that his personal stake in the new casino will amount to only a few percentage points. He testified that he does not control the trusts established by his adult children for his grandkids. Those trusts will also have a stake in the casino.

Click image to enlarge.

The PowerPoint presentation to the gaming board identifies Neil Bluhm as "Managing Principal of Walton Street Capital", but that fund has many investors. "Walton Street Capital" has a 74% percent stake in "Pittsburgh Gaming Investors"... which has a 75% stake in "Holdings Gaming Borrower"... which is the vehicle for raising money for... "Holdings Acquisition Co", the casino licensee.

Taking the borrowed money into account, the PowerPoint then breaks it down this way:



Bluhm will serve on the three person management committee which controls the casino. That committee is at the top of a chain which includes a total of four variations of the Holdings/Gaming/Borrower/Aquisition/GP/ LLC/ LP/Company maze of names in the chart below.

Click image to enlarge.

Faced with those labyrinthine details and limited time, we opted for saying "Billionaire Neil Bluhm". The fact that it alliterates is a bonus.

We're not alone.

Google "Billionaire Neil Bluhm" and you'll get 1,970 hits. I'm only responsible for a few of them but I'll try not to run up the score.

A search for my alternate adjective in this case, "investor Neil Bluhm", brings 478 Google hits.

A simple search for "Neil Bluhm" produces 10,100 hits; the first two are shown in the screenshot below.



(PS to Mr. Couperus: I tried to e-mail back to you, but my response was bounced by your internet service provider as "rejected by the recipient domain".)

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Contractors Feared Casino Might Drag Them Into Bankruptcy

Pittsburgh Casino Construction Site

The Pittsburgh casino project's cash crisis had local contractors worried that if Don Barden's company had gone bankrupt owing them tens of millions of dollars, their businesses would have been dragged down with him.

That information came to light during sworn testimony before the Gaming Control Board in Harrisburg. The details were overshadowed by the board's approval of the casino deal at the end of a daylong hearing.

Here are my notes from the testimony.

Dean Mosites, Mosites Construction Company:

• "I think the board knows that we've not received payments for work that was done in April, May, and June. For all of these contractors, that adds up to a tremendous sum of money. And it is enough money to put us in financial jeopardy. Right now, our banks and our bonding companies are looking very closely at our businesses and (are) very, very concerned (about) our businesses moving forward carrying these kinds of receivables."

• "We're in a position now where we have to be very judicious with the money that we spend. We can only spend on essentials. We have to make decisions -- every day I meet with my controller. This is not a situation I've had before in the 30 years I've been in business. I've got to meet with our controller every day and we've got to pick and choose who we can pay and who we can't to keep us moving forward."

• "We wish to avoid the harrowing problems that go with bankruptcy."

• "That is a very real possibility."

• (In answer to the question of how many families would be hurt by such bankruptcies) "I would say as it goes down from the 22 of us, the geometric progression until you get down to the bottom, there's thousands."

Here's a link to raw video of Mosites' testimony.

Others who testified:

Dan Keating, Chairman of Keating Building Corporation, General Contractor for Pittsburgh casino project:

• "If we can't get the work started, those contracts will terminate and the effects will be disastrous."

• "From a practical standpoint, it would be devastating. The people people affected.. are literally thousands. Every subcontractor has numerous sub-subcontractors and vendors that are part of this process. They, their families... would, I think, suffer irreparable damage...It's a frightening thought...it would just be devastating."

Rich Stanizzo, Business Manager, Building & Construction Trades Council:

• "If these contractors cannot recoup their money, it is going to change the face of construction in Western Pennsylvania, and it won't be to the better. We do not want to see any of these contractors be faced with going out of business. It's something that we in Western Pennsylvania cannot stand."

Meanwhile, casino spokesman Daniel Fee says logistics delayed transferring money today -- and he says that it will be wired on Monday. He now predicts work at the casino site won't resume until Tuesday.

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Notes & Quotes: Casino Deal Approved

Gaming Control Board

We're on the Pennsylvania Turnpike again, just heading back from Harrisburg and the Gaming Control Board vote approving transfer of control of the Pittsburgh casino license.

In the end, the vote was unanimous. Board members took great pains to emphasize that "this was not a rush to judgement" and that politics did not drive their choice. One member suggested that politics were behind some of the criticisms they faced leading up to the vote.

Here are some quotes from Billionaire casino investor Neil Bluhm, following the vote:

"If this didn't go ahead, this would be in bankruptcy, tied up for a long period of time. Instead you're going to have a wonderful casino, a great project on the river, and I'm sure the citizens of Pittsburgh will enjoy it and at the same time (it will) create a lot of jobs...."

"Tomorrow, we should be wiring funds and hopefully close on the transaction and on Monday the contractors will be back at work and we'll be on our way."

Representatives of contractors and unions had testified that some local companies could have been driven out of business by losses due to bills unpaid by Barden's PITG Gaming if it had gone bankrupt.

Ken McCabe, Gaming Board Member:

"I think if we revoke it or rebid it will only help a small group of people and would be disastrous for thousands of families, for Pittsburgh, and for the commonwealth."

Sanford Rivers, Gaming Board Member:

"Mr. Bluhm, thank you for removing the doom and gloom that hovers over the Pittsburgh casino and it's amenities."

James Ginty, Gaming Board Member:

"To deny this application would do a tremendous disservice to the people of Pittsburgh, to the citizens of Allegheny County and to the citizens of Pennsylvania.."

State Senators Jane Orie and Jim Ferlo -- who had urged the board to revoke the license -- did not come to testify. They submitted their statements in writing. Ferlo had a staffer at the hearing who provided copies to reporters. In it, he says:

"....it seems the board's actions are not intended to provide an open, fair. And objective public process, but instead to speedily cover its tracks."

...and...

"...the process leading up to this hearing has been shrouded in secrecy. Repeated letters requesting documentation of the buyout were either ignored or met with indifference."

"It was only last week that my office began receiving this information, which is very complicated, and it has been filled with redactions. Important names and financial numbers have been removed making discerning information from the documents difficult"

Senator Orie's office e-mailed a statement to the media, but the pdf format isn't legible on the small screen of the BlackBerry I'm using to write this post.

The gaming board staff says:

"A PowerPoint presentation made today to the Board has been posted on the PGCB web site. A link to the presentation can be found under the 'What's New' section of the PGCB's home page, www.pgcb.state.pa.us .

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A Blogging Update On The Road

Neil Bluhm, Greg Carlin, Don Barden

It's 5:50 AM as I write this. Photographer John McKee and I left WTAE at 5:00 AM, headed for Harrisburg to cover the gaming board's hearing on the Pittsburgh casino license.

It turns out that as I was staking out casino billionaire Neil Bluhm's meeting at the mayor's office, there was quite a contentious meeting going under way on just the other side of city council's chamber door.

Here's a link to video of Jake Ploeger's Channel 4 Action News report.


I'm curious to hear what specifically Council President Shields was labeling as lies when his remarks prompted city Personnel Director Barbara Trant to walk out of the council meeting.

One side note. Those of us waiting for Bluhm outside the mayor's office hadn't heard what was happening inside council chamber. We did see Director Trant waive her hands in the air in exasperation as she exited council and headed for the mayor's office. She then apparently realized that she's picked up Councilwoman Payne's glasses on her way out. She doubled back and handed the glasses to another reporter to return to Payne. The reporter hadn't been in the council meeting and appeared puzzled by his unexpected assignment.

Finally, on an unrelated note, thanks to PittGirl for the mention in her Burgh Blog the other day. The power of PittGirl is amazing. As I went through the day Wednesday, people kept asking me "Did you see? You got a mention by PittGirl!"


....So, we just heard there's an accident on the Turnpike at Breezewood. That may mean a detour on our road trip to Harrisburg. I may post again later today.

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Billionaire Bluhm Meeting Mayor & County Exec

Neil Bluhm

I'm posting this by BlackBerry at 1:15 PM from outside the mayor's office.

Lead investor Neil Bluhm and proposed CEO Greg Carlin arrived at shortly after 12:30.

This courtesy call comes the day before the Gaming Control Board resumes its meeting in Harrisburg on Pittsburgh's casino license.

Mayor Ravenstahl and County Executive Onorato won't attend the hearing, because it conflicts with tomorrow's groundbreaking for the new arena.

As Onorato went in, he faced some questions about whether state taxpayers will be on the hook if the casino's share of payments toward financing the new arena were lost.

Here's a link to my report back in July, confirming that fact.

The Pittsburgh Channel story summarizes my report, and there should be a link to the video on that web page.

The bottom line from my report on July 25th: the governor's office confirmed to me last month that the state has a "backstop" agreement to lease the arena for $7.5 Million a year, if the casino's share of payments on the financing is not available.

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Read Barden & Bluhm's Casino Pitch

Here's a summary of the the filing before the Gaming Control Board by Don Barden and the prospective new Pittsburgh casino owners, including Neil Bluhm. Much of what you'll read below are direct quotes and key phrases from their written submission. By the way, it appears the casino won't be called "Majestic Star" under the proposed new partnership. The name of the ownership group itself hasn't been finalized either.

PITG and "Holdings Acquisition Co", a newly formed limited partnership are applying to the gaming board for a proposed reorganizing and resulting change of control and re-capitalization. This would be a change of control of the Pittsburgh slots license.

PITG has been unable to secure permanent financing.
It's bridge lenders have notified PITG they believe it is in default and they may "exercise default remedies" that would have a material, detrimental impact on the development and completion of the contract.

Walton Steet Capitol would make an equity contribution of $120 Million to be used to complete the project.

"Holdings" would become the new licensee that develop, own, and operate the project. The initial owners of Holdings would be a Walton controlled partnership and a partnership consisting of Greg Carlin and certain family members of Neil Bluhm to be known as "High Pitt Gaming".

PITG would contribute assets and certain liabilities to Holdings in exchange for partnership interests in an affiliate of Holdings.

Upon closing, Don Barden will be a prinicpal licensee and indirect owner of "Holdings".

Management of Holdings would be a management committee. Comprised of Don Barden and the following representatives of the investor group:
Greg Carlin, Andrew. Bluhm, and Neil G Bluhm, each of whom would be licensed as a principal.

The proposed transaction is "reorganization and recapitalization of a distressed project" that has "been unable to secure permanent financing on its own to continue the development of the project".

"It has been publicly disclosed by the bridge lenders that they believe the current bridge financing to be in default and intend to take actions to protect their interests"


"Under a best case scenario....(that)..would result in disruption of construction at the site and significant delays in the completion and opening of the project ".

"The goal of the proposed transaction is to rescue a struggling project...".

"..... A new equity infusion and substantial permanent debt financing are needed in a timely manner in order to continue and ultimately complete construction".

The project is subject to material negative default actions from the existing bridge lenders.

"As part of the proposed transaction, Holdings will honor the conditions of the licensure imposed on PITG... Including obligations to citizens of Pittsburgh....".

"Such obligations in aggregate will cost approximately. $9 Million per year".

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