Rendering of BC Place and the proposed entertainment complex to be built on adjacent land owned by PavCo.Handout
Paragon Gaming Inc. will count on its relationship with provincially owned PavCo to help bankroll its proposed $450-million Vancouver casino, says Paragon president Scott Menke.
Paragon will put up some of its own money as equity but will have to turn to capital markets to line up about $350-million worth of debt financing for the rest, Mr. Menke said on Tuesday.
"And we'll do so hand in hand, as our agreement says, with PavCo, ensuring that we have the safest [financing]and most clarity on our ability to complete the project," said Mr. Menke, who spoke at a news conference held by casino proponents amid growing controversy around the project.
The province is confident debt financing can be arranged, said PavCo chairman David Podmore.
"We talked to major lenders in Canada about the financeability of this project and we are satisfied that it is financeable," Mr. Podmore said, adding that Paragon will have to have secure financing lined up before PavCo gives it a green light to proceed.
A public hearing on the casino project is scheduled for March 7.
Mr. Menke, along with Mr. Podmore, acknowledged that Vancouver residents' experience with the troubled Olympic Village project - now relaunched as the Village on False Creek and being sold at discount prices - has contributed to public jitters over the casino deal, especially any potential downside to city taxpayers.
"We certainly are living that history that happened on the Olympic Village," Mr. Menke said. "We think everybody's learned from that and I know that PavCo has. And we are certainly going to make it a much more secure financing, with our ability to put all the money up front."
The casino project, which would feature two hotels and a 24-hour-a-day casino with 1,500 slot machines next to B.C. Place, has been in the planning stages for several years and has generated increasing controversy in recent months. Opponents have raised questions about Paragon's track record - which includes unsuccessful bids to operate casinos in Missouri and New Brunswick. Paragon operates the Edgewater Casino in Vancouver. Opponents are also questioning PavCo's decision to count on lease revenue from a casino operation to help pay for renovations, including a new roof, at B.C. Place.
That decision was already not sitting well in some quarters when Mr. Podmore this week ruffled feathers further by suggesting that the provincial government's decision over the past couple of years to cut gambling grants to arts and community groups has fueled anti-casino sentiments.
That suggestion drew an angry retort from the Vancouver-based Alliance for Arts and Culture, which on Tuesday said casino proponents have not presented a solid business case to support revenue projections for the casino.
At the news conference, representatives from Las Vegas-based Paragon, PavCo (B.C. Pavilion Corporation) and the B.C. Lottery Commission also faced questions about problem gamblers and money laundering.
BCLC president Michael Graydon said the agency has programs and safeguards in place to guard against those problems.
Casino opponents have accused the province of rushing the casino project, citing the relatively brief timeline for the casino and related zoning decisions compared with that for other projects involving public land or funds, such as the oft-delayed Evergreen transit line.
On Tuesday, Mr. Podmore disputed that the process had been hasty, saying it took months for PavCo to negotiate a "Master Development Agreement" with Paragon.
In a timeline provided to reporters, PavCo says it negotiated that deal over six months, between July 2009 and February 2010.
Paragon was selected as the proponent in a two-step process that took about three months in 2009.
The project now hinges on city approval. If it is rejected, PavCo would have to find some other means of repaying a $150-million construction loan from the province that helped retrofit B.C. Place, Mr. Podmore said.
"If it isn't approved, PavCo will have to do what any business person would have to do in the face of a rejection on a project - we will go back and look at what alternatives we have in terms of development of those lands."
The city of Vancouver took over the construction loan for the Olympic Village after an American hedge-fund lender refused to provide any more money to the project, which was placed into receivership last year.
Editor's note: Las Vegas-based Paragon Gaming would seek debt financing for its casino project in Vancouver. Publicly-owned B.C. Pavilion Corp., or PavCo, would approve the terms of that financing but would not be putting any public money in to the $500-million project. The original newspaper version and an earlier online version of this article contained incorrect information. This online version has been corrected."
Wendy Stueck