Petersburg won’t release $1.4B casino proposal from company that won project

A rendering of the casino development Cordish Companies has proposed for Petersburg. (Image courtesy of Cordish Companies)

Petersburg officials say they won’t release the winning proposal for a planned casino project they’ve called the largest economic development effort in the city’s history.

Last month, The Virginia Mercury requested a copy of the successful casino offer submitted to the city by Maryland-based Cordish Companies. On Tuesday, the city’s Freedom of Information Act officer said the document wouldn’t be released because the city canceled its competitive bidding process and hasn’t awarded a contract to Cordish.

“Therefore, the file is closed and no records are available,” Petersburg FOIA Officer Shaunta’ Beasley said in an email.

Some details have been publicly revealed about the proposal from Cordish and the other four bidders that responded to Petersburg’s Feb. 12 request for proposals from companies interested in building a casino in the city. Cordish envisions a mixed-use gambling and entertainment development that could total $1.4 billion over 15 years. The first phase calls for a casino, a 200-room hotel and an event center. 

But the refusal to release the full proposal — which presumably contains more exhaustive information about the casino’s expected timeline, costs, financial projections and impact on the community — is the latest example of what some see as a troubling lack of transparency surrounding Petersburg’s attempts to become the latest Virginia city eligible to have a casino.

“I would be hard pressed to come up with any policy reasons that would say you can get around both procurement and public records laws simply by saying ‘oh well we’ve canceled the process and made a decision outside of it,’” said Megan Rhyne, executive director of the Virginia Coalition for Open Government.

Petersburg is preparing to ask its voters to approve the Cordish project in a ballot referendum expected to take place in November. 

City residents were invited to a public town hall on the casino proposals held on April 14, with each company invited to give a high-level overview of their plan. But the Petersburg City Council selected Cordish three days later after a closed session and virtually no public discussion of the pros and cons of each bid.

The Mercury requested Cordish’s response to Petersburg’s RFP on April 25, the day after the city announced Cordish as its partner. A city spokesperson forwarded the request to Petersburg’s FOIA office, which said the city would need more than the standard five business days to respond.

Petersburg first selected Maryland-based Cordish, which developed the Live! Casino & Hotel in Maryland’s Anne Arundel County and the Power Plant Live! Entertainment district in Baltimore, as its prospective casino partner in 2022. That process  was also criticized as opaque, after the city told the Richmond Times-Dispatch it had no public records to provide detailing how it had decided Cordish was the best fit to build a casino in Petersburg. 

The city had indicated to casino bidders it would keep their responses to the RFP confidential “as requested by the responding firms,” according to city documents. The RFP said that confidentiality would end when the city had chosen a partner and officially signed a development agreement. Cordish representatives didn’t respond Tuesday when asked if the company had instructed Petersburg not to release its casino proposal.

Under Virginia law, government procurement records are supposed to be open to the public, with some exceptions meant to allow officials to review competing bids privately before announcing a winner and to protect “trade secrets or proprietary information” submitted by private companies.

Petersburg didn’t point to a specific FOIA exemption to explain why transparency laws don’t apply to Cordish’s response to the RFP. Instead, Beasley cited a section of the Virginia Public Procurement Act laying out multiple FOIA exemptions related to competitive bidding.

That code section says the trade secrets exemption can’t be used to shield an entire bid or proposal from public view. However, the law says proposal records only become public “after the award of the contract.”

After a closed-door meeting on April 24, the Petersburg City Council voted to cancel the casino RFP and select Cordish as the city’s casino developer, a move that surprised and confused several of the companies competing for the project. 

The city, which didn’t answer follow-up questions about how it could keep the proposal under wraps, seems to be claiming it doesn’t have to release the winning bid because, technically, there was no winner. Though the city has hailed the selection of Cordish as a major step forward in the process, Beasley said “no award was made” under the RFP.

‘A process that was forced upon the city’

The decision to cancel the RFP was supported by Petersburg City Attorney Anthony Williams, according to an April 11 legal opinion obtained by the Mercury. 

In that opinion, Williams wrote that, in his view, the entire competitive bidding process was “legally improper” because the General Assembly had pressured the city into issuing the RFP by threatening to block legislation allowing Petersburg to have a casino. Williams also opined that the city selecting a casino partner didn’t count as awarding a contract under state law.

“The RFP process that the city is currently engaging in is not authorized or required by law in any way, shape or form,” Williams wrote. “It was demanded of the city of Petersburg by individual members of the Virginia House and Senate, and wasn’t required of any other eligible host cities currently authorized under the Code of Virginia.”

He went on to call the RFP “a process that was forced upon the city as an improper political condition of moving the casino bill forward” and said it “undermines and usurps the independence of the local governing body to make decisions for the benefit of its citizens.”

When the General Assembly passed a law in 2020 opening the door to casinos in Virginia, state lawmakers only authorized a few select cities to pursue casinos. Because cities like Bristol and Portsmouth that lobbied for the 2020 bill already had casino plans in the works, the state didn’t require local governments to choose casino companies via competitive bidding.

‘He says this is what we must go with’

The murky process has stoked major controversy in Petersburg. One week before unanimously picking Cordish, Petersburg City Manager John “March” Altman signed a letter of intent indicating the city was picking Bally’s Corporation, a casino company that competed with Cordish for the project. 

The city claims that too was a result of improper political demands from the state legislature meant to steer Petersburg’s casino project in a particular direction. Sen. Lashrecse Aird, D-Petersburg, whose office was involved in creating the Bally’s letter, has disputed the city’s allegation of outside pressure.

Communications records obtained through FOIA show Aird’s office helped prepare the Bally’s letter and received the signed copy from Altman just minutes before the General Assembly convened on April 17, when the legislature voted to officially give Petersburg permission for a casino.

“Attached is the letter that we discussed,” Altman wrote in an email sent shortly before noon to Aird and her chief of staff Jameson Babb. “I will be contacting the company later today to discuss.”

Bally’s has said the city never contacted the company about the letter of intent.

On April 16, the day before Altman signed the letter, Petersburg spokeswoman Joanne Williams sent Altman and Mayor Sam Parham an email suggesting the letter had come from Aird’s office.

“See attached with Jameson. He says this is what we must go with, and they sought advice on content from another attorney,” Williams wrote to the two other city officials. All three officials involved in the exchange used personal email addresses instead of official government accounts. Parham forwarded the email to Anthony Williams, the city attorney, a few minutes after he received it.

In a new statement Tuesday, Aird said the city’s letter of intent selecting Bally’s “arose from their attorney refusing to assist them — and that is what’s reflected.” Her office, she said, was serving as a “sincere resource and collaborative partner” for Petersburg’s leaders.

“These attempts to blame the General Assembly and portray themselves as coerced into anything by me or otherwise is merely political theater and a distraction from this council’s true intentions to move forward with no process, no public engagement and proceed in the least transparent way imaginable,” Aird said.

Despite Petersburg’s refusal to release the full Cordish proposal, the city has released other documents related to the casino RFP in response to requests from the Mercury and others, most notably a preliminary recommendation from a financial consulting firm, Davenport and Company, that said Cordish appeared to be the strongest bidder. 

The two-page Davenport report mentions an attachment with “a summary of each proposal under more than a dozen different variables/key considerations.” The Mercury requested that attachment on April 29 but has not yet received a copy from the city.

A gambling industry consultant who reviewed the Davenport report said the two-page summary lacks the type of detail you’d expect in a thorough review of casino proposals. 

Sebastian Sinclair, the president of Christiansen Capital Advisors, said he would expect to see side-by-side comparisons of numbers associated with each bid and analysis of how realistic each bidders’ revenue projections were. That information isn’t included in the overview document the city has released.

“The Davenport report doesn’t elucidate anything,” Sinclair said in an interview. “If this is all that Davenport did, this is not adequate due diligence to make an informed choice.”

Sinclair, whose company advises state governments on gambling issues, said he’s been “thoroughly unimpressed” with how things have gone in Petersburg.

“It’s almost the golden rule of casino gambling authorization,” he said. “You’ve got to be transparent in the process.”

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