Forest City Enterprises, Harrah's Unveil Plans - Wednesday 25th of January 2006
PITTSBURGH, Pennsylvania – Forest City Enterprises(NYSE: FCEA; FCEB) today unveiled plans for over $1 billion of investment atStation Square in Pittsburgh, including dramatic new investment in thevitality of downtown Pittsburgh, a $512 million casino managed by Harrah'sEntertainment Inc. (NYSE: HET), a community partnership with the PittsburghHistory & Landmarks Foundation and the creation of a new charitable foundationheaded by Franco Harris. Their plan is contingent on securing a license fromthe Pennsylvania Gaming Commission.
"Forest City Enterprises and Harrah's Entertainment bring a world-classteam with unparalleled experience to Pittsburgh. When we sold Station Squaretwelve years ago, we chose Harrah's and Forest City from a large field becausewe knew they would create high quality development, jobs and revenue forrevitalizing our neighborhoods," said Art Ziegler, president of the PittsburghHistory & Landmarks Foundation. "Forest City is a $7.8 billion economicdevelopment company with a long standing commitment to Pittsburgh and existinginvestment of $1 billion in today's dollars in Pennsylvania. Station Squareis the most successful tourist attraction in Western Pennsylvania, attracting2.5 million visitors each year. Harrah's is the most successful gamingcompany in the world, with 36 properties and projects in developmentworldwide."
The plan expands Station Square into a bustling new urban mixed-useresidential and entertainment community. This will include ground-floorretail, sidewalk dining and cafe eateries, a 400,000-square-foot, $512 millionHarrah's Station Square Casino with 3,000 slots, an additional 200 rooms atthe Sheraton Station Square Hotel and 1,250 residential condominium units.All of these new elements will be connected by pedestrian scaled streets,creating a neighborhood look and feel. The residential units will haveporches and stoops, accompanied by new parks and a riverside esplanadeoffering improved river access. With more than 50 acres at Station Square,the plan also allows for future expansion of the casino to 5,000 slots and thecreation of a new hotel tower with 300-500 rooms.
Forest City and Harrah's also unveiled a significant philanthropiccommitment to Pittsburgh, both now and in the long-term, that will be realizedshould they secure the license to develop a casino, as follows:
- First, the Forest City/Harrah's development proposal will enable the Pittsburgh History and Landmarks Foundation to establish an endowment of $25 million. Proceeds to the Pittsburgh History and Landmarks Foundation will be invested with its existing funds and used to support and expand programs to revitalize inner city neighborhoods.
- In addition, the Forest City/Harrah's development proposal will give a total of more than $1 million a year through a foundation to support the community. Half of the funds must be used in neighborhoods with a 60 percent or higher minority population. Franco Harris will lead the effort to give these funds back to the community. This money will be made available as soon as the license is secured.
"I am excited to be part of the Forest City/Harrah's team," said FrancoHarris, a partner in the development. "I've lived and played in thiscommunity for years and I believe these two companies bring the expertise andstrengths that Pittsburgh needs to make gaming successful. This partnershipwill help Pittsburgh and our communities continue to grow and improve. If thegaming commission selects Forest City and Harrah's, I am honored to be thePresident of the foundation and serve our City."
"With more than $1 billion of proposed investment, Forest City andHarrah's have the strongest and most comprehensive development plan and thepotential for the most tax revenues," said Brian Ratner, a Director of ForestCity Enterprises.
"Harrah's is excited about the opportunity to join the Pittsburghcommunity," said Jan Jones, senior vice president of communications andgovernment relations for Harrah's. "As the largest and most establishedcompany in gaming, Harrah's has a long track record of attracting tourists andbusiness to communities across the nation. Station Square already attracts 2.5million visitors annually; we're confident we can take business to an evengreater level by marketing Pittsburgh to millions of loyal Harrah's customersacross the nation. The experience of this team and the quality of thislocation are second to none, and create the greatest potential to maximize taxrevenues and economic benefits for this community and this state."
Harrah's Total Rewards(R) customer loyalty program is unsurpassed in theindustry. With more than 40 million members, the program is the centerpieceof Harrah's national, cross-property marketing strategy. Total Rewards allowsmembers to earn and redeem credits for their play at any one of Harrah's 36casinos worldwide. The program is augmented by Harrah's customer relationshipmanagement efforts that helps provide a customized entertainment experience toevery Harrah's customer.
Forest City and Harrah's will create thousands of good paying jobs. Astudy conducted by Christiansen Capital Advisors projects the creation of10,377 jobs with total wages of $321.5 million in the first year ofoperations. The study also projects gaming tax revenues of $180.7 million toPennsylvania and $10.6 million each for Allegheny County and the City ofPittsburgh in the first year of operations. About $155 million of theproperty's revenues are projected to come from customers coming from outsideAllegheny County.
"The plan outlined today is a positive for Pittsburgh and will createthousands of good paying jobs from both the completion and operation of thedevelopment," said Rich Stanizzo, business manager, head of the BuildingAllied Trade Council.
Harrah's will also work closely with Bill Strickland and his team at theBidwell Training Center on the North Side in a partnership to train itsprojected 2,000 employees.
At the press event, Forest City and Harrah's unveiled renderings of theproposed development, as well as information about Harrah's Responsible Gamingpolicy and training program and its Code of Commitment. These policies haveset the gaming industry's standard for social responsibility and focus onresponsible gaming, business integrity, volunteerism and commitment tocommunities across the nation.
DKS Associates, a national recognized transportation engineer, inconjunction with Pittsburgh's GAI Consultants developed a transportationimpact study that showed the strengths of this location. Station Square isthe only site that benefits from all types of available transportation: watertaxis, the Light Rail "T", the Incline, buses, cars, and even bicycles andpedestrian access. The location also offers direct access from the Interstateoff the Fort Pitt Bridge, creating a smooth flow of vehicles and access toparking.
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