Wednesday, June 18, 2003 | 9:32 a.m.
WILMINGTON, Del. -- A group of Delaware investors on Tuesday unveiled a plan for a riverfront casino they say could provide a big financial boost for Wilmington, the state and higher education.
Delaware Program LLC, an investment group led by Gregory Kramedas of Dover and Davis Wood of Milford, wants to build a 2,000-machine casino and a 240-room hotel on the south shore of the Christina River, near the Amtrak station in downtown Wilmington.
Proponents of the project, which faces an uphill battle in the Legislature and is opposed by Gov. Ruth Ann Minner, say the casino could generate more than $90 million a year for the state's general fund, and up to $6 million a year and hundreds of jobs for Wilmington.
Another $20 million could be available annually for scholarships aimed at Delaware residents attending the University of Delaware, Delaware State University and Delaware Technical and Community College, according to project leaders.
Rep. Joseph DiPinto, R-Wilmington, plans to introduce bills this week to establish a trust to administer the scholarship money and to revise state law to allow a fourth gambling venue in the state.
The 1994 law allowing slot-machines in an effort to help Delaware's sluggish horse-racing industry restricts casinos to the three horse tracks at Dover Downs, the state fairgrounds in Harrington, and Delaware Park in Stanton.
"A monopoly is not the way to go," said Kramedas, a principal along with Wood in KW Lands LLC, which operates six hotels in Delaware, including the Sheraton Hotel in Dover.
KW Lands is joined in the proposed casino project by Southbank Associates LLC, which owns the land on which the hotel and casino would be built. The principals in Southbank are Wilmington residents Fredrick Krapf, Dennis O'Sullivan, Hunter Lott and Joseph DiFebo. Other investors in the project include Sam Waltz, a public relations consultant and spokesman for the group, and Linda Graham, manager of the Dover Sheraton.
The investors have enlisted former state Senate leader Richard Cordrey of Millsboro to lobbying legislators. Becker Morgan Group is handling the initial architectural design.
DiPinto said he doesn't expect any action on his bills in the current legislative session, but that they should serve as the starting point for discussions.
Rep. Deborah Hudson, R-Wilmington, said a Wilmington casino could help Delaware meet the potential economic threat of slot machines in neighboring Maryland and Pennsylvania.
"We should not be waiting to see what Maryland and Pennsylvania do," Hudson said. ".... I prefer to be the aggressive state and get something in place."
With its proximity to Wilmington's entertainment district and the Amtrak station, the casino complex could become a tourist destination drawing visitors from throughout the Northeast and spur additional riverfront development, supporters say.
"It's time for the citizens of Delaware to realize more from their gaming business," said Mike Cochran, an attorney representing Delaware Program. ".... We think that Wilmington is in a position to offer an entertainment package that our other venues don't fully offer."
The casino could gross $205 million in its first full year of operation, generating $94 million in revenue for the state's general fund, according to a study commissioned by the investors.
Those numbers assume that Maryland and Pennsylvania do not have their own slot machines, said study author John O'Neill, a professor at Penn State University and managing director for Hospitality Advisory Services LLC, a consulting group.
With slot machines in neighboring states, the Wilmington casino would probably gross about $146 million in its second year of operation, with $67 million going to the general fund, O'Neill said.
Denis McGlynn, president and chief executive of Dover Downs Entertainment Inc. in Dover, was skeptical about the economic impact of a fourth casino, saying it would simply take money away from Delaware Park.
"I can't see it expanding the market," he said. ".... There would be more people in that area, but they would be people who used to be in Delaware Park."
William Rickman Jr., president of Delaware Park, did not immediately return a telephone message Tuesday.
But O'Neill disagreed with McGlynn's assessment, saying his research suggests the new machines would be readily absorbed into the Delaware market.
"I'm still revising some of these figures, but the early conclusions are really surprising me," he said. "There doesn't seem to be a big negative impact on the existing facilities."
According to O'Neill, Delaware ranks seventh among the 40-odd slot-machine markets in the country in terms of revenue per machine. Last year's daily net of $290 per machine should grow to about $305 this year, he said.
With an initial 1,000 machines in Wilmington in 2005 and another 1,000 divided among the existing casinos, as project leaders propose, O'Neill projects a daily net of $277. That would grow to $281 with the addition of another 1,000 machines in Wilmington in 2006, he said.
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