Policy restricts sales of land for gaming

Marc Levy

Tuesday, June 14, 2005 | 9:11 a.m.

HARRISBURG, Pa. -- When the Legislature directs the state to sell off a parcel of surplus land, future buyers will have to pay a premium if the land is to be used for gambling.

Gov. Ed Rendell introduced the new policy in May as federal investigators reviewed how one parcel of state land was sold to a group of buyers that included state Sen. Michael J. Stack. The investors bought the land for $100,000, then sold an option on it for $37 million to a Las Vegas casino company.

The governor's new policy requires a buyer who is identified in land-sale legislation to disclose whether the land is intended for gambling use. If so, the state would raise the sales price to account for potential gambling profit. If not, the deed would be restricted against gambling use, said Frank Kane, a spokesman for the state Department of General Services, which handles state land sales.

Kane said the policy was not prompted by the land sale to Stack's group, but by a desire to ensure that the state gets its fair share from its land sales.

"The whole point of the policy is to ... make sure the taxpayers' interest is protected," Kane said.

The Legislature in late 2003 voted to sell 22 acres of Philadelphia riverfront land and marsh to two companies, including one in which Stack and his family owned a 40 percent interest. After lawmakers legalized slot machines last July, the investors optioned the plot to Ameristar Casinos Inc., which was hoping to secure a license to operate a slots parlor on the site.

Stack, a Philadelphia Democrat, abstained from the Senate vote, but did not disclose his interest in the land, as required by the state Constitution. Ameristar in recent days dropped the option on the land, saying it wanted to avoid political fallout from Stack's involvement. The company instead shifted its option to an adjacent parcel.

Federal prosecutors have declined to comment on subpoenas in the case. The Philadelphia Daily News first reported on the new state policy in its Friday editions.

The new policy applies to surplus land sales in which lawmakers pass legislation identifying a buyer and price. It does not apply to the other method of land sales in which the state seeks approval from the Legislature to auction off a surplus parcel.

The policy has not yet affected any state land sale, although the Rendell administration has requested that lawmakers amend pieces of land-transfer legislation written before the policy was introduced to exclude gambling.

Sen. Jane Earll's legislation to transfer 13 acres for a yet-to-be-built Erie Convention Center for _$1 was amended in such a fashion, and she said the policy decision seemed like a wise move.

"Clearly it's in response to the Stack situation and they figure that if there's money to be made, the state should be making it, not just speculators," said Earll, R-Erie.