Maryland developers David Cordish, Milton Peterson fight for casino
By John Wagner,
They are among the region’s most prominent real estate developers. Both have reached their 70s but remain combative and blunt, routinely taking over conversations. Each presides over a company bearing his name that employs his sons. And both have become accustomed to getting their way.
Now, they are facing off in a battle in which only one will prevail. David S. Cordish has something that Milton V. Peterson wants just as badly as Cordish doesn’t want him to get it: a Maryland casino.
The Free State’s continuing drama over whether to allow a high-end gambling venue in Prince George’s County has a large cast of characters, but perhaps no one is more colorful than the two men with the most money at stake, both of whom have made repeated appearances alongside their lobbyists in Annapolis to plead their cases to lawmakers.
“It’s like the two toughest kids in school getting into a fight, and everyone has rushed outside to see how it ends,” said Del. Justin D. Ross (D-Prince George’s), who has been heavily involved in the debate.
After resisting gambling for years, Peterson, 76, chairman of the Peterson Cos., has gone all in to convince Maryland officials of the merits of another casino — namely one at National Harbor, his 300-acre mini-city on the banks of the Potomac River. MGM, one of the biggest players in gambling, has been enlisted as the operator if Peterson’s plan materializes.
Cordish, 72, chairman of the Cordish Cos., is working just as feverishly to resist that and protect his $550 million dollar casino, Maryland Live!, which opened last month in Anne Arundel County. There simply aren’t enough gamblers in the Washington region, Cordish contends, for venues in the neighboring jurisdictions both to thrive.
In an interview, Peterson derided Maryland’s existing casinos as “slots barns” and accused Cordish of being afraid of competition.
“He just wants a monopoly, and monopolies aren’t good,” said Peterson, whose unruly plot of white hair tops the slightly hunched body of the football player he once was.
Cordish, who has the thin build of someone who runs and plays tennis regularly, and sometimes on the same day, was more restrained when asked about Peterson’s designs.
“I don’t hate him,” said Cordish, adding that he barely knows Peterson. “It’s just business. . . . It’s not about what I want. It’s about what makes sense for the state overall. ”
But he hasn’t been shy about calling out his adversaries. He said the state would be “nuts” to authorize another casino before the existing five sites all open and stabilize. And he recently called Prince George’s County Executive Rushern L. Baker III (D), who’s been pushing for a casino in his county, “sort of a fountain of misinformation.”
High hand — for now
For now, Cordish appears to have the upper hand — but that could change. Gov. Martin O’Malley (D) said Friday that he is still seeking consensus on an expanded gambling plan that is likely to include a Prince George’s venue. A labor-led group aligned with Peterson, which has been airing radio and television ads calling for a sixth casino, certainly hasn’t given up.
A proposal floated last month by a work group set up by O’Malley was shot down after leaders of the House of Delegates withheld their support, with some echoing Cordish’s arguments. That has at least delayed a special legislative session on the issue that O’Malley had advertised to start Monday.
The battle between Peterson and Cordish began in earnest during the regular session of the General Assembly, when a similar plan — that would also authorize Las Vegas-style casinos at Maryland’s five existing slots sites — died in the House.
Shortly before, Peterson contends, he was approached by Cordish, who offered to drop his opposition to a new casino with one key condition: Cordish be allowed to operate it.
Asked about that a few days after he sat down for a lengthy interview, Cordish responded tersely by e-mail: “UNTRUE.”
Whatever the case, Peterson announced last month that, if given favorable consideration by the legislature, National Harbor would partner with MGM to build an $800 million facility with a hotel, nightclub, spa and other upscale amenities.
Why not go with Cordish? “They are a fine company, they do good work, but I want a destination,” Peterson said. “There’s a difference between that and a slots barn.”
National Harbor is the crown jewel for the Fairfax-based Peterson Cos., which has been the driving force behind numerous office, retail and residential projects in the Washington area since its founding by Peterson close to 40 years ago.
In addition to National Harbor, the company’s portfolio includes Downtown Silver Spring, the 440,000-square-foot collection of shops and restaurants that has revitalized a swath of Montgomery County. Peterson also builds commercial and government office buildings.
Cordish’s company has its headquarters in downtown Baltimore, in the Power Plant building at the Inner Harbor. The building itself, a repurposed industrial structure, is a testament to the kind of urban revitalization and creation of entertainment districts for which he is known.
The mementos in Cordish’s crowded corner office reflect his company’s national reach. There’s a red seat from the old Busch Stadium in St. Louis signed by several star Cardinals players. The company is currently developing an ambitious entertainment complex next to the team’s new venue.
Cordish also has an electric guitar emblazoned with the Maryland Live! logo. That’s a recent gift from the Seminole tribe, for whom his company built — and, for a short time, operated — a pair of Hard Rock casinos in Florida.
Gambling was not part of Peterson’s original plan for National Harbor. But he has made several adjustments to his vision since the development opened in 2008, just as the economy grew rocky.
Anchored by Gaylord National Resort and Convention Center, the waterfront property boasts five other hotels, more than two dozen restaurants, close to 50 stores, condominium and time-share units, and an eclectic collection of public art.
Given its accessibility to the District and Virginia, analysts have long said National Harbor could be one of the most lucrative gambling sites in the country.
But when Maryland launched its slots program in 2007, the legislature adopted one of the highest tax rates in the country. It was so high, Peterson reasoned, that there was no way to build the kind of high-end facility that would fit in with National Harbor’s “personality.”
Peterson said his views began to change about a year ago, when Baker, the Prince George’s County executive, approached him to suggest “a billion-dollar casino” with a lower tax rate that would make it easier to recoup the high initial investment in the facility.
“I said, ‘Rushern, now you’re talking,’ ” Peterson recalled.
As envisioned, the casino would sit atop a wind-whipped hill just to the east of the heart of National Harbor, on a parcel where Cirque du Soleil sets up its tent when it comes to town and that otherwise is used for overflow parking.
At a hearing in June of O’Malley’s work group, members of Peterson’s panel were offering a dry recitation of the economic arguments for a casino there. Peterson cut them off, rising to show an overblown map of his coveted location.
“It won’t look like a casino,” Peterson explained to a reporter during a subsequent visit to the location, which is visible from the Beltway right after motorists cross into Maryland. “Given where we are, it can’t be garish.”
Opening Maryland Live!, in which Cordish’s pride is apparent, was not without its own challenges. Opponents petitioned the zoning of the casino to a referendum in Anne Arundel. In the months before the November 2010 vote, Cordish spent nights and weekends going door-to-door, making his case to residents in one-on-one conversations.
“Nobody ever outworks us,” he said. “You give us a hurdle, and we’re going to work hard to get around it.”
Cordish has been no less aggressive with the legislature in recent months. He said he has talked individually to “dozens and dozens and dozens” of lawmakers about what he sees as the dangers of moving too quickly on a Prince George’s site.
In the meantime, Cordish said, there are other ways for the state to reap more money. Lawmakers could authorize table games at existing facilities. And they could expand the hours casinos — including his — stay open. Maryland Live! has had to kick out thousands of customers at its mandated closing time, Cordish said.
“If you just let the people gamble,” he said,“you pick up a fortune in revenue.”
That is a sentiment on which he and Peterson could agree.