Folks on the West Side are heralding the forthcoming casino as the area’s savior. Whether those hopes are grounded in reality remains to be seen.
Located just a few short miles from the gleaming skyscrapers of downtown Columbus, the Westland area might as well be a world away.
Strip malls on West Broad Street, near Interstate 270, sit half-vacant, their fading signs a reminder of a bright past that once was. In one shopping center, a sign in the window announces a furniture store's eminent closure; a few storefronts down, a pawn shop touts its grand opening.
Many of the commercial and industrial occupants that once made the area home are long gone. White Westinghouse closed in the late 1980s; Ames Department Stores' Janitrol Road distribution center ceased operations in late 2001. And in December 2007, auto-parts manufacturer Delphi Automotive Systems shut its doors, leaving a 123-acre site polluted and vacant.
Just west of Delphi, across Georgesville Road, lies Westland Mall. "When I worked at the mall, back in the early- to mid-'80s, it was a thriving place. Being at the mall, having a job at the mall, that was as cool as it got," remembers Franklin County Commissioner John O'Grady, a West Side native.
Now, the circa-1969 mall is nearly anchorless in a sea of crumbling asphalt. Sears has hung on, as has a Staples. But JCPenney left in 1997, Macy's in 2007. They weren't the only ones: Westland is more than half-empty, says Larry Ruben, president of Plaza Properties and its LGR Realty brokerage affiliate, which co-owns the mall.
Then there's the aging Wingate Village apartments tucked just behind the mall. "Back in the early- and mid-'70s, that was the place to live. That was one of the biggest apartment complexes in all of the Midwest," O'Grady recalls. Formerly known as Lincoln Park West, recent years have seen the 41-year-old, 1,700-unit complex gain notoriety for all the wrong reasons. It already had a reputation as a crime hotspot when, in 2004, 10 people were killed in an arson. By 2009, it had a 20 percent occupancy rate, the Columbus Dispatch reported. That same year, the Westland neighborhood was named the nation's least-occupied by the Associated Press; nearly 70 percent of area residences sat vacant.
"A year and a half ago, I met with some county officials and looked at the West Side and it was a very, very bleak picture," says Chris Haydocy, whose family has owned the Haydocy Buick GMC dealership on West Broad Street since 1954. "We had extremely high crime, high unemployment, many businesses up and down the Broad Street corridor were making plans to leave. This is an area that time has forgotten. If you look around the city, you see private-public investments ... [but] there has not been any type of investment here."
Ballots & Bulldozers
The Delphi site, Westland Mall and Wingate represent more than 300 combined acres of virtual wasteland, dragging down the community. And so when opportunity knocked, Westland answered.
Opportunity, in this case, came in the form of Penn National Gaming, the nation's third-largest gaming company whose revenues last year were nearly $2.4 billion. In November 2009, voters cleared the way for it to build a casino in the Arena District, part of a constitutional amendment that legalized gambling in Ohio and allowed for the construction of four casinos.
But some Central Ohioans-including Arena District owner/developers Dispatch Printing Company and Nationwide Realty Investors-were vehemently opposed to the location. Statewide, Issue 3 had passed by a 53-47 percent vote, but Central Ohio's seven counties voted it down 58-42 percent, says Mike Curtin, associate publisher emeritus of the Dispatch.
So Penn National, which paid Plaza Properties $36 million for 24 acres of land on West Nationwide Boulevard, started looking elsewhere. "I think once Penn put their finger to the community pulse and had a chance to look around and make their own assessments, they came to the conclusion that they could have some contentiousness in the community for a prolonged period of time," says Curtin, who, with O'Grady, co-chaired Stand Up Columbus, a political action committee that lobbied for a casino move.
Locations around Columbus, from the South Side to Northland, were considered before Penn settled on the Delphi site, which offered inexpensive land ($2.5 million for 123 acres), freeway access and residents eager to offer a welcome mat.
From the start, Penn wanted to be a good corporate citizen and an economic catalyst, says Eric Schippers, the company's vice president of public affairs. "To reinvest in an area that had been forgotten, that was gathering dust, to breathe new life into an area that had been so vibrant, that was very attractive to us," he says.
And so it was back to the polls. The May 4 primary ballot contained another amendment to the Ohio Constitution, this time to move the Columbus casino to Westland. With the support-financial and otherwise-of West Siders and the city's titans, Issue 2 won handily. "In Franklin County, it was 82-18 [percent], which is unheard of," says Curtin.
Penn National soon set to work demolishing the old Delphi plant and cleaning up the site. Company officials aim for the casino to achieve silver certification from the U.S. Green Building Council's Leadership in Energy and Environmental Design initiative. Dublin-based Hull & Associates has been hired to mitigate environmental issues, which include pollutants such as arsenic and cyanide.
"We've got a significant amount of cleaning up to do," says Penn spokeswoman Karen Bailey. Penn hopes to break ground in spring 2011 and open Hollywood Casino Columbus in late 2012.
Plans call for the casino-a $400 million investment, including the state's $50 million licensing fee-to have 3,000 slot machines and 80 to 85 table games in 180,000 square feet of gaming space. By comparison, Las Vegas's largest casino, the MGM Grand, boasts 2,500 slot machines and video poker (plus table games) in 170,000 square feet of gaming area. Hollywood Casino Columbus also will have a steakhouse, entertainment lounge, buffet, sports bar, food court and a player's lounge.
Penn estimates the casino will create 3,500 temporary construction jobs and 2,000 permanent positions. According to the Ohio Department of Taxation, the casinos in Columbus, Cleveland, Cincinnati and Toledo will generate $643.3 million annually for the state, with Columbus, Franklin County and local school districts taking in about $64.1 million a year.
The company, which already operates 22 gaming facilities, purchased Beulah Park racetrack on Columbus's South Side in March and recently broke ground on its Toledo location. Hollywood Casino Columbus "will be one of the centerpieces of our portfolio, in terms of gaming assets," says Schippers.
While Penn readies the land, which now sits in Franklin Township, public officials are making site preparations of their own.
This spring, the township signed an annexation deal with Columbus that will pay Franklin an estimated $67 million in tax revenue over 50 years and created a joint economic development district. A portion of casino income taxes will be directed toward infrastructure improvements.
"We're trying to make this something special, and we're trying to make this right the first time," says Tim Guyton, chairman of the township board of trustees. Franklin Township will get roughly $1.25 million annually from the agreement. That's a nice chunk of change considering its current annual operating budget is less than $8 million.
Still, not everybody's happy: "The township did not get a fair share," says trustee Don Cook, who believes $3 million to $4 million would have been more reasonable.
Columbus Mayor Michael Coleman calls the deal "generous and fair on both sides. We share the opportunity here because I believe in my heart that if we can encourage regionalism that benefits multiple jurisdictions, we should try to do it."
Now that the ink has dried, local leaders are eager to get the ball rolling. "Our goal was to get the West Side revitalized and to get the Delphi site occupied," says Guyton. "We don't want to be known only as the ‘casino area.' We fully support Penn National's efforts. However, that being said, we're looking for other businesses or uses that will supplement the casino."
Guyton envisions an entertainment district with a regional sports facility on Georgesville Road, as well as restaurants and retail. "Our goal is to uplift the community using the casino to drive future development," he says. A joint overlay district will provide unified zoning between city and county properties.
To prepare for the presumed influx of visitors, Georgesville Road-the casino's main entrance-will be reworked. New sidewalks, lighting, landscaping and a turn lane will be added, says Franklin County Engineer Dean Ringle. He estimates the project around $10 million; the county-Penn cost split has not yet been decided.
In addition, the Ohio Department of Transportation (ODOT) will fund $24.1 million of improvements along West Broad Street, including new sidewalks, bike lanes, raised islands, trees, bushes and lights. However the project, which was planned in 2004, won't get under way until 2013.
Timing is important, but the key is to get the work done, says Coleman. "There is a great opportunity for private investment as a result of the public investment," he says.
Dreams of ‘Weston'
A considered, measured approach to redevelopment is essential, says Haydocy, president of Haydocy Automotive. "If we just allow it to be the Wild West and let people develop what they want in the fashion they want, then we'll never meet those expectations. But if we work with folks and we think about what we want to do-which we are, there are groups meeting and talking about this-if we take that approach, we'll be fine. I think then people's expectations aren't pie-in-the-sky."
There's one other change community leaders would like to make. They'd like to be known as Weston. "There's not going to be anymore Westland Mall or West Side or Westland area," Ruben said at a Columbus Board of Realtors event in August.
Ruben, who coined "Weston" when buying an interest in the mall, makes no bones about the origin: "Easton paved that way for us-it's pretty cheap marketing." Though the area isn't likely to draw high-end eateries such as Easton's Brio, he said, it could have an Olive Garden or a Max & Erma's: "Everybody's a consumer."
Ruben is planning a major renovation of Westland, er, Weston. A successful mall (which to Ruben likely includes outlet stores) could make a big difference in tax dollars alone, says Haydocy. "A thriving mall usually does $300 per square foot per year, and they've got 1 million [square feet], so you've got $300 million. If you just take the sales tax alone, that's $21 million," he says.
On West Broad Street, the casino "will have a ripple effect no other site would have created," Ruben told the Realtors. "The area will prosper. ... The West Side was a perfect location to do this. It'll be good to Penn, but it'll also be good to us."
Government and community leaders may be hailing Penn National as their savior. But there's no guarantee any of the projected 10,000 daily visitors will actually stop at local businesses on their way to and from the penny slots.
Casinos "don't sell automobiles, they don't sell every type of service," O'Grady says. "If I'm a restaurant owner or a tavern owner, I've got to have my questions or concerns." But, "If you create a district, if you create an environment that is of interest, then you have a whole different ballgame there. It becomes not just about this one casino, but about a lot of the different types of services that can be put there that the casino doesn't have."
Optimists say the new casino jobs will mean improved employment prospects. Critics counter that most of the jobs will disappear after construction. Schippers says Penn National wants to both hire and shop locally and has a particular interest in working with minority- and women-owned enterprises. The end result: more people with cash to spend in the neighborhood. Presently, micro-sections of the West Side have an unemployment rate as high as 20 percent, says Haydocy. That's nearly double the statewide rate of 10.5 percent that the U.S. Bureau of Labor Statistics reported in June.
"It's going to allow those who actually live on the West Side to go out to eat, because they're employed. They can take their families, so therefore there's an opportunity for someone who, say, wants to be in the avenue of restaurants to do that, to open up a restaurant," says Columbus City Council President Michael Mentel, a West Side native. The casino "is more than an economic shot in the arm. This is, I think, a situation that will allow economic growth and stabilize the West Side of Columbus, which, in turn, helps stabilize the rest of the city," he says.
With the grand opening two years away, it remains to be seen how much of the optimism is grounded in reality. There have been enough studies on the impact of casinos to fill a bookshelf, and all have one thing in common: They say casinos create more of an economic development black hole (Can you hear the sucking sound?) than a path to economic prosperity. Customers show up at the windowless monoliths, gamble, maybe eat at the buffet and drink a few beers while playing blackjack, then hop in their cars and go home. They don't stop to shop, have a sit-down meal or otherwise patronize area businesses, except perhaps pawn shops and payday lenders if they need to offset their gambling losses.
Still, properties close to the casino have been changing hands like trading cards in recent months-despite an overall CRE slowdown. Hope, it seems, springs eternal.
One of the poster children for the casino's positive impact was Michael Copella, vice president of sales and leasing with Alterra Real Estate Advisors. He listed Cirilla's, an adult novelty store across West Broad Street from the casino site, in December and found a buyer the next month. The sale initially hinged on the passage of Issue 2, but fell out of contract when "the buyers did not perform," Copella says. "So now we're working with a couple of other buyers and tenants to get a deal done."
Still, Copella's not deterred. The closer a property is to the casino, the more attractive it will be to both buyers and lessees, he predicts: "Any time that you have a $400 million private investment, there's companies and businesses that will want to have proximity to a development like that."
Commercial real estate agent Aaron Gilbert of the Gilbert Group, which represents three properties on West Broad Street and one on Georgesville Road, says retailers will benefit from the casino's presence, though to what degree no one is certain.
"Just the way casinos are set up, they try to do as much business inside the casino as possible. They want all the money spent inside the casino," Gilbert says. "But we tend to think there's still going to be people coming from out of town, a lot of additional traffic there, and a lot of people with some discretionary income. And we think that will be disbursed, whether it be restaurants or hotels or whatnot around the corridor."
Fast-food restaurants and gas stations are among those most likely to benefit from the additional traffic, says Andy Mills, vice president of Continental Realty, which has several nearby listings. "The news of the casino choosing to relocate there, no matter what your political stance on having a casino and gambling, did bring good redevelopment news to that area," he says.
Penn National, meanwhile, points to its Hollywood casino in Kansas City, Kan., construction of which drew a $100 million residential construction project and destination retail stores such as Cabela's outdoor outfitters and Nebraska Furniture Mart.
Schippers all but promises Penn's new casino will do the same for Columbus's West Side. "There's a level of new excitement and new energy in that area that hasn't been there in a long, long time that we're proud to be responsible for," he says. "We are going to be driving new revenues and new jobs and new opportunities in that area, and what will follow is a significant level of new potential customers for other area businesses. ... It makes sense that you're seeing property values increase, you're seeing other businesses look to reinvest in themselves, because we have had a tremendous amount of success building these facilities around the country, and we know the volume of new customers and new business that's going to come to the area."
Coleman, however, takes a more measured approach. "The casino is not a silver bullet for the West Side. The casino is not a panacea for the West Side. We have to hold it in perspective, and I sometimes get concerned about expectations of the casino site," he says. "But it is the foundation-if done properly-for other economic development spin-offs in the area."
Curtin says Penn's development model, which was still under wraps as of early September, holds all the cards. He says casinos can be virtual vacuum cleaners, sucking away business from their neighbors, or they can be wealth-spreading catalysts. Penn has the opportunity to "build in a manner that eventually brings on the verdict that this was great for the community," Curtin says.
"People will be more inclined to visit an area that has a lot of things going for it rather than visiting an area that has one thing going for it," he says. "It's incumbent on Penn National, it's incumbent on our elected officials-city, county and state legislative-to do everything possible to make this development a success, not only for Penn National and its investors, but for the community at large."
Jennifer Wray is a staff writer for Columbus C.E.O.
Reprinted from the October 2010 issue of Columbus C.E.O. Copyright © Columbus C.E.O.