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Norfolk — The developer behind the revamp of Norfolk’s Waterside is once again threatening to sue the city over its casino deal with the Pamunkey Indian Tribe after Norfolk voters approved the tribe’s waterfront gambling resort.
The city has called the threatened lawsuit baseless and said its offers to discuss the issue have been rejected.
Cordish, the Baltimore-based developer that overhauled the city’s then-ailing Waterside development in 2013 and has since said it wants its own casino there, told WAVY this week it would be making good on its earlier threat to sue the city over the Pamunkey deal.
“The City breached its exclusive agreement with Cordish initially in 2018 and continued its breach thereafter. Regretfully, the City has left us no choice but to file suit to protect our legal rights and we will be filing suit in due course,” Cordish COO Zed Smith is quoted as saying in the WAVY story.
Efforts by The Virginian-Pilot to reach Cordish for comment by phone and email were unsuccessful this week. As of Friday, no lawsuit had been filed.
In the lead-up to the referendum, Cordish secretly backed a group opposed to the referendum. The language of the referendum approves the development of a casino specifically at a site next to Harbor Park now controlled by the Pamunkey Indian Tribe.
Despite tens of thousands of dollars from the developer and related businesses spent on the Vote No effort, the referendum was overwhelmingly approved by Norfolk voters this week.
About 67,500 voters weighed in on the referendum, with 64.4% voting yes on the casino.
In a series of letters sent in January and February, attorneys for Cordish threatened to sue the city for breaching the lease agreement between the developer and the Norfolk Redevelopment and Housing Authority, which owns the Waterside property.
The main arguments: that Norfolk giving the Pamunkey an exclusive deal to build a casino and not helping Cordish get approval for a casino of its own at Waterside violate the lease between Cordish and the housing authority.
That deal says the city won’t give subsidies to any major restaurant or entertainment projects in the city until 2023 that could be in competition with Waterside.
The city isn’t giving any kind of direct incentives or grants to the Pamunkey Indian Tribe or its partners to build the casino. However, Cordish’s lawyers argued that giving the tribe an exclusive deal to build a casino is as good as a subsidy, since being the only game in town provides “an extremely valuable economic benefit.”
The lawyers also said the housing authority and city had a responsibility to help Cordish get authorization for a casino at Waterside if the state’s laws ever opened up the possibility.
When the last letter was sent in February, Cordish threatened to file a lawsuit within 90 days if the city didn’t correct the breach of contract — effectively, asking Norfolk to end the exclusive casino deal with the tribe. That didn’t happen, but Cordish hasn’t sued yet.
Norfolk City Attorney Bernard Pishko wrote in a letter to the Waterside operator earlier this year that the Pamunkey deal doesn’t represent a breach of any agreements with Cordish.
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Pishko wrote in an email to The Pilot on Thursday that the housing authority and city “have repeatedly expressed a willingness to meet with Cordish to discuss amending the Waterside Lease and Cordish has repeatedly declined to do so.”
He also noted that the referendum approved by voters this week was specific to a location near Harbor Park, and would not permit the operation of a casino at Waterside.
Cordish also backed a group aiming to defeat the referendum for the Pamunkey casino.
More than 80% of the contributions to Informed Norfolk, the committee that ramped up several weeks before the election to oppose the referendum, came from businesses affiliated with Cordish.
Red Banyan, a public relations firm out of Washington, D.C., is on retainer with Cordish. That firm helped the opposition group get its message out, to the tune of about $5,000 worth of services.
Three restaurants located at Waterside — Guy Fieri’s Smokehouse, Blue Moon TapHouse and PBR Norfolk — each donated $5,000 to the opposition group as well.
Ryan Murphy, 757-739-8582, ryan.murphy@pilotonline.com