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City to use gambling impact funds to pay for steam pipeline

$3 million set aside for communities will instead be used to relocate a steam line

Above: Horseshoe Casino, shown along Russell Street, is scheduled to open next week.

The Board of Estimates is expected tomorrow to peel off $3 million in gambling impact funds set aside for South Baltimore communities to pay for a relocated steam pipe that serves downtown institutions.

Combined with the city’s plan to pay for street improvements around the Horseshoe Casino, the allocation means that much of the projected $10 million in first-year funds for neighborhoods impacted by the casino will instead go to projects immediately around the facility.

“What’s going to be left for us?” asked James Alston, who represents the Westport neighborhood immediately south of the casino.

“The city is using money for things that were never intended by the state legislature. This money is supposed to go to the communities, not for the city’s or the casino’s needs, “Alston said in an interview. He sits on the Casino Local Development Council that is supposed to set priorities for the use of the impact funds.

The Rawlings-Blake administration will use the $3 million to reimburse CBAC Borrower, an entity controlled by Caesars Entertainment, the casino’s operator, for relocating the pipeline.

These funds are in addition to the $6 million in local impact funds, spaced over a three years, that the city plans to pay CBAC for street improvements. The Brew disclosed that deal two years ago. (Here is the city’s non-responsive response.)

State law calls for impact funds to be used for “improvements in the communities in immediate proximity to the VLT [Video Lottery Terminal] facility.”

Alston said a steam pipeline does not qualify in his mind as either a “community” or “in immediate proximity” to any community.

He said the Local Development Council did review the idea of using impact funds for the steam pipeline but never took a vote on the matter. The allocation is not listed in the “Year 1 Proposed Spending Plan” posted on the group’s website.

“The surrounding communities have already taken a hit from the reimbursement deal for the street improvements,” Alston said. “Now the powers-that-be expect communities like my own to sacrifice more?”

He added, “The city will collect lease payment from Horseshoe. This could be an alternative source [for funding] the pipeline relocation.”

Decision made last May

According to the agenda, the Rawlings-Blake administration decided to relocate the underground steam line in May and called on CBAC to do the work.

To date, CBAC has paid $1 million for the pipe’s relocation “with the caveat the City agrees to reimburse [it] for the first $1,000,000 and cover the additional construction costs expected to total $3,000,000.”

The agreement further specifies that “the reimbursement funds and the funds to cover the remaining costs are proposed to be future Local Impact Funds generated from the Horseshoe Casino.”

Baltimore is expected to receive $10 million in local impact funds from gambling in fiscal 2015. (This amount might be larger because the Horseshoe Casino is scheduled to open next Tuesday, or five weeks earlier than its expected October 1 start.)

Of the $10 million projected for fiscal 2015, $2 million is already allocated to CBAC for street improvements. The $3 million before the board would presumably come out of the first-year pool of impact funds.

Scalded Gamblers?

The city said that a study had determined that the 45-year-old steam line could pose a safety hazard to gamblers crossing Warner Street to enter the casino.

Of special concern were the three manhole covers in the street that could leak scalding-hot steam onto unwary patrons – or even blow up if the pipeline ever ruptured.

The steam line originates at the city’s BRESCO trash-burning plant in South Baltimore and runs downtown where it serves federal office buildings, municipal office buildings, the Baltimore Convention Center, Mercy Hospital, the University of Maryland Medical System and other institutional customers.

The network is under long-term lease with Veolia, the French-owned transportation and energy conglomerate.

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