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CASH OF THE TITANS 

Issue 3 pits wealthy men against each other in bid to get even richer

They are like the mega-monsters of Japanese cinema, swatting at each as they rumble through downtown Cleveland, stomping on those who don't run fast enough. They are the giant figures of this election season, fighting for control over staggering wealth.

In reality, they are just men — very, very rich men with familiar last names and links to Cleveland's landmarks and sports teams. Recently, they fought over the location of the highly touted medical mart and convention center. Today, they grapple over gambling. They've unleashed salvo after salvo of rhetoric, mudslinging and conflicting data in an effort to influence how you vote on Issue 3.

The questions for Greater Clevelanders: Do you trust wealthy pro-casino interests — in this case, Cleveland Cavaliers owner Dan Gilbert — to deliver on the latest promise of blue-collar and hospitality jobs, multi-million-dollar tax payments and yet another facelift of downtown Cleveland? Are you willing to give away a piece of the Ohio constitution in exchange for those promises?

Issue 3, a proposed constitutional amendment, would allow one full-scale casino in each of the state's largest cities: Cleveland, Columbus, Toledo and Cincinnati. The proponents are led by the 47-year-old Gilbert, a Detroit native best known as the man who signs LeBron James' paychecks. Gilbert's most visible partner in his efforts is Penn National Gaming, a Pennsylvania-based company that operates a dozen casinos as well as Raceway Park in Toledo.

The proposal allows casinos to be built and operated on specific pieces of property in each city. The amendment does not say who will actually own and operate the casino: The language doesn't explicitly mention Gilbert or Penn Gaming, just generic "casino operators." (Gilbert has stated that he would control casinos in Cleveland and Cincinnati, Penn National in Columbus and Toledo). But Gilbert and Penn seem confident that they'll benefit from pre-arranged deals with the landholders.

The public benefit? A 33 percent tax of gross casino revenues, job creation and a boost in downtown tourism thanks to a new attraction just west of Quicken Loans Arena.

The loudest opponent isn't a preacher or politician, but a rival gaming interest. A coalition of naysayers calling themselves TruthPAC is led by MTR Gaming Inc. chairman and majority owner Jeffrey P. Jacobs — of the Jacobs real-estate dynasty.

Sandy Theis, a spokeswoman for TruthPAC, calls Issue 3 an "embarrassment" and a "joke." TruthPAC has cried foul about the $200 million in licensing fees the state will collect (much less than other states), as well as the tax rate. Theis says the numbers aren't good enough. "They wrote themselves a sweetheart deal," says Theis.

We've seen this fight before. Last year, Penn National opposed another proposed constitutional amendment that would have created one resort casino in Wilmington. Penn National owns a casino in Indiana and saw a new casino as a competitor. And in 2006, Penn actually joined MTR, Jacobs Entertainment and Forest City Enterprises, among others, to support a gambling initiative that ultimately failed. (This parade of ballot measures, each attempting to carve a narrowly focused business deal into the marble of the state constitution, is the result of the legislature's unwillingness to touch the controversial issue of gambling.)

Is Gilbert's plan any different? He calls it the best proposal so far, in terms of economic benefit to the state, and he could be right. But it's still a manipulation of the constitution, and for many, that's a deal-breaker.

During a debate at the City Club Monday, Youngstown Mayor Jay Williams challenged Gilbert before an audience of luminaries including Mayor Frank Jackson, lawyer Fred Nance and Browns icon Bernie Kosar. The charismatic 38-year-old Williams represented Jacobs' Truth PAC, which has recruited politicians statewide in order to boost its legitimacy. Williams says wealthy businessmen are misusing the Ohio constitution to enrich themselves.

Rather than limit gaming to a few interests, he said, there should be open bidding for licenses, which would raise their value and ensure a fair cut for the state. Gilbert, as well as some experts, counters that the 33 percent tax on gambling revenues is generous enough, especially for a market like Cleveland, which faces little nearby competition. Williams still contends that what's proposed amounts to a legal monopoly.

"I hope that Mr. Gilbert will divulge who all of the partners, participants, investors, shareholders, lease holders and contract owners are," says Williams. "Because the public has a right to know who will be meddling with and cashing in on our state constitution."

So far, Gilbert hasn't disclosed that information, saying he hasn't decided yet with whom he would partner to operate the casino. At the same time, Gilbert told Scene he'll break ground the day after Election Day, should the issue pass.

For all the vagueness of the constitutional amendment, there is some astounding specificity to be found in the amendment's wording: the list of designated parcels put aside for casino construction. In Cleveland, this includes roughly 83 acres of real estate. The Cleveland casino will, parcel-for-parcel, go on land owned by Forest City Enterprises. Gilbert would set up shop on land just south of Tower City, or the adjacent Scranton Peninsula in the industrial flats, just across the Cuyahoga River, all owned by Forest City.

It would represent a comeback of sorts for the real-estate giant, which lobbied hard for a medical mart on the same land. (Or perhaps it's a consolation prize; the medical mart is going to Mall B, near prime Jacobs property.) Jeff Linton, a spokesman for Forest City, says the company was in talks with Gilbert at the same time it was bitterly trying to hang on to the medical mart deal.

The company has stayed in the background — Gilbert's face is much more recognizable. "It's not our issue," Linton says. "We're not a gaming operator. We are not interested in opening a casino." The company has not even invested in the Issue 3 campaign, Linton says.

Still, Forest CEO Charles Ratner stressed the importance of passing Issue 3 at a recent speech and said the company is telling its workers to vote in favor it. "If Cleveland succeeds with the convention center and casinos, I'll be really happy [the medical mart] went elsewhere," Ratner told the audience. "Tower City will be more valuable."

Meanwhile, Jacobs is hoping the issue fails so he might have a shot at getting his piece of the pie in the future. Jacobs has called for the development of a 1,000-room, $500 million convention/casino hotel adjacent to the convention center/medical mart, a move that didn't gain much traction in the media and that even Governor Ted Strickland brushed off.

The rivalry between Jacobs and the Forest City-Gilbert alliance became clear during the City Club debate. "I kind of wish Jeff Jacobs was next to me instead of you," said Gilbert to Williams in a quip that drew laughter from the audience. "You're a lot more likable, that's for sure."

dguevara@clevescene.com

More by DAMIAN GUEVARA

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