Let the buyer beware. It's a fundamental tenet of commerce.
When Detroit businessman Don Barden applied for the state's only casino license for Pittsburgh, he agreed to contribute $7.5 million a year toward the construction of a new facility to replace Mellon Arena. Then, when Holdings Acquisition Co. LP took over the construction, operation and ownership of the North Shore's Rivers Casino last year, it agreed to keep that commitment to arena funding.
But the new owners say they never agreed in writing when they'd make the payments. And they disagree with the assertions of the city-Allegheny County Sports & Exhibition Authority, which says the first check is due Oct. 1, and that another payment is due on that same date annually for the next 29 years. The owners say they were told during negotiations last year that their first payment wouldn't be due until at least 2010.
The disagreement extends beyond the payment dates. For one thing, the casino owners want a commitment that, if the state approves any more casino licenses within a 60-mile radius of Pittsburgh, those operators would have to ante up for the arena as well.
That may be a valid argument, but it's come too late.
Holdings Acquisition Co., led by Chicago developer Neil Bluhm, knew what they were getting when they took over the casino and its license from Mr. Barden, and the SEA didn't just pull the payment dates out of the air. A year earlier, on Sept. 15, 2007, when the authority issued $313 million in bonds to fund construction of the arena, the legal documentation included a schedule that lists 30 equal payments of $7.5 million with due dates of Oct. 1 2009 through Oct. 1 2038.
That information was well-known in August 2008 when the license transfer took place. Any further details that the Rivers Casino owners wanted to negotiate should have been worked out before the license changed hands. The SEA already has compromised by agreeing that the casino could make two payments a year instead of one lump sum.
This deal is done.