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Group Opposed to Paolino Casino Proposal in Newport

Tuesday, May 06, 2014


Will table games be back on the ballot in 2014 in Rhode Island for Newport Grand? Several developers and investors are betting on it.

Members of the group Citizens Concerned About Casino Gambling are voicing their opposition to the announcement by developer Joseph Paolino, Jr. and investors that they want to purchase and revive Newport Grand -- if table games at the slots parlor are approved by voters on the ballot in November.

Following the revelation that former Mayor of Providence Paolino, along with an investor team including Peter de Savary and Paul Roiff, signed an agreement with Newport Grand owner Diane Hurley, a new video opposed to the effort was unveiled on the site's website on Monday, less than two years after Newport voters defeated a tables game measure in 2012 by a vote of 52.9% to 47.1%.

See Opposition Video BELOW

"Citizens Concerned About Casino Gambling is made of members who oppose gambling for a number of various reasons," said group member and Newport City Councilman Justin McLoughlin. "We're not uniform -- we're kind of like Unitarians.  It's people who oppose casino gaming on moral grounds, those who don't see as good for community, some who don't see it as good economic policy, those who oppose it because it doesn't appear to make sense."

McLoughlin continued, "Are you buying a pretty pig, and just to dress and sell it?  A pretty rendering does not make a successful outcome for a community."

While not with the "concerned citizens" group, Mike Stenhouse with the Rhode Island Center for Freedom and Prosperity voiced his opposition.

"The insatiable appetite for revenues by our political class, whether in the form of higher taxes, new fees, or gambling proceeds is what has been strangling our state's economy for decades," said Stenhouse. "It must stop. No matter how they take money out of the pockets of families and businesses, and then spend it on their priorities or their friends, it's bad for economic growth, and the cycle only perpetuates itself. We must cut spending - and taxes - to save our state."

Paolino said that he has had communication with those opposed to expanded gaming in Newport, including the Concerned Citizens group.

"I said to them that even though we may have a disagreement, we don't have to be disagreeable," said Paolino. "If anyone states that they want to stop gaming, there has already been gaming in Newport for years."

"This is just another form of gaming -- once you see with Foxwoods, what they plan to do in Fall River, we're talking 200 people out of jobs," Paolino continued, referring to the potential impact from competition in Massachusetts for Newport Grand just over the state border, with Rhode Island expected to lose $422 million in five years from Massachusetts casinos.

Paolino Unveils Plans

The artist rendering of how Newport Grand would look with a $40 million upgrade from Joe Paolino and partners.

Paolino, whose Newport property holdings currently include the Vanderbilt Residences at Brown and Howard Wharf, has joined forces with Peter de Savary, who counts over seventy projects in nine countries including Carnegie Abbey in Portsmouth, and Paul Roiff, a Rhode Island native and Boston real estate developer, to develop the property, should table games garner voter approval in November.

Paolino noted that the lobbyist for the effort would be current Newport Grand lobbyist Chris Boyle, and paid for by Newport Grand.  Newport Grand owner Diane Hurley did not respond to request for comment on Monday. 

"Over $3 million has been invested already to bring up the facility up to code," said Paolino. "We're concerned that how it looks, it's just not attractive. What we want to see it become is a Monte Carlo. It's not going to compete with big casinos-- it's a boutique facility.  It will have entertainment. We'll work with Newport Jazz Festival, folk festivals, not just in the summertime, but for winter, fall, to use our facility."

Paolino addressed what he perceived would be a major distinction in 2014, as opposed to 2012.

"We're encouraged, because the people of Newport voted for Twin River last election," said Paolino. "We believe it was voted down in Newport last time because [voters] believed there would be satellite facilities," noting that the investor proposal would be for the current Admiral Kalbfus Road location -- and nowhere else. "It would be only that site," Paolino said.

English international entrepreneur, yachtsman and philanthropist de Savary spoke to the economic impact of the facility --  as well to points made by opponents. 

"[Newport] receives $1 million a year [from Newport Grand], and the state, $20 million," said de Savary. "It's important that this is maintained, hopefully by what we plan on doing -- creating a full entertainment venue. If we spend $40 million to improve the facility, you'll attract more people, and range of people from all over."

de Savary addressed the argument that an enhanced casino could take away from the existing business base. "We think it's compatible with the character of Newport, to the grand mansions, the attractive Tennis Hall of fame... I think we can create something here that looks attractive coming over the bridge."

"It's like saying we've got 25 shops in town, we better not add another. I don't think that's in the best interest of Newport. Two plus two won't come to four -- there are people who are afraid it's 3, but it's actually 5."

Twin River, whose table games ballot effort, unlike Newport Grand, was successfully approved in 2012, is among those who support the Paolino group efforts in Newport.

"As was the case two years ago, we support the addition of table games at Newport Grand. A competitive, strong Newport Grand is good for the State from a revenue and jobs perspective, particularly as we brace for the eventual impact of casinos in nearby Massachusetts," said Twin River spokesperson Patti Doyle.

Looking Forward

Voters statewide -- and in Newport -- will need to approve table games on the ballot this November for a new investment in the property announced this week to move forward.

"I believe Newport Grand is an important source of state and local revenue, I anticipate I would support legislation again," said Senate President -- and Newport resident --  M. Teresa Paiva-Weed. "I share the concern that many have that in order for the facility to be able generate the revenue for the city and the state that we be able to ask voters in light of the competition from Massachusetts."

"I anticipate that the one distinguishing factor in a proposal moving forward is that there would be unequivocal language that any facility would be located its current location and no where else," continued Paiva-Weed, who added that it was "premature" to discuss terms prior to the Newport City Council voting on a resolution requesting that the question be placed on the November ballot.

Senator Lou DiPalma, whose district includes Little Compton, Tiverton, Middletown, and Newport has been part of the Citizens Concerned About Casino Gambling Group in the past -- and said he will continue to oppose efforts to expand gaming at Newport Grand.

"[Newport Grand owner] Diane Hurley has been looking for buyers for a while, and she's doing the best she can with the facility she has," said DiPalma. "My take is this. I don't knock anyone who likes going to a casino. I've been to Las Vegas, I've been to Twin River twice. If it's how people chose to entertain themselves, power to them."

DiPalma continued, "However, we need development that adds to the GDP of our state, which isn't gambling. I don't have the silver bullet. Growing the economy is hard work. We need the residuals of say tech companies, something that contributes to the GDP from a products or services perspective."

"Lottery's the third largest revenue source for Rhode Island. We'll certainly be impacted by Massachusetts," said DiPalma. "Our challenge is our reliance in the state on casino gambling. We're addicted to it."




Related Slideshow: 7 Strategies for Rhode Island Economic Development in 2014

What will it take to move the Rhode Island economy forward in 2014?  GoLocal talked with elected officials, candidates, and leaders for their economic development plans in the coming year. 

Below are key elements of the economic priorities for Governor Lincoln Chafee, Speaker of the House Gordon Fox, Senate President M. Teresa Paiva-Weed, House Minority Leader Brian Newberry, gubernatorial hopefuls General Treasurer Gina Raimondo and Ken Block, and RI Center for Freedom and Prosperity's Mike Stenhouse.  

Prev Next

Governor Lincoln Chafee

"My goal is to have the state continue to focus on the fundamentals.  We will invest in education, workforce development and infrastructure , and provide aid to  cities and towns to lessen the burden on property taxpayers.  I’m confident that these investments and our focus on the basics will allow Rhode Island to exceed Moody’s predictions.”
Prev Next

Speaker Gordon Fox

"Among the many pieces of legislation the House will address will be issues of higher education affordability, expanding apprenticeship opportunities, and offering help to our manufacturers.  We will also look closely at our tax structure to make sure we are competitive with our neighboring states, including the corporate tax and the estate tax, and I will carefully review the recommendations of the commission studying our sales tax.”

Prev Next

Senate Pres. Paiva-Weed

Greg Pare, spokesperson for the Senate President, said that the Senate is planning to issue recommendations soon on workforce development initiatives to address the skills gap among Rhode Island job seekers.

"An example of a proposal anticipated in that report is the elimination of state’s Indirect Cost Recovery on the Job Development Fund, which is about $1.2 million this year. Those funds would be directed towards job training and skills development programs to provide immediate impact and help workers gain the skills necessary to succeed in today’s economy."

Prev Next

Gen. Treasurer Raimondo

"To grow our economy, we need to make Rhode Island a leader in manufacturing again.  Great things can happen at the intersection of government, higher education, and the private sector.  Rhode Island is lucky to have thriving institutions in each of these three sectors, and we need to foster collaboration among them to find solutions to our challenges, and spark our economy.  

By promoting partnerships in high-growth areas, [Rhode Island Innovation Institute] will help grow our manufacturing base, and create new, high-quality jobs."  

Prev Next

Ken Block

"First, we need to fix Rhode Island’s broken Unemployment Insurance program. The state’s Unemployment Insurance tax, paid by employers, is ranked worst in the country by the Tax Foundation. It is one of the factors that makes Rhode Island an uncompetitive place to do business. Also, it is inherently unfair that a large group of businesses are effectively subsidizing the payrolls of a small group of businesses who misuse the system. There is a simple change to state law that can fix this problem."

"Rhode Island’s temporary disability tax (TDI) is broken, and places an unnecessarily high tax burden on Rhode Islanders. This tax, paid for by employees, will be reduced by changing the way we manage the program. As Governor, I will substantially reduce the cost of purchasing this insurance by requiring that Rhode Island’s program adhere to national norms."

"To best encourage new job creation, I propose the following tax incentive: exempt from future capital gains taxes any new investments in Rhode Island-based businesses. This change would create a powerful incentive for investors who are deciding where to locate a new business, or where they relocate an existing one. This proposal has the potential change the economic playing field for Rhode Island."

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Minority Leader Newberry

“It would be overly ambitious to set being #1 as a goal right now, but we think 25, the middle of the pack, is a reasonable goal to set, one we think we should pursue, and one we can achieve,” said Newberry. "One of the initiatives is a requirement that every bill receive a fiscal evaluation before it can be heard by committee, better insuring that legislators know the real cost of the legislation they are acting on."

"Another proposal would exempt social security income from RI state income tax, making Rhode Island more tax-friendly for our seniors and keeping them here rather than migrating to more tax-friendly states."

“Strong action is way overdue here. Nearly 60% of Rhode Islanders now believe that the state is headed in the wrong direction. We think they’re right, and our central goal is to get it turned around."

Prev Next

Mike Stenhouse

"As part of the Center's 2014 Prosperity Agenda we recommended that the state:
Repeal or rollback of the state’s regressive sales tax; or the requirement that families have no choice on what schools best educate their children; or punitive estate taxes that drive wealthy people to other states; or restrictions on out-of-state companies to sell health insurance in RI; or the minimum franchise tax, which stifles entrepreneurship; or corporate welfare, to level the playing field; or even renewable energy mandates that drive up costs for every family and business …"

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