Letter: Vendor warned Petersburg about lawsuit potential for accepting pre-approval casino bids

PETERSBURG – At least one of the five companies bidding for Petersburg’s casino business raised questions with the city about soliciting bids for the development based on hope that the state legislature would allow Petersburg to get it.

In a Feb. 21 letter to City Manager March Altman, The Warrenton Group said they raised the questions because when the city called for the bids, its fate as a casino host city was still in the hands of the Virginia General Assembly. The request for proposal that Petersburg put out on Feb. 12 called for not just a casino but also for a “destination resort” that would include a hotel and entertainment venues.

That RFP, which council claimed was recommended to them over the advice of the city attorney, was cancelled April 24 when council unanimously opted to go with The Cordish Companies and its co-developer, Bruce Smith Enterprise.

“We are aware of the significant tax revenue that can be generated by this effort, but this solicitation is far more than a casino,” read the letter, signed by TWG president and chief executive officer Warren Williams and Brandon Booker, director of development for Marriott International. The D.C.-based Warrenton Group is affiliated with Marriott, and the world’s largest hotelier was expected to be the branded lodging for Warrenton’s proposal, along with Delaware North as the casino operator.

“This solicitation is the foundation for a renewed city of Petersburg,” the letter stated. “It will serve as the economic driver to reduce unemployment, expand residential and commercial development and exponentially increase city revenue for projects that have been identified, but unfunded.

“Succinctly put, until the bill becomes a law, the city may face legal challenges by unsuccessful offerors who may allege that Petersburg is not yet an eligible host city and the true specifications of this enabling authorization cannot be known.”

Warrenton was among the vendors who were unsuccessful in landing the casino contract. That went, instead, to The Cordish Companies, who partnered with Petersburg on its unsuccessful casino bid last year. That decision has been panned by political and labor leaders, the latter of which have announced they plan to sue Petersburg over the process as a violation of Virginia’s government-sunshine laws.

The P-I has learned that the city never responded to Warrenton’s letter.

The Warrenton letter was emailed to Altman at a juncture in time when the Assembly was still deliberating Senate Bill 628. It already had cleared the Senate by then, but on Feb. 20 – the day before the letter was sent – a House General Laws subcommittee had recommended attaching a re-enactment clause to the bill that would require a second General Assembly passage before Petersburg could get the measure on a November referendum.

The day after the letter was sent – Feb. 22 – the entire General Laws Committee approved the amendment. It ultimately got through the House, and the Senate agreed to the amendment, leaving it up to Gov. Glenn Youngkin to either sign it, veto it or change it.

The governor opted for the last. He asked for the re-enactment clause to be removed, and both the Senate and House sided with him.

Meanwhile, City Council voted Feb 12 to go ahead and issue the RFP but made it contingent on total Assembly passage and Youngkin’s approval. The Senate had just approved it three days prior, but the House had not gotten its chance to vet it.

In the letter, a copy of which was obtained by The Progress-Index, Williams and Booker asked for responses from the city on three major questions:

• “Does the City have the authority to close the question/comment period required under law, before the General Assembly and Governor have enacted this enabling legislation and set forth the mandatory considerations?”

• “Can the City close the question period and establish a submission deadline in advance of legally becoming an eligible host city pursuant to the Code of Virginia?”

• “Can the City set the specifications required under the RFP before it is an eligible host city and the exact specifications have been instituted by law?”

The letter said it raised the questions “in the spirit of a future successful partnership” with Petersburg.

The P-I has been unable to confirm if any of the other bidders – Bally's Corporation, Rush Street Gaming, Penn Entertainment or Cordish – raised similar questions.

Warrenton’s proposal to the city was twofold. In addition to the casino-hotel development on South Crater Road near Walmart, the group also said it had partnered with the Upper Mattaponi Native American tribe to develop portions of Pocahontas Island in north Petersburg. That development included a new hotel, retail space, walking trails and a health hub, housing for Virginia State University students, and a restaurant on the banks of the Appomattox River.

Warrenton has not said if the casino rejection will affect its plans for Pocahontas Island.

To date, the only threat of a lawsuit against Petersburg has come from Unite Here Local 25, a hospitality union with 8,000 members in Virginia. UHL25 said April 30 it planned to sue Petersburg over the Cordish decision claiming that council violated the Virginia Freedom of Information Act when it discussed and then voted on Cordish without giving the public proper notice or opportunity to comment.

Bill Atkinson (he/him/his) is an award-winning journalist who covers breaking news, government and politics. Reach him at batkinson@progress-index.com or on X (formerly known as Twitter) at @BAtkinson_PI.

This article originally appeared on The Progress-Index: Casino vendor questioned validity of accepting bids before casino approval