Norfolk Faces Threats of Legal Action for the Casino Deal

Norfolk City Council is again facing threats of legal action from the developer behind the revamp of the city’s Waterside over the waterfront casino deal with the Pamunkey Indian Tribe.

Developer Will Seek Legal Action

Norfolk residents overwhelmingly voted to approve the casino November 3 and Cordish, the developer based in Baltimore, which revamped the Waterside development in 2013 and has been constantly denied to build its own casino there since then, confirmed its intentions to sue the city over its deal with the tribe.

“The City breached its exclusive agreement with Cordish initially in 2018 and continued its breach thereafter. Regretfully, the City has left us no choice but to file suit to protect our legal rights and we will be filing suit in due course.”

Zed Smith, COO, Cordish

Norfolk city officials consider the threats baseless and had any attempts to further discuss the issue rebuffed by the developer, after a series of letters in January and February led to nowhere. Lawyers of the company vowed to sue the city for breaching the leasing agreement between Cordish and the Norfolk Redevelopment and Housing Authority, the owner of the Waterside property.

Exclusivity is As Good As Subsidy

Cordish is claiming that the exclusive deal with the Pamunkey tribe to build a casino at the waterfront and not helping the developer have one of its own is a violation of the leasing agreement between the developing company and the housing authority, as it states the city will not give subsidies to any major restaurant or entertainment projects until 2023 which could be in direct competition to Waterside.

It is clear that Norfolk is not giving any direct subsidies to the Indian tribe, yet Cordish lawyers argued that allowing the tribe to exclusively have a casino is comparable to a subsidy due to the attractiveness of being the only gaming provider in the city, which would tilt competition in the tribe’s favor and will result in “an extremely valuable economic benefit”.

The developer also stated in the letters that the housing authority and the city had a responsibility to facilitate a Cordish casino, provided that laws in the state change in the direction of allowing this type of gambling venues. In their last letter in February, Cordish lawyers threatened to file a lawsuit within 90 days if the city did not make amendments and correct the breach, yet they did not file any as of Friday.

Cordish and some businesses related to it even spent tens of thousands of dollars in the lead to the Referendum, secretly backing a group opposing the development of a casino specifically meant for a site next to Harbor Park, according to the wording of the question, only to see their efforts being squashed by Norfolk residents. Out of around 67,500 votes, 64.4% of voters approved the casino.