AT HEARING, FUMO TO ARGUE THAT STATE CONTROLS RIVER RIGHTS

     PHILADELPHIA, November 15, 2007 – The state has sole legal authority to permit the construction of a gambling facility on submerged lands within the Delaware River, state Senator Vince Fumo (D-Philadelphia) will tell the city Commerce Department during a hearing today at the Pennsylvania Convention Center.

     Any attempt to bypass the state Legislature and grant riparian rights to a casino developer would be contrary to law and would probably subject the city to unnecessary litigation, Fumo wrote in a letter sent to City Solicitor Romulo Diaz. Of the two 1907 statues that underlie the case for city authority over riparian rights, one has been repealed and the other does not apply to anything other than harbor structures, which clearly would not include a casino.

     “The attempt to use a 100-year-old statute to circumvent legislative authority over the conveyance of submerged lands distorts the 1907 law far beyond any recognition. It is irresponsible for the city to pursue this course of action,” Fumo wrote. “Sugarhouse selected a site it did not control. Now it has to live with the consequences of that decision.”

     If the city were to grant riparian rights, it could prove to be a significant financial windfall for the casinos, Fumo pointed out. Under the city code, casinos could pay far less than the amount that the State Department of General Services would charge for a 99-year lease, or a price that the state Legislature might establish. It would also deny the Legislature the opportunity to set terms and conditions upon the use of the waterfront property. Further, it would also set a precedent for other waterfront development, whereby the state would forfeit its long-standing control of riparian rights.

     “Relatively small sums of money for the conveyance of riparian rights would go to the city, rather than state taxpayers being properly compensated for land that state taxpayers own,” Fumo said.

     In the memorandum submitted to Diaz, Fumo notes that it is a well established matter of state law that such commonwealth-owned property cannot be sold or exchanged, nor shall any easements, rights of way or other interest be granted, without the specific authority of the state General Assembly.

     The traditional means of riparian rights conveyance is for the General Assembly to pass legislation, authorizing the state Department of General Services to negotiate a lease. The General Assembly has, on several occasions, refused to do so in the case of the proposed Sugarhouse and Foxwoods casinos in Philadelphia.

     Sugarhouse won a license for one of the two slot machine facilities authorized for Philadelphia under the 2004 state gaming act. Sugarhouse, however, chose to apply for the license at a Fishtown neighborhood location, despite currently controlling only 11 of the 22 acres on which it proposes to build its casino. The other 11 are part of the Delaware River bed and are owned by the state.

     Sugarhouse has publicly suggested that a 1907 law gives the city Commerce Department, through its antecedent, the Department of Wharves, Docks and Ferries, the right to grant permission for construction into the riverbed without state authorization.

     A 1978 state law, however, effectively repealed that right, for the purpose of providing a uniform system for regulation of state waterways. Though a supplemental 1907 act appears to give similar authority to the city as the repealed statute, it clearly applies only to wharves, piers, ferries, docks or other harbor structures – a category that does not include casinos -- and it does not permit construction “into the river,” as stated in the repealed 1907 act.

     “Since the passage of the 1978 law, the city has never approved a non-wharf-related structure into the riverbed,” Fumo said. “To change that policy now would end the long-standing practice of the General Assembly enacting legislation to convey the rights to riparian land, and it would almost surely be decided in court.”

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Click here to see a copy of the letter to Solicitor Diaz

Click here to see a copy of the legal analysis