Attorney for casinos attacks Phila. lawyers

SugarHouse Casino yesterday berated the city's Law Department for flip-flopping legal positions based on which mayor was in office.

Arguing before the Pennsylvania Supreme Court, SugarHouse attorney Stephen Cozen chided city lawyers for agreeing to issue a permit for his client to build on the Delaware River when casino proponent Mayor John F. Street was in office, only to decide they were wrong once Mayor Nutter - a casino critic - was sworn in.

"Those shifting positions could be either a new low in political maneuvering, or a new high in legal hypocrisy," Cozen told the court's six justices.

At issue is whether the city, under Street, exceeded its authority in November by granting SugarHouse a license to build on 12 acres of state-owned land under the Delaware River. Nutter joined a group of state legislators from Philadelphia who sued the city to invalidate the license; SugarHouse says the city had acted properly.

The case has broad implications for waterfront development in Philadelphia. It could also determine whether SugarHouse ever builds its $650 million, 3,000-slot-machine facility at the border of Fishtown and Northern Liberties, because the riparian-rights issue is perhaps the greatest lever available to Nutter and those state lawmakers who want to move the casino farther away from residential neighborhoods.

The Supreme Court has found that City Council improperly delayed the project, and ordered the city to issue SugarHouse its building permits. But SugarHouse owns only 10 acres of its 22-acre site. The rest is state-owned riverbed.

A second casino, Foxwoods, is planned along the Delaware in Pennsport, but Foxwoods says it does not need to build on state land.

The state owns all submerged land under rivers within its borders. The legislature has been the only body to issue riparian rights since passage of the 1978 Dam Safety and Encroachments Act.

Last summer, SugarHouse dug up a 100-year-old law that said the city could act as the state's agent in granting such rights. SugarHouse found the Street administration willing to go along with what appeared to a "strained" reading of that law, chief deputy solicitor Richard Feder said.

"There's no question that the city was willing to accept SugarHouse's reading of the law in order to facilitate gaming," Feder said in an interview. In November, SugarHouse was awarded the license for permission to build over the Delaware for a fee of $282,000.

Nutter revoked that license 17 days after his inauguration, and now city lawyers acknowledge that their new position - that the city never had the authority to grant those rights - represents an "evolution."

The legislature encouraged that evolution in February by granting riparian rights to two condo projects on the river, asserting in those laws the state's sole power to give them out.

"It sparked a whole new reexamination of our position," senior city attorney Mark Zecca argued yesterday. The new conclusion: that state authority trumps the city's. It's the opposite of the positions the city has taken on casino and gun-control issues.

"We don't lightly cast aside city authority," Zecca said.

Supreme Court Chief Justice Ronald D. Castille, a former Philadelphia district attorney, appeared to support SugarHouse's argument that Nutter could not revoke SugarHouse's permit while it was the subject of a Supreme Court case.

Catherine Recker, an attorney for the state House of Representatives, said the city had the right to revoke its license at any time in the interest of "the public good."

But when it comes to Philadelphia politics, casinos, and changing administrations, "the use of the term

public good

is somewhat ambiguous," Justice Seamus P. McCaffery said.

The case may turn on whether the 1978 Dam Safety and Encroachments Act wiped out the 1907 law giving the city authority to grant riparian rights as a way to better regulate construction on the bustling turn-of-the-century waterfront.

The group of state legislators opposing SugarHouse include Democratic Sens. Vincent J. Fumo and Michael Stack, Democratic Reps. Robert Donatucci, William Keller, Michael McGeehan and Michael O'Brien, and Republican Rep. John Taylor.

"They are unified in opposing special favors for casinos," said Christopher Craig, Fumo's chief counsel.

"We find it offensive that the General Assembly's traditional prerogative . . . has been assaulted by a company that wants to cut corners," Craig said.