HARRISBURG, PA-The Pennsylvania Gaming Control Board has signed off on a recapitalization and change of ownership interests for a partially constructed casino project in Pittsburgh. The board’s 7-to-0 decision to transfer the class 2 slots license to the newly formed Holdings Acquisition Co. followed a four-hour hearing here in which Neil Bluhm, principal of Chicago-based Walton Street Capital LLC, argued that the restructuring could put the financially troubled, $780-million project back on track and allow construction to resume.

A spokesman for Bluhm’s group tells GlobeSt.com that construction on the casino, which began last December, halted July 1 after developer PITG Gaming LLC defaulted on a $200-million bridge loan. The default capped a series of financial setbacks on the project that began with rising construction costs and difficulty in obtaining refinancing, according to a news release from PGCB.

PITG, led by Don Barden, signed an agreement two weeks later giving 75% control of the project to the newly formed Pittsburgh Gaming Investors, a group led by Walton Street, Bluhm and entities controlled by Greg Carlin, CEO of Philadelphia-based SugarHouse Gaming, and Ira Lubert, co-founder of Independence Capital Partners. Barden’s investor group retains 20% ownership, while a pair of Detroit pension funds owns 5%. Carlin will now serve as CEO of Pittsburgh Gaming Holdings, and will serve on the management committee of Holdings Acquisition Co. with Bluhm and Barden, CEO of Detroit-based Majestic Star Casino LLC.

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