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On Edge Over Gambling PDF Print E-mail
Written by Erik Bojnansky, BT Senior Writer   
September 2018

Magic City Casino’s owners and the City of Miami may soon come to legal blows over a proposed jai alai fronton and poker room in Edgewater

IEdgewater_1n 1981, Isadore “Izzy” Havenick and his sister got stuck for three and a half hours in an elevator at the Flagler Dog Track in Little Havana. He was just four years old at the time. His sister was three.

Now it’s 2018. Flagler Dog Track is called Magic City Casino. Live greyhound races were discontinued here at the end of June, but Magic City Casino still has 800 slot machines and 25 poker tables that include no-limit poker games with buy-ins between $50 and $20,000. The former greyhound track has become a park that sometimes hosts food truck events. The casino’s Stage 305 concert room doubles as a jai alai court, where hired athletes, including former University of Miami football players, use cestas (curved handheld baskets) to fling balls against a wall at speeds approaching 150 miles per hour.

And Izzy Havenick? He works as vice president at Magic City Casino, majority-owned by his family since the early 1950s. Havenick’s office happens to be right by the elevator where he and his sister got stuck decades ago. “Thirty-six years later,” he says while pointing at the elevator’s silver steel doors, “I have yet to ride that elevator again.”

Havenick doesn’t have time to wait for elevators anyway. He’s busy expanding his family’s gaming empire. Besides helping run Magic City Casino, at 450 NW 37th Ave., along with his mother, sister, and three brothers, Havenick is trying to bring slot machines to another establishment the family owns, the Naples-Fort Myers Greyhound Track in Bonita Springs.

Edgewater_2And he’s planning to operate a new entertainment center, up to 100,000 square feet in size, in Miami’s Edgewater neighborhood just north of downtown, an area that’s filling up with luxury high-rise condominiums. It will include a comedy club, at least one restaurant managed by Menin Hospitality (which runs 15 hotels, restaurants, and bars in South Beach, Fort Lauderdale, and Chicago), and, last but not least, gambling.

On July 3, West Flagler Associates, a company headed by Barbara Havenick, Izzy’s mother, obtained a permit that allows the family to operate a jai alai court (or fronton) and a poker room within a seven-acre property assembled by Crescent Heights developer Russell Galbut. Havenick’s facility is slated to be built at 3195 NE 2nd Ave., according to pending demolition permits obtained by the BT from the City of Miami. Izzy Havenick says the project will be built by Galbut as part of a larger project. “We’re a tenant,” he says.

Neither Galbut nor anyone from Menin Hospitality, which is owned by Galbut’s nephews Keith Menin and Jared Galbut, responded to inquiries from the BT.

Izzy Havenick insists the entertainment center he wants to run in Edgewater won’t be a casino because it won’t include “games of chance” -- namely slot machines. Instead, he explains, it’ll be a pari-mutuel business because people will place wagers (starting at $2) on the performance of players during jai alai matches, much the same way people bet on horses at horse tracks and greyhounds at dog tracks. (Since the late 1980s, poker games have been permitted at pari-mutuels.)

Edgewater_3However, the prospect of gambling has perturbed some Edgewater residents, as well as a few prominent businessmen, such as car dealership magnate Norman Braman, Related Group founder Jorge Pérez, and Design District developer Craig Robins. The proposed jai alai fronton and poker room would be less than a mile from the Design District and Braman’s multiple car dealerships, and a mere 1600 feet from where the Related Group is building four Paraiso condo towers. Opponents of gambling doubt the Havenicks’ promise not to install slot machines and fear the operation will bring additional traffic, crime, and other social problems.

In response to those concerns, Miami City Commissioners passed a resolution July 26, indicating their intention to create a zoning ordinance that will require new gambling venues to be approved by four of five commissioners. That ordinance, which will be co-sponsored by commissioners Ken Russell and Willy Gort, is expected to be presented to city commissioners in September.

Currently, the City of Miami has no zoning codes specifying where new gambling facilities can be located. Two letters from two different zoning administrators -- one dated August 2012 and the other dated January 2018 -- stated that gambling is a form of entertainment and is allowed in places zoned for “entertainment uses.”

Besides allowing buildings up to 60 stories in height, the zoning on Galbut’s land permits entertainment uses “as of right” -- that is, without any action needed from the Miami City Commission. Izzy Havenick says it was those letters that enabled his family to obtain the jai alai permit.

Edgewater_4That will change if the city commission approves the ordinance sponsored by Russell and Gort. When that happens, the Havenicks will be required to present their plans to commissioners for approval at a public hearing. They’ll need four affirmative votes from commissioners and risk a veto from the mayor.

Izzy Havenick doesn’t think that’s fair, or legal. He says his family spent more than $1 million on legal fees over the course of six years in order to obtain that jai alai permit.

The Havenick family’s legal team, which includes prolific lobbyist Ron Book, has threatened to sue the city if it moves forward with the ordinance.

“We did everything right, and because a couple of people weren’t happy, we may lose the right to do something,” Havenick complains, referring to Braman and Pérez. He later adds, “The city got bullied by a couple of billionaires.”

But Stephen Helfman, an attorney who represented Braman and Pérez at the July 26 city commission meeting, says it’s the Havenicks who are being unfair. Helfman argues that the family will tarnish an up-and-coming neighborhood with gambling. “Edgewater has become a much more livable place,” he says. “And I think they both [Braman and Pérez] believe that this is one of the worst examples of ‘entertainment’ that could be put there.”

John Sowinski, an Orlando-based political consultant and anti-casino activist, worries that the poker room and jai alai fronton could become a gateway for something worse: a full-fledged casino with slot machines. “The growth of poker and jai alai is the camel’s nose under the tent for slot machines,” he predicts.

Edgewater_5Not true, counters Havenick. For one thing, slot machines aren’t legal at that location, he says. And even if they do become legal later on, Havenick says his family is willing to promise never to add slot machines at that location, and they’re willing to put that in writing.

“I offered to commit to that without being asked by the city,” he says, “but it fell on deaf ears.”

Sowinski has a hard time believing Havenick. After all, the Havenick family has been trying since 2012 to bring slot machines to Bonita Springs, which currently has a poker room along with live dog racing. West Flagler Associates has also given $525,000 so far to a political committee called Vote No on 3 that the Havenick family formed to defeat Amendment 3, a proposed Florida constitutional amendment on the November 6 ballot that would require statewide voter approval prior to opening any new casinos with slot machines or “bank games” like roulette and blackjack anywhere in Florida.

“The idea that they don’t want slot machines or won’t attempt to get them there is defied by their actions elsewhere,” says Sowinski, who is campaigning for the passage of Amendment 3.

Havenick says he wants to add slot machines to the track at Bonita Springs in order to compete with “tribal casinos 20 miles away” and because the endeavor was approved by a majority of Lee County residents. As for Edgewater, Havenick says his family members won’t go back on their promise not to add slots because “we live in the community.”

“I live four blocks from this project, literally,” Izzy Havenick says. “I live in Bay Point.”

Although Amendment 3 would force the Havenicks to submit to a statewide referendum before bringing slot machines to Bonita Springs, it would have no effect on a pari-mutuel operation without slot machines, Sowinski admits. In other words, if the Edgewater jai alai fronton, with its pari-mutuel betting, should ever be approved by the city, and its owners never seek slot machines, they won’t need to seek additional approval from Florida voters statewide.

Edgewater_6

Slot machines do rake in a lot of money. In the 2016-2017 fiscal year, slot machines took in $8.6 billion, according to the state’s Division of Pari-Mutuel Wagering. In comparison, poker rooms drew $157 million. (The statistics don’t include revenue collected from slots or poker rooms at Seminole and Miccosukee casinos.)

At the Magic City Casino, slot machines generated $80.7 million in gross revenue during the 2016-2017 fiscal year, according to state records, while its poker room only brought in $8.6 million.

It’s the slot machines that critics of casino gambling mainly hate. “They’re the most addictive form of gambling and accrue the least economic benefit beyond the owner,” Sowinski says, adding that, aside from maintenance and repair, slot machines require few employees.

Sowinski says that poker, classified as a game of skill, as well as betting on horse and dog races or jai alai matches is far less addictive than slots. Still, he asserts, lots of people have become addicted to betting on poker games.
Havenick insists that Magic City Casino has been good for the community. The casino employs about a thousand people, he says. And the switch from dog racing (which Havenick says was losing $3 million a year) to jai alai exclusively has allowed him to employ former college athletes as jai alai players.

Tamard Davis, a former UM football player who now works as a sports commentator and actor, is one of Magic City’s jai alai players. He says the game has provided former college athletes with new challenges and a steady income. “Our starting salary is $43,000 a year,” Davis says. That’s not including bonuses for winning matches. “You can make between $90 to $100K within a five-month period,” he adds.

Havenick also claims that Magic City Casino hires more off-duty cops from the Miami Police Department than any other business in Miami. That, Havenick says, has led to a significant drop in crime since the Flagler Dog Track got slot machines in October 2009. (Thereafter, Flagler Dog Track was renamed Magic City Casino.)

Edgewater_7

Havenick says he intends to hire off-duty cops for Edgewater, too. And that neighborhood, Havenick argues, could use more cops on the street. “Every Saturday morning, I take my kid to McDonald’s [at 35th Street and Biscayne Boulevard] for breakfast. I’ve seen a man shoot up -- something. We’ve seen many prostitutes. People pooping. People vomiting. All sorts of stuff.”

The poker room and jai alai will be an asset, Havenick contends, because it will provide entertainment in an area where the only distractions are bars and restaurants. “It’s one more amenity,” he says.

But Commissioner Ken Russell, whose district includes Edgewater, believes that amenities like gambling should be discussed by the public and approved by the city commission.

“When someone has something ‘as of right,’ neighbors have no say, no public hearing,” Russell said at the July 26 commission meeting. “A use like this should have a public hearing.”

Commissioner chairman Keon Hardemon, an attorney, worried that changing the rules now, after the Havenicks obtained their permit, makes the city, and its elected officials, vulnerable to litigation. “I don’t know if we want that fight,” said Hardemon, who left the dais just before his four colleagues on the commission voted for the resolution to create the gambling ordinance.

Lobbyist Ron Book indeed promised to sue for monetary damages and even full casino rights if the city enacted the regulatory ordinance. But Helfman says cities have the right to enact new zoning codes, and do so all the time. “This is not unusual,” he says.

Havenick thinks the proposed ordinance singles him out. “Why, ten years ago, when Genting came to town, why didn’t anyone try to do anything then?” he asks, adding that Pérez and his partners reportedly made $61 million in profits when the Malaysia-based Genting Group purchased the old Omni Mall in September 2011. Pérez and developers Jimmy Tate and Sergio Rok paid $100 million for an Omni mortgage note four months earlier. Genting bought that note for $161 million.

Edgewater_8Within Miami’s Omni area, less than a mile from the proposed Edgewater development, the Genting Group assembled 30 acres of land, including Omni Mall and the former Miami Herald property intending to build a “casino resort” with thousands of slot machines, a plan that Genting is still pursuing. Yet even if Tallahassee did grant Genting a casino resort license, it would also need to obtain an affirmative vote from four Miami commissioners if the gambling regulation ordinance passes.

Incidentally, Genting’s 30 acres fall within the boundaries of the Miami Downtown Development Authority, and the DDA doesn’t think a four-fifths vote goes far enough. In a resolution approved on July 20, the DDA’s board called for a unanimous vote by the Miami City Commission before any further gambling facilities are allowed.

Andres Althabe, president of the Biscayne Neighborhoods Association, says he just wants more information on Magic City Casino’s proposed Edgewater operation. “We don’t know how many games they’re going to have or how many people they’re expecting for those games,” he says. Plus, he adds, neither he nor his fellow BNA members have seen any plans for the facility or any studies on how it will affect Edgewater’s already severe traffic congestion.

Havenick says the Edgewater operation will attract less traffic than “a six-screen movie theater,” adding that poker players come at off hours and stay for long periods of time.

That wouldn’t be the case if slots were to be added. “If you were to put in slot machines,” Havenick says, “then you’d have your traffic problems and all that stuff.”

 

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