City of Gary looks for long shot in hopes of moving Majestic Star Casino

Lawmakers are told casino move is key to developing Gary lakefront intermodal facility

INDIANAPOLIS — State lawmakers learned Monday that Gary’s hopes of becoming a transportation and logistics hub hinge on the Majestic Star casinos being permitted to relocate from the lakefront to a new site, preferably adjacent to a Borman Expressway exit.

That’s the only way the city can put together enough land at Buffington Harbor to fulfill its vision of turning the area into an intermodal facility for shipping via water, rail, highway and air, advocates told the General Assembly’s Interim Study Committee on Commerce and Economic Development.

John Vickerman, president of a Virginia-based intermodal planning and design firm, confirmed for Hoosier lawmakers there is a genuine opportunity to turn around the city’s fortunes by grabbing a piece of the container shipping currently processed in Chicago.

Vickerman suggested that Gary could develop, over the next two decades, a Lake Michigan port at Buffington Harbor and an adjacent freight rail terminal that, in conjunction with the city’s interstate highway access and nearby airport, might entice shippers to bypass the crowded Chicago rail yards.

“We believe that it could intercept cargo, transfer cargo, at faster rates and at lower cost,” Vickerman said.

However, he said, the city first must get a commitment from at least one of the three Class I railroads whose tracks pass through the site — Canadian National, CSX or Norfolk Southern — to place a terminal in Gary, with plans to construct nearby warehouses and support facilities, before moving forward.

“We shouldn’t build this and hope they come,” Vickerman said. “We should build this because we can demonstrate a market need.”

The freight rail market in recent years hasn’t seen a need to locate in Northwest Indiana when constructing intermodal terminals.

State Sen. Mike Bohacek, R-Michiana Shores, noted, for instance, that LaPorte County has spent more than a decade and millions of dollars unsuccessfully working to establish an intermodal facility at the 1,000-acre Kingsbury Industrial Park, which is roughly twice the size of the envisioned Buffington Harbor plot and with no need for environmental remediation.

CSX also last year announced that it will develop a state-of-the-art intermodal terminal across the Illinois border in Crete to serve for its trains the Chicago bypass that Gary hopes to become.

Nevertheless, Vickerman said the projected double-digit growth in inbound, outbound and through-rail freight at Chicago in the years ahead still potentially could make Gary “a national logistics hub.”

Casino conundrum

None of that can happen, however, until Gary’s lakefront casinos are out of the way, and Bill Allsup, director of Union Gaming Analytics, told the committee the best place for the casinos to go is next to an expressway with 300,000 potential daily customers.

Allsup said relocating the Majestic Star along Interstate 80-94 will produce a 10 to 30 percent increase in gross gaming revenue, along with urgently needed hotels, restaurants and other ancillary development for Gary.

Under questioning by state Rep. Jim Pressel, R-Rolling Prairie, Allsup admitted that some of the extra revenue coming into the new Majestic Star would be coming out of the nearby casinos in Hammond, East Chicago and Michigan City.

Though Allsup and Gary Mayor Karen Freeman-Wilson insisted that a large chunk of the growth will come from Illinois and south Lake County residents who don’t want to drive all the way to the lakefront to gamble, but may visit a casino that’s just off the highway.

“It is not our objective to cannibalize those other casinos,” Freeman-Wilson said.

Passing any casino legislation through the General Assembly always is a challenge as competing interests frequently clash over proposals to the point where nothing can win majority support in the Republican-controlled House and Senate.

But state Rep. Bob Morris, R-Fort Wayne, the study committee chairman, said he believes the Gary proposal might have a better shot, since the casino move isn’t just to make more money.

Rather, he said, it’s the first stage in a potentially massive economic redevelopment project for a city that desperately needs one.

“Gary was once the driving force in the state of Indiana. It supplied a lot of the economic vibrancy of the state and fed our state for many years financially,” Morris said. “I look forward to the day that we can return and get back to that.”

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