Norfolk Casino Lawsuit Brought by Waterside Developer Cordish Dismissed

Posted on: March 2, 2024, 10:22h. 

Last updated on: March 4, 2024, 12:28h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

A lawsuit challenging the issuance of the Norfolk casino license has been dismissed in the Virginia Court of Appeals.

Waterside Norfolk casino Cordish
The Waterside District in Norfolk. The Cordish Companies, which opened the redeveloped marketplace in 2017, has been dealt another legal setback in its quest to challenge the city’s casino. (Image: Waterside District)

Baltimore-based Cordish Companies in July 2021 sued the City of Norfolk, the Norfolk Redevelopment and Housing Authority (NRHA), and City Attorney Bernard Pishko. The suit was based on allegations that it breached its 2013 contract to redevelop the Waterside District.

Cordish attorneys argued the agreement to revitalize the dining and entertainment complex along the Elizabeth River included lease terms that provided the company with first dibs to a casino, should Virginia allow gambling to come to the Hampton Roads city. A three-judge panel in the Virginia appellate court this week upheld a Richmond judge’s decision to dismiss Cordish’s lawsuit. Cordish operates in the city as Norfolk District Associates (NDA).

“All of NDA’s assignments of error, and the underlying claims, turn on the premise that the City and NRHA breached enforceable contractual obligations owed to NDA under the lease agreement. Because we find that section was an unenforceable agreement to agree and a casino was not a permitted use under the terms of the agreement, we find that the circuit court did not err in sustaining the demurrers,” Judge Richard AtLee wrote.

The judges concluded that a casino did not qualify as a “permitted use” at Waterside, and the city therefore did not breach the lease by approving a casino elsewhere. Norfolk is working with the Pamunkey Indian Tribe on a $500 million project called HeadWaters Resort & Casino.

The express terms of the agreement specifically exclude a casino from the definition of ‘Permitted Use.’ To further emphasize that a casino does not fall within the ‘Permitted Use,’ section 10.2.1 states that use of the premises as a casino ‘is a use that is not reflected within the financial terms of this Lease Agreement,'” AtLee continued.

Cordish did not immediately respond for comment on whether it plans to appeal the case to the Virginia Supreme Court.

Lease Didn’t Include Casino Gaming

Cordish operates Live! hospitality and entertainment districts in cities across the U.S. The firm also lends the Live! brand to its casino businesses in Maryland and Pennsylvania.

Cordish execs say they would have never agreed to invest $40 million into Norfolk’s Waterside if they had known that a commercial casino resort would be allowed less than a mile east of the marketplace.

Cordish contended in its lawsuit that the company thought it was securing the rights to any forthcoming casino development in the city with its lease contract for Waterside. Cordish attorneys cited the lease language that specified that the city not “subsidize or provide a performance-based grant for a restaurant and entertainment development of over 75,000 square feet similar to the project” for a minimum of 10 years.

Waterside Lifeline

It was more than a decade ago that Cordish came to Norfolk’s rescue to help jump-start the Waterside District, a failing hospitality marketplace that originally opened in the early 1980s.

The eating and shopping destination fell on difficult times around the turn of the century, with changing consumer behaviors and competition from other entertainment districts blamed. The city subsequently took control of the property and later brought in Cordish to renovate and update the facility.

The new Waterside District opened in 2017 after Cordish invested $40 million into its reimagination. The Waterside has since become a prime downtown date night and nightlife terminus.

Waterside today has numerous restaurants and bars, live music spaces, wedding capabilities, and outdoor dining and events during the warmer months.