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Pinnacle developer says General Assembly beset by 'cronyism' with casino bills

Pinnacle developer says General Assembly beset by 'cronyism' with casino bills

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BRISTOL, Va. — Commercial developer Steve Johnson last Tuesday claimed developers of the casino proposed for the Bristol Mall and Bristol Virginia City Manager Randy Eads “stole” his idea to locate a casino in Southwest Virginia.

Johnson, who most recently developed the 250-acre Pinnacle center in Bristol, Tennessee, also labeled the Virginia General Assembly a “coin-operated government” beset by “cronyism,” saying financial contributions from Bristol casino principals are causing state lawmakers to turn a deaf ear to his efforts to establish a casino on part of the undeveloped 350-acre portion of The Pinnacle in Washington County, Virginia.

Ultimately, he said he expects Gov. Ralph Northam will resolve issues with the casino selection process.

Johnson made those assertions during a lengthy conversation with the Bristol Herald Courier. He was responding to public criticism that it is too late for his casino to be considered, since this is the second year the General Assembly is working on gaming legislation, which already includes the proposed $400 million Hard Rock Bristol Resort and Casino.

On Jan. 7, Johnson and the Eastern Band of Cherokee Indians announced plans to establish a $200 million casino and hotel on land in the Virginia portion of The Pinnacle. It would be part of a $500 million expansion that could also include a water park with a hotel, a golf entertainment venue, a concert venue, a roller coaster and additional retail and dining options.

Bristol businessmen Jim McGlothlin and Clyde Stacy formally announced their intent to establish a casino at the vacant Bristol Mall on Sept. 9, 2018. They worked with state lawmakers during the 2019 General Assembly session to pass legislation to make that a possibility and participated in a Joint Legislative Audit and Review Commission gaming study ordered by that legislation that was released in November.

Johnson said he first voiced his idea for a casino to Eads and then-Mayor Kevin Mumpower during a meeting in September 2017, when city leaders inquired whether Johnson would consider doing any commercial development in the city.

“I said, ‘If I were you, I would go to Washington County, Virginia, and talk about a revenue-share agreement on this 350 acres I own in Washington County beside The Pinnacle,” Johnson said, recalling that conversation. “I’m going to extend the boulevard out to Gate City Highway and do recreation, entertainment, an amphitheater, hotel, water park and a casino if they will allow it.”

Johnson said he further advised them then that Bass Pro Shops owner Johnny Morris planned to eventually close the Cabela’s store at The Falls, after acquiring that chain in October 2016. That prompted Eads to ask about ultimately putting a casino in the Cabela’s building. Johnson said that site was “too small” and wouldn’t accommodate all he was planning.

About a year later, on Sept. 2, 2018 — when the Herald Courier and other news outlets broke the story about possible casino legislation and the proposal for a casino at the Bristol Mall — Johnson sent Eads a text message.

“Damn, you boys stealing my idea I see,” Johnson wrote.

Eads replied, “Gotta do what we gotta do! I told you Cabela’s would be a great place for one.”

That elicited Johnson’s reply of “Yeah I do too. Good luck.”

“This goes all the way back to September 2017. I’m no Johnny-come-lately. I found it very disingenuous of him [Eads] to say what he said when we popped up with our plan,” Johnson said Tuesday, referring to an Eads comment on Jan. 7, 2020, that “imitation is the most sincere form of flattery,” following Johnson’s casino announcement.

Eads confirmed Johnson’s timeline and added to it.

“I did not steal his idea of a casino in Southwest Virginia,” Eads said in a phone interview. “I have discussed a casino in the city of Bristol with various members of council and city management in the spring of 2017. I discussed it with a legislator on July 4, 2017, right before the parade in Bristol, and I mentioned the possibility of a casino at The Falls to Mr. Johnson in September of 2017 [during the meeting with Mumpower].”

Eads also shared another text exchange from December 2017, when he again raised the possibility of a casino at Cabela’s with Johnson.

“Really? You sure about a casino? Wouldn’t require additional legislation?” Johnson wrote.

“It will require legislation but I’m going to start pushing for this behind the scenes,” Eads wrote. “Eventually the legislature will approve it for waterfronts. We need to be pushing for it here as well.”

In November 2014, Johnson told a Bristol Herald Courier reporter “off the record” he wanted to develop a casino on the Virginia portion of the property, if state lawmakers would ever permit gaming. During the most recent interview, Johnson agreed that conversation occurred, but he wasn’t sure when.

Johnson said he also previously reached out to Sen. Louise Lucas, D-Portsmouth, to discuss his casino project. He produced an email from Lucas, dated Sept. 21, 2018, when she declined to support his plan.

“After reflecting on our prior conversation, this is to inform you that I have decided to pursue my own legislation to authorize a casino for my district,” Lucas wrote. “I also intend to work, exclusively, with those seeking to do the same at the mall located in Bristol, Virginia. I do not intend to seek or support any legislation to locate a casino in Washington County, Virginia as this would disrupt our ability to meaningfully pursue this legislation this year.”

“Why did she send me this email if I didn’t already have this going? I’m no Johnny-come-lately,” Johnson reiterated. “I’m no imitator. I’m the originator.”

Johnson said he announced no plans until this January because he didn’t expect lawmakers to just approve gaming last year and he didn’t have his deal finalized.

“No. 1, I knew there was no way they would go from no gaming to full-blown issuing casino licenses in the first year,” Johnson said. “And No. 2, I had not partnered with the casino owner-operator, and I did not want to come forward under any circumstances without doing that. This year, I finalized my deal with the Eastern Band of Cherokees — who are the leaders in the clubhouse, the model, the case study of doing this right.”

The band operates the Harrah’s Cherokee Hotel and Casino Harrah’s Cherokee River Valley Casino, both in North Carolina. This year, those casinos are expected to generate about $400 million in net revenue for the tribe.

Johnson called it “really discouraging” that lawmakers, including members of the Southwest delegation, haven’t supported his project but remain committed to the Bristol project.

Area lawmakers previously voiced unanimous support for the Bristol project.

“I think the answer is very clear,” Johnson said. “When you look at Bristol casino political giving, there has been over $1.3 million given to politicians across the state of Virginia, including the local legislators. I think it reeks of cronyism. I think it sends the signal of Virginia being a coin-operated government, and this could cost Southwest Virginia a project that can transform it for decades and decades.”

To reinforce his argument, Johnson pointed to campaign finance records showing more than $1 million in contributions since 2018 by the Bristol casino leadership.

The United Co. has made $581,000 in political contributions, and Stacy has made $421,000 in contributions since 2018, according to the Virginia Public Access Project website.

Of those totals, $500,000 has gone to fund Betting on Virginia Jobs, a new political action committee established by McGlothlin.

The United Co. contributed $130,000 to Democratic candidates and committees and $126,000 to Republican candidates and committees during the 2019 election. Stacy contributed $125,000 to Democrats and $121,000 to Republicans.

McGlothlin’s wife, Frances McGlothlin, contributed $14,000 to GOP committees and candidates during 2018, according to

Betting on Virginia Jobs contributed $15,000 to Sen. Lucas and the United Co. contributed $5,000 to her successful 2019 reelection bid.

Election records show the only contribution Johnson made during 2019 was $5,000 to William Wampler III, a Republican from Abingdon who was elected 4th District delegate in November.

The Virginia General Assembly is now beginning to hear more than 20 gaming bills, including some written to permit casino gaming in five cities — Bristol, Danville, Norfolk, Portsmouth and Richmond. Lobbyists working for Johnson and the Cherokees have, thus far, been unsuccessful in getting language changed that would allow the Washington County project to be considered.

Johnson continues to lobby for a competitive process, as suggested in the JLARC study.

“The legislation that is moving would only allow five handpicked municipalities,” he said. “Four of the five municipalities have no process at all; the casino owner-operator is already picked and predetermined before there is even a law. How is that democratic? How is it free market if the winners and losers are picked before the law is even in place?”

Lobbyist Greg Habeeb, who represents Johnson’s project and the Cherokees, offered a less severe impression.

“We’re at the very beginning of a very long process,” Habeeb said via telephone. “They have made significant improvements from last year’s bill and are moving in the right direction to incorporate the JLARC recommendations. The two major holes is there is no statewide competitive process — as recommended by JLARC — and there’s no requirement the principles of the public Procurement Act be applied. There are more fixes that need to happen.”

Johnson predicts that if lawmakers don’t adopt the competitive bidding component suggested by the study, Gov. Ralph Northam will step in.

“We’ll keep telling our story. We’re not going to give up,” Johnson said. “We realize we’re fighting the establishment. We realize cronyism is in play here. There is tremendous political donation history. But we’re buoyed by this administration wanting to do it right, do it responsibly.”

Johnson cited the legislation in 2019, when Northam called for and got a comprehensive study before any law was enacted.

“We feel, at the end of the day, the governor will get it right, just like he did last year,” Johnson said. “We feel, ultimately, he’ll step in and do what’s right for all Virginians and Southwest Virginia in this matter.”

Getting it right, Johnson said, means a competitive bidding selection process.

“Let’s just have a process, per the JLARC study. They got it right,” he said. “Competition causes the best projects to come to the forefront.” | 276-645-2532 | Twitter: @DMcGeeBHC |

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