North Shore casino owner Don Barden said he will make good on his $3 million commitment to the Hill District after all.

Less than two weeks after petitioning the Pennsylvania Gaming Control Board to drop the funding, Mr. Barden reversed direction yesterday, saying he would spend the money to help spur economic development in the neighborhood.

Mr. Barden announced the decision after meeting for more than an hour with Allegheny County Chief Executive Dan Onorato and Mayor Luke Ravenstahl. The mayor had said he was opposed to the casino owner's request to drop the funding, which was part of his bid for the city's slots license.

At a news conference after the meeting, Mr. Barden said he wanted to drop the $3 million pledge because he did not get development rights to the 28-acre Mellon Arena property. Those rights were granted to the Penguins in the negotiations for a new arena.

Now, in what Mr. Barden described as a "happy medium," the money would be spent outside of that development area, within the Hill itself, but would not go to any particular organization or agency.

"This will be money the company will spend to spur economic development in terms of architects, planners, engineers and that sort of thing, feasibility studies, analysis. So the benefit will accrue to the people in the community of the Hill District," he said.

Mr. Barden said the investment would occur over five years, not the three he originally proposed, although he added there is a chance "it could be spent all at once."

The $3 million commitment was one of 57 conditions the gaming board imposed on Mr. Barden in awarding him the Pittsburgh slots license. It was to be invested at $1 million annually for three years "for the redevelopment of the Hill section" of the city.

During a hearing last week, gaming board Chairwoman Mary DiGiacomo Colins expressed concern about his request to drop the funding and other changes he wanted to make to the casino, saying they were key components of his license application.

Mr. Ravenstahl said Mr. Barden's request to use the money outside the Mellon Arena site was "very reasonable."

"Certainly he was interested in development rights he was not given. As a result of that, I think it's more than fair for us to be willing to be flexible [to allow Mr. Barden] to invest that $3 million in the way he sees fit for the greater benefit of the Hill District community," the mayor said.

Mr. Barden plans to stick with two other proposed changes that concerned Ms. Colins -- delays in construction of a $4.5 million ballroom and a $3.5 million outdoor amphitheater for two and three years after the opening, respectively. Both could end up happening sooner "but we need that kind of flexibility," he said.

"Our casino will look the same, feel the same," he said. "The mayor and the county executive concur that it will be inconsequential if we put the amphitheater and the ballroom into operation in the second and third year into the casino."

Mr. Ravenstahl and Mr. Onorato said they had no problem with the timeline. Mr. Onorato said the casino, even with delays it has faced, is still well ahead of those in Philadelphia, which are mired in political and court battles. The Pittsburgh casino is on target to open in May 2009.

The two political leaders said they would send a joint letter to the gaming board in support of the changes Mr. Barden wants to make.

"He's continued to be a good partner in this effort and I think it's important for us to reciprocate with a letter to the gaming board," Mr. Ravenstahl said.

State Sen. Jim Ferlo said he wants the gaming board to hold Mr. Barden to his original commitment to have the amphitheater and ballroom completed in the first phase of the project.

While he was pleased to see the $3 million commitment to the Hill restored, Mr. Ferlo, in a letter, urged the board to reject Mr. Barden's other revisions.

"Every element of the originally proposed casino, including the amphitheater and ballroom, had a revenue- and job-creation value that added to the facility," he said.

"Each element [that is] removed represents dollars lost for property tax reductions, local share assessment taxes and redevelopment assistance funds."

At yesterday's news conference, Mr. Barden also addressed the financial struggles his casinos in Indiana, Colorado and Mississippi were facing, saying they would have no impact on the Pittsburgh project. Majestic Star Casino posted losses of $26.1 million last year and had debts of $556.7 million, impairing its ability to borrow money.

"PITG [Gaming, his Pittsburgh company] is a totally separate entity, separately financed. It stands on its own. It has nothing to do with anything else that I do whatsoever, including all my other investments," he said.

He also played down a Standard & Poor's report last week that assigned a low credit rating to the Pittsburgh casino project because of the lack of cash equity in the financing of the slots parlor.

With high debt and no cash equity from either Mr. Barden or other investors, the casino must get off to a strong start to meet its debt service obligations, according to an S&P analyst, who described the project as "highly vulnerable."

Mr. Barden assigned the concerns to "technical items" and said "in a start-up project those are kind of customary kinds of comments."

He said Moody's Investors Service, another rating agency, had a more favorable view, assigning a stable rating yesterday. "Moody's had a totally different view. They thought we were adequately reserved and our ratings are better, etc., etc.," he said.

The report Mr. Barden cited wasn't available publicly.

Mr. Barden is seeking $650 million in financing from international lender Credit Suisse and $150 million from another source. The gaming board also has to approve the proposal, which substitutes bank loans for bond financing.

The board has said it won't act on the matter before May 14.

That puts Mr. Barden in a tight time frame, because of a current $200 million bridge loan he must repay by May 19. He has used that loan to begin building the casino.