Casino wants to amend lease
Published 12:18am Wednesday, January 18, 2012NATCHEZ — The Roth Hill Road casino developers are proposing an amendment to their current lease with the city that further defines — and some scenarios reduces — the casino’s commitment to non-casino projects in town, seemingly increases the tract of land where the casino will be located and names one of the casino’s investors a third-party beneficiary.
Click here for copy of proposed lease amendment
The amendment would make Levine Leichtman Capital Partners Inc. a leasehold mortgagee and a third-party beneficiary in the lease. The amendment states that the provisions outlining payments for the additional considerations in the lease would benefit and may be enforced by the investment company.
Natchez City Attorney Everett Sanders said Tuesday that the amendment would not allow the City or Natchez Gaming Enterprises to terminate the lease without notifying and receiving approval from LLCP.
The amendment would also allow LLCP to purchase a portion of and have equity ownership of Natchez Gaming Enterprises, the Premier Gaming Group responsible for the casino.
Other revisions in the amendment include:
- Text that says Natchez Enterprises will spend up to $300,000 for the development and improvement of an area to be used as a “public park, garden area and/or an over-flow parking area.”
The original lease signed in 2007 by the city said the casino group would develop a public park and botanical gardens at the casino site. No money amount was specified, and no mention of a parking area was included.
-Further definition of a previously agreed upon $1 million contribution from the casino group to the city for a community recreation center or Civil Rights museum.
The new lease says the donation will be paid over a five-year period, with no more than $200,000 paid in a single year and the first payment made within 90 days of the casino’s opening day.
The 2007 lease said the casino would donate $1 million for a Civil Rights museum, community recreation center or YMCA. It did not mention splitting the contribution out over five years.
- Language in the proposed amendment to the lease allows the casino to avoid contributions to the Natchez Trails Project if the project is already fully funded.
Both leases say the casino will give any money necessary up to $300,000 to the Trails Project.
- An annual contribution of a percentage of its gaming revenue to a community development fund as long as the fund qualified as a 501(c)(3) non-profit is further defined.
A payment chart shows the contribution as $25,000 for under $28.5 million in gaming revenue and ranges to $225,000 for $30 million and above in gaming revenue.
The 2007 Roth Hill lease said the casino would contribute $225,000 annually with no ties to the level of gaming revenue.
By comparison, the Isle of Capri’s Natchez casino generated $36 million in gaming revenues in 2009, according to the Isle of Capri Corporation’s annual report from that year.
- In the new lease amendment, the city would also agree to provide and fund an additional 100 parking spaces within a half-mile of the casino.
- The new lease amendment appears to have changed the legal description of the size of the tract of land being leased. The new version describes 10.73 acres of land while the 2007 lease references only a 5.3 acre tract.
Sanders said at the Natchez Board of Aldermen meeting Tuesday night that he had given the aldermen a copy of the amendment for review.
The board voted to recess their meeting and continue it at 4 p.m. Thursday to discuss the amendment in executive session.
Ward 6 Alderman Dan Dillard asked Sanders if the proposed lease amendment had been sent to the Mississippi Gaming Commission. Dillard said he wanted to ensure that the developers had not preempted the board’s authority and included the lease as part of the package outlining how the casino would be funded that was submitted and approved by the gaming commission.
Sanders said he did not know if the lease amendment had been sent to the gaming commission, but he said one argument that the casino developers could make is that the funding is connected to the lease.
“That is an erroneous statement, and it is inappropriate for anyone to say that,” Dillard said.
Dillard said he questioned the timing of the lease amendment and asked if Natchez Gaming Enterprises was on the agenda for the gaming commission’s meeting on Thursday. Dillard said before the meeting that, according to the casino’s approval outlined in the gaming commission’s October meeting minutes, Natchez Gaming Enterprises must apply for a gaming operator’s license on or before Jan. 25.
According the agenda for the commission’s Thursday meeting posted on the gaming commission’s Web site, Natchez Gaming Enterprises is not on the agenda.
