LAUREN WOOD / THE NATCHEZ DEMOCRAT — Premier Gaming Group President Kevin Preston, center, starts a tour of the Magnolia Bluffs Casino in what will be the gaming floor with city officials and casino employees Wednesday afternoon.

Lingering concerns: Brown questions casino’s non-gaming contributions

Published 12:05am Friday, October 26, 2012

NATCHEZ — With the scheduled opening of Magnolia Bluffs Casino just two months away, Mayor Butch Brown said there are a couple of aspects of the casino development with which he is concerned.

First, Brown said he is skeptical that Magnolia Bluffs Casino has fulfilled its non-gaming contributions to the City of Natchez.

The Mississippi Gaming Commission requires that all casino developments spend an amount of money equal to what they spend on the gaming facility on “infrastructure facilities.” Plans for these facilities — which must amount to 100 percent of the construction cost of the casino — must be provided to receive gaming commission approval.

The gaming commission approved those plans in October 2011 when the casino received approval to proceed with development.

In addition to restaurants, bars and outdoor entertainment space, the casino is counting other non-gaming casino space toward the requirement.

But Brown said he does not understand how on-site restaurants and entertainment space that will likely be used by casino patrons more than the public meets the gaming commission requirements.

“I don’t think they have met their requirements for land-based (non-gaming) space,” he said. “I don’t see any

LAUREN WOOD / THE NATCHEZ DEMOCRAT — Mayor Butch Brown, left, talks to Premier Gaming Group President Kevin Preston during a tour of the Magnolia Bluffs Casino.

land-based infrastructure.”

MGC Executive Director Allen Godfrey confirmed that the gaming commission approved the on-site restaurants, bars and entertainment space as the casino’s non-gaming infrastructure.

“Nothing has changed from the day this project was approved to today,” Godfrey said. “From our standpoint, they’ve met our regulations. Now if the mayor chooses not to give them a certificate of occupancy, then there’s nothing we can do about it.”

Premier Gaming Group President Kevin Preston, whose company is building the casino, said Magnolia Bluffs Casino is not reinventing the wheel by meeting gaming commission requirements with on-site facilities. Preston and the casino’s attorney Chris Pace said the Margaritaville and Silver Slipper casinos in Biloxi met requirements with similar facilities.

Casino developers are also providing a $300,000 contribution for a public park and a $300,000 contribution for the Natchez Trails Project as part of the provisions of developers’ lease with the city. The plans are now on hold since the grant for the park was recently denied by the Mississippi Department of Transportation.

The casino will also provide as part of its lease agreement an annual payment of $225,000 to a community development fund beginning one year after the casino opens. Additionally, the lease states the casino is to provide A $1 million contribution for a YMCA, recreation center or Civil Rights museum to be paid over a three-year period beginning one year after the casino opens. Developers will also pay 5-percent interest on the last two payments that total $666,666, bringing the total contribution to $1,050,000.

Those contributions are, however, part of the city’s lease and do not count as the casino’s non-gaming infrastructure required by the gaming commission.

Preston said percentage-wise, the lease is “much more favorable” to the city.

“And we went above and beyond with providing laptops for (Natchez police) patrol cars,” he said.

Brown confirmed the casino provided the laptops and mounting hardware for the police cars.

“But not the servers and things that make the computers work,” he said.

Preston said he is frustrated that Brown is bringing up issues that Preston said he believes have already been resolved.

“In one breath (Brown is) bringing up these issues that we went through on multiple occasions, and in the same breath he calls (our) office and asks us if we would interview friends of his for jobs,” Preston said in an e-mail.

Brown said the instance to which Preston is referring relates to Brown being contacted by someone who recently moved to Natchez and was looking for a job.

Brown said that the casino’s job fair had passed, so he asked if it would be possible for the person to get an interview.

“Since that time I have been told that the guy never went and the interview never happened,” he said.

Brown also said he was concerned with the length of the 99-year lease the city signed with casino developers.

But Preston said that is not an issue because the lease is actually a 49-year lease with an option to go to 99 years.

Brown said he has asked the gaming commission to share with the city the list of expenditures the casino has and will make on non-gaming infrastructure when it receives the list from developers.

Brown also hopes to get some answers from the gaming commission about secondary emergency vehicle access to the casino site, an issue that has yet to be resolved.

The lone fire access was approved by former fire chief Paul K. Johnson in 2007 during the initial stages of the casino project.

Brown said that approval was given before any major work was done at the casino site.

“I think it was more hypothetical than actual,” he said. “There was never any site plan when the fire access approval was given, all that came after the fact.”

Even if there were no private land ownership challenges with providing secondary access, Brown said a fire truck would still have to leave the pavement to access the casino.

“A loaded fire truck leaving hard pavement and dealing with mud and going a route where it can’t access the casino quickly, that would be a challenge,” he said.

Roth Hill Road, Brown said, does not provide adequate emergency access because emergency vehicles would be impeded by people trying to escape the site.

“There is no alternative for secondary access, in my opinion,” he said. “We, the city and the fire department, are wrestling with how to provide fire protection going down Roth Hill Road.”

Preston said his company is building the casino and constructing access as it was designed and then approved by the city.

“Right now we’re building this thing as it’s been designed with more than enough adequate fire protection,” he said.

Brown said he only wants to ensure the safety of casino patrons and firefighters and see that the city receives every penny its due in non-gaming infrastructure required by the gaming commission.

“I don’t have a shopping list of things I want from the casino,” Brown said. “I only want to make sure we get what is required by state law that must be met on land-based infrastructure.”

Brown hopes to get some sort of clarification on what exactly the casino’s non-gaming contributions to the city will be next month when the city hosts the gaming commission’s monthly meeting.

“We will most certainly be on the agenda,” he said.

 

 

 

  • Anonymous

    I am against the casino, and have been from the beginning. It just seems to me, also, that the handling of the whole thing was done poorly from the get-go. I cannot help but feel that this (small) area cannot support two casinos, and one will eventually close. Finally, in this case, I support Brown in his efforts to see that this new casino is meeting its’ financial responsibilities with the city.

    But,…I still believe the entire thing is a convoluted mess!

  • Anonymous

    The Isle of Capri $5000 worth of campaign contributions to Butch Brown appear to loom large. If Butch has a problem with the requirements of the Mississippi Gaming Commission then blame them, not the Casino. This article makes Butch look like he’s Jesse James. Hands Up Everybody!

  • Anonymous

    Even with the onsite amenities counted in the equation used by MGC along with the $1MM other payments, I would not think that adds up to 100% of the cost match required by the law. However, this can be overcome by hiring a few of Butch’s cronies. Why, all of a sudden, do these issues arise even though the approvals came in previous administration but were not issues in the election campaign and Butch has now been in office for almost 5 months (in all fairness here, we have seen previous concerns over the fire access issue). Maybe if he lived in the city, he would get the newspaper earlier and be more aware of the issues. It looks like the future of a harmonious relationship is questionable if they are shooting barbs before the casino even opens……

  • Anonymous

    Its not up to us to decide whether or not the city can support two casinos. Thats up to the free market, this is america afterall. Government can’t dictate who can and can’t open a business. I’m all for competition, it makes things better. If the isle of capri is worried, I suggest they update and improve. This new casino is giving more to our city up front than the isle has given us altogether. And yes, brown took tons of cash from the isle during the campaign which should have raised eyebrows but the natchez democrat continues to ignore it. this is nothing more than a political shakedown. Why has brown not gone to the isle of capri and demanded more contributions to the city. Oh yeah, he owes them now, not the other way around, hence the shakedown.

  • Anonymous

    Eaglenatchez, I am usually in agreement with you, but I will say this- if you have KNOWLEDGE of these claims and can prove your case, I would like to see it. General charges like what you mentioned are very interesting and cause for concern, but unless there are “smoking guns”, they are baseless claims. Now mind you, I wouldn’t doubt any of it, but I can’t accept it as the truth without a basis in facts.

  • Anonymous

    What’s the problem. The Casino is doing it the hard way. All they need to do is meet with Butch and agree on a price that will keep his mouth shut. It is soooooooo simple. Hire a couple of Butch’s cronies at inflated salaries ( so Butch can get some of it) and provide Butch will a little “retirement augmentation” and every thing will be fine. That’s MY opinion.

  • Anonymous

    What part do you want to know is true? The Isle contributing to Brown’s campaign was published in the Natchez Democrat when they published all funding sources for candidates. Just add up the amounts of money that this casino is giving to our city in this article. It’s a lot of dough. When was the last time you’ve heard the Isle contributing anything to the city….or the police department??? Everyone involved in this deal knew up front that this deal we got from this casino was light years better than any deal we received from the Isle of Capri when they opened. The isle opening was far more screwed up than this one and they’ve been pumping dough out of Natchez for two decades. Where’s our return from them???????

  • Anonymous

    Get’em Butch. The agreement DID state that whatever they spent on the casino…equal amount had to be spent on things to compliment the city. The PARK was the biggest thing; they aren’t building a hotel, so they really need to step up and put the money into Natchez.

  • magnoliareality

    Eaglenatchez, your views are based on the false assumption that magnolia bluff is being built without government subsidies and without the government picking winners and losers. I agree that the market and competition should be allowed to work. However, in this case, one casino was built without government subsidies (Isle of Capri) while the other receives considerable government support in the form of rent subsidies as well as uncompensated assumption of risk by the local government. More specifically, the Isle/Lady Luck was developed with private money, private parties assumed all the risk, using private land, without any government support. It pays market rent and has not received any supplemental public funding, at least nothing like the magnolia bluffs is receiving. On the other hand, an untold amount of government resources (money, time, energy) went into developing the property where the casino will be located and (more troubling) to make sure this deal is completed. The project is on government land. MB will not be paying market rent for its location and, even worse, the ammount of rent paid is related to the revenue it generates. This last point is especially troubling since not only does the city now assume the risk that it might not get any rent in return for this transaction, it creates a situation in which the city has pecuniary interest in the new casino’s success, much like the auto and bank bailouts did in 2008

    If this was truly going to be a free market transaction, then the City should have held a public auction for the new riverfront property hat was developed untold amount of public money, much of which came from the tax revenue generated by the Isle of Capri.

    In short, this new project has really socialized all the risk against to the public. Your comment suggests that you don’t understand free market economics, this deal, or both. As someone who supports free market economics, I request that you be more cautious before you invoke free market economics to support a transaction that so obviously littered with public subsidies. This is the kind of superficial understanding of free markets that causes people to misunderstand.