City signs letter of intent with casino developer
Published 12:00 am Thursday, September 4, 2003
NATCHEZ &045;&045; Developer Charles Cato has 60 days to enter into an option with the city for land on which to build a casino/hotel complex, under an agreement he and Mayor F.L. &uot;Hank&uot; Smith signed Thursday.
The letter of intent was needed in order for Cato, president of Emerald Star Casino and Resort, to begin to approach financing sources, start the gaming application process and hire an architect.
&uot;Until he had a commitment from the city, understandably, he didn’t want to start the process,&uot; Smith said.
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Cato, who also owns an interest in Greenville’s Lighthouse Point casino, has said he hopes to place a $20 million complex near the Natchez riverfront, including a casino at the foot of Roth Hill.
That development would also include a hotel across Canal Street from the convention center and a welcome center for the complex at the old railroad depot site.
The old Natchez Pecan Factory site would be used at first for staging of construction for the Emerald Star development and, after that, parking or other support services for the casino.
Cato’s proposed development &uot;would be in the neighborhood of 400 jobs &045;&045; that’s the most immediate effect,&uot; Smith said. &uot;And having that hotel built is going to complement our convention center.
&uot;The lack of a hotel has been a deterrent in realizing the full effect on the convention center. And to have vacant property developed and utilized, as well as the riverfront … that’s a no-brainer.&uot;
If Emerald Star enters into leases for the properties in question, it would also be required to sign an agreement to &uot;make suitable provision for the availability of hotel rooms&uot; for conventions booked at the convention center.
Also according to the letter of intent, &uot;it is understood … the City of Natchez desires that the capacity of the hotel be approximately 160 rooms.&uot;
Also, under the letter of intent:
4Emerald Star would pay $50,000 for an initial, exclusive 12-month option on the Roth Hill riverfront site &uot;for the purpose of developing a casino gaming establishment thereon.&uot;
4The city would extend the option by six months if, at the end of the 12 months, it was determined that the company was making &uot;substantial progress&uot; toward securing licenses and permits for a gaming development at the site.
4After the initial option, the casino would enter into a lease for the site for five years, followed by seven options to renew every five years, for a total of 40 years.
4Once a gaming business is open at the site, Emerald Star would pay the city annual base rent of $240,000 plus 2 percent of gross revenue between $12 million and $35 million and 3 percent on gross revenue above $35 million.
4The company would also pay $50,000 for a one-year option on the Roth Hill site; $10,000 on the Natchez Pecan site; $30,000 on the hotel site; and $10,000 on the old depot site.
As in the case of the Roth Hill site, if Emerald Star showed substantial progress toward getting the license necessary to operate a casino, those options could be extended for another six months.
4The pecan factory site would be initially leased to Emerald Star for three years, after which the city would consider renewing it &uot;for a term or terms running concurrently with the Roth Hill Road site,&uot; according to the letter of intent. The lease of the old depot site would also run on terms concurrent with the Roth Hill property.
4Rent on the Natchez Pecan and old depot properties, and the sale price for the hotel site, would be the average of three appraisals are made those sites.
4The company would lease all the sites &045;&045; or, in the case of the hotel site, buy &045;&045; together.
4The company would also pay for any needed infrastructure improvements.