Too soon to pursue casino’s $100,000
Published 12:00 am Friday, July 31, 2009
NATCHEZ — The cash-strapped City of Natchez has $100,000 available to it from a lease agreement with Natchez Enterprises, but the city attorney advises it not be sought after just yet.
The lease option agreement between the city and proposed casino developers states that Natchez Enterprises pay $100,000 for securing its lease of the Roth Hill Road property.
The money becomes available to the city once Natchez Enterprises activates its lease, which President Ted Doody says happened a few months ago.
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But City Attorney Everett Sanders said the contractual process has been skewed and hindered by the project’s stop-and-go approach due, Doody says, to the economic and credit fallout.
That led to an extension of the lease option agreement, multiple times, he said.
And then several contingencies once the option was exercised gummed up the process, as well, Sanders said.
Once the option was exercised, Natchez Enterprises was supposed to review the property title to make sure it fit development requirements.
“Once they gave the city notice, we had a certain period of time to secure that,” he said. “We were not able to do that in that period of time, so we had to request extensions of them to allow us to do that. That extended the contract as well.
Doody said it wasn’t because Natchez Enterprises found a problem with the title.
“The process just needed a little extra time, so we agreed to extend the title,” he said. “The title work is done, it’s been cleared.”
Sanders said the title issue is nothing of concern, and stems mostly from the Roth Hill Road land being comprised of multiple parcels that Natchez Enterprises plans to lease.
Also after exercising the option, the city had to find three appraisers to appraise the land.
“That was another thing we had to do to extend the time period, because we were having difficulty finding appraisers who could do the kind of appraising we needed done,” he said.
A contingency Natchez Enterprises had to fulfill — getting the proper approvals, permits and licenses from the Mississippi Gaming Association — fell through.
Refinancing the project and reworking the plans to scale back on the building’s size nullified prior Mississippi Gaming Commission approval.
So while the $100,000 is technically open for city use, Sanders said, with all things considered, it should not be currently pursued.
“At this point, the money is supposed to be applied toward the first year’s rent, and rent doesn’t kick in, as I recall, until they’re operational,” he said.
Local Attorney Kent Hudson reviewed the contract and said the city could use the money right now if it wanted to.
Sanders said there could be some unforeseen event that would kick back the money to Natchez Enterprises, like if Roth Hill Road fell into the Mississippi River.
According to the contract the city could use the money if Natchez Enterprises defaulted on the contract and the contract was terminated.
“Unless they violate some terms of the contract and walk away, we’d be able to go on and use the money,” he said.
Sanders said he hopes that does not happen.
Doody appeared before the board of aldermen Tuesday night to give an update on the project.
He said financing is mostly in place, but some work is still yet to be done. Doody said no date for groundbreaking has been set.