Casino brings back new amendments
Published 12:00 am Tuesday, February 7, 2012
Natchez resident Paris Winn expressed concern that the 100-space lot would damage the fabric of the historic downtown area and asked if it would be possible for the parking lot at the Natchez Visitor’s Reception Center to be used for those purposes. Shepherd said the city has the obligation to provide the space but, “We’re not picking any property.”
Addressing some of the more controversial measures in the amendment, Shepherd said that the so-called “lender protection provisions” were not intended to trick the city out of money, but instead were intended to allow the lender to take over the casino if Natchez Gaming Enterprises defaults. The measures would also not allow the parties to alter the lease without the lender’s participation, he said.
One change the company is seeking is to put a cap on rent inflation from the city. The lease currently states that the casino will either pay a minimum of $1 million yearly for its lease or 4.5 percent of its gross revenue. That $1 million will be subject to inflation and will be reassessed in five years. Shepherd asked the board to cap the inflation at 8 percent — $1,080,000.
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“You can’t change a quarter slot machine from a quarter,” he said.
“Inflation doesn’t work in the gaming business the same way it does in the grocery store or a tire store. All we can do is grow our revenues by getting more people.”
When City Clerk Donnie Holloway said he thought an 8 percent cap was low, Shepherd said that the cap was for a minimum payment.
“We are hoping to be paying from the (revenue) percentage,” he said.
Attorney Wilson Carroll — who was present representing resident Gwen Ball — asked the aldermen to consider what the casino was asking for when they asked for the inflation cap.
“When they are telling you the $1 million (rent minimum) is the backstop, they are either going to have to find a new market that Lady Luck (and) Isle of Capri has not been able to identify, or they will have to cannibalize (the profits from the other casino),” he said.
The company is also asking for the city to accept a required $1 million community development payment to be spread out over four years at a rate of $250,000 a year.
The reason, Shepherd said, is because the company’s lender wants to ensure the casino has enough padding to meet its financial obligations in its initial years.
To compensate for that, the casino is willing to start making rent pre-payments of $50,000 a month in March, meaning that the city will get a half million dollars this year, Shepherd said.
After Shepherd’s presentation, several residents grilled the casino developers about a number of issues. Attorney Kent Hudson asked Shepherd who the players in the various holding and funding companies are, and asked if the city has been provided with the casino’s revenue projections and marketing studies.
“I think it would be useful for the folks here to have the records that the city has been provided,” he said.
Ball filed an open records request for public information relating to the casino development Jan. 31. City Attorney Everett Sanders said that the city is complying with a public information request, but that the documents were spread across several departments and would take some time to find, but the request would be met. Shepherd, however, said he had no intention of providing the casino’s marketing studies.
“That is protected product, and we will fight it,” he said.
When Carroll turned to the aldermen and told them to consider the nature of a partnership that wouldn’t allow them to see certain documents, Shepherd heatedly responded, “I didn’t say they can’t see it, I am saying you can’t.”
Carroll said that the issue would be decided in Chancery Court.
Other questions raised included emergency access to the casino site and if the city would be liable for any accidents at the casino location.