The Joplin Globe, Joplin, MO

February 15, 2013

Settlement between Cherokee County, gaming company finalized

By Andra Bryan Stefanoni

COLUMBUS, Kan. — An agreement between Penn National Gaming and the Cherokee County Commission is “99.9 percent complete,” the county clerk said Friday, with the county set to receive a settlement of $6.75 million in cash, but no property after nearly five years of negotiations.

Commissioners voted at Monday’s meeting to sign the settlement agreement, which was sent to attorneys working on behalf of the county and returned Friday.

“It appears everything is done,” said County Clerk Rodney Edmondson. “The money should be transferring hands by Tuesday at the latest.”

The county sued Penn National for $53 million in 2008, after the company backed out on a deal to build a state-owned casino. It had been awarded the state contract to manage the casino in Southeast Kansas.

Penn National officials had said competition from the Quapaw Tribe’s Downstream Casino Resort, just to the south of Penn National’s casino’s planned location, led to the decision to withdraw.

In November, a Shawnee County judge ruled in Cherokee County’s favor in its breach-of-contract lawsuit with the casino company. The award amount was to have been determined in a subsequent trial.

In his ruling, Judge Franklin Theis accepted the county’s argument that Penn National executives abandoned the project because they thought there was more money to be made elsewhere in Kansas. The company has the state contract for Hollywood Casino at Kansas Speedway in Topeka.

The Cherokee County Commission was to receive an award of $4.75 million and 237 acres of property worth about $2.5 million in a tentative settlement agreement with Penn National in January.

That agreement fell through, however, because the Quapaw Tribe had a contract pending with Penn National to purchase the 237-acre tract for $2 million. The land was therefore removed from the settlement. The county returned to the negotiating table and settled for $6.75 million cash.

As for the Quapaw Tribe’s plans for the property, Alan Mauk, a transportation consultant for Quapaw Tribe, said it will be designated for economic development.

“We’d like to have some type of shopping center or lifestyle center built there,” Mauk said. “Right now, we’re looking at what options we have in the future, as long as it’s anything that would bring economic development to that area, whether it’s commercial, retail or residential.

“We’re excited. This is going to be the next phase of Downstream’s development plans for the future. It kind of rounds out the area around it, and we look forward to working with the county in the future,” Mauk said.

Sean Harrison, Downstream’s media spokesman, said it’s not yet known beyond that how the property will be used.

“It’s still in the discussion stages. It’s our plan, of course, to do something useful and worthwhile with it, not only for ourselves but for economic development purposes for the whole region. We just don’t have any firm plans for it at this point,” Harrison said.

As for the cash settlement, commissioners have discussed in the past how to use it, but Chairman Richard Hilderbrand said Friday there have been no decisions. He said there are several options for how the money could be used, including paying down debt, offering property tax relief and making repairs to infrastructure.

Legal fees

The county’s Topeka-based law firm will receive 25 percent of the settlement. County Counselor Kevin Cure, who worked on the case locally, will receive 10 percent, meaning the county will receive about $4.38 million.