The Joplin Globe, Joplin, MO

April 8, 2010

Kansas: Wichita-area casino in doubt after governor’s decision

The Associated Press

TOPEKA, Kan. — A proposed casino south of Wichita was in doubt Thursday after Gov. Mark Parkinson refused to grant its developers a regulatory reprieve.

Partners in the $225 million Chisholm Creek project wanted to delay a state board’s decision on their plans. They said they must have local zoning issues settled and need to know whether legislators will rewrite Kansas’ gambling laws to make their project less profitable.

The Lottery Gaming Facility Review Board reluctantly put off a vote for 60 days after Chisholm Creek officials said this week that they’d abandon the project otherwise — even if the board approved it. But under state law, only Parkinson could extend the board’s April 19 deadline.

Parkinson rejected the board’s request for an extension. He noted that the state’s current budget already anticipates collecting an upfront, $25 million fee from Chisholm Creek for the right to build and manage the casino for the Kansas Lottery.

“The state of Kansas needs a clear understanding of its finances,” Parkinson said in a statement. “It is in everybody’s best interests to move forward with this proposal in a timely manner and to avoid further delays.”

Chisholm Creek attorney John Frieden said the partnership is still considering how to respond. He said Kansas law limits the governor’s discretion in denying a deadline extension.

“The action of the governor failed to follow the law and consequently has jeopardized state revenues this year and perhaps forever for a state-owned gaming operation in south-central Kansas,” Frieden said.

Chairman Matt All said the review board will meet before April 19 to vote on the project.

“We didn’t really see a strong reason to delay it either, but we were trying to be as accommodating to the applicant as possible,” he said.

Chisholm Creek would build its casino near Mulvane, about 20 miles south of Wichita. Under Kansas law, the lottery would own the rights to the new gambling and the gambling equipment, down to the cards and dice.

The state would claim not only its $25 million fee but 22 percent of the gambling revenues.

The lottery and local officials have been trying to bring a casino to Sumner County for more than two years, and Chisholm Creek was the only remaining applicant.

Janis Hellard, director of the county’s economic development office, said even if Chisholm Creek pulls out, an improving economy will make a casino investment attractive.

“We’re very optimistic about it and feel like it’s still a good location,” she said.

Chisholm Creek’s partners include Lakes Entertainment Inc., of Minnetonka, Minn., which has been involved in 11 Indian casinos in seven states. The others are Clairvest Group Inc., a Toronto merchant bank, and Och-Ziff Real Estate Acquisitions, based in New York. They would put up most of the money.

Chisholm Creek officials already were concerned about plans by the Wyandotte Nation to build a casino in Park City, north of Wichita. The northeast Oklahoma tribe is seeking the federal government’s permission.

But in recent weeks, Chisholm Creek officials also have worried that Kansas legislators will allow a second vote in Sedgwick County to authorize slot machines at Wichita Greyhound Park. Voters rejected the idea in 2007, and the track closed soon afterward.

Chisholm Creek officials have warned legislators that passing such a proposal would force them to abandon their project.

A bill — without a slots vote — is before the Kansas Senate. Lawmakers reconvene April 28 to wrap up their business for the year.

As for zoning issues, they were tied up by a legal dispute between Sumner County and Mulvane over whether the city could annex the casino site. The Kansas Court of Appeals recently ruled in the city’s favor, and Chisholm Creek must deal with Mulvane officials.