State agrees to delay vote on casino

TOPEKA — Frustrated and even angry at times, members of the state's casino review board reluctantly granted a request by Sumner County's casino partners to delay voting on the project.

Chisholm Creek Casino Resort representatives said they would withdraw their plans if the board voted to approve the project Tuesday.

Board members decided to ask that the governor grant a 60-day extension of their April 19 deadline to decide on the proposal.

But they greeted the developers' request for the delay with some hostility.

Board member Jim Bergfalk said developers left the board no choice after they threatened to walk out.

"I resent it. I resent the way it came about. I resent the timing," he said.

John Frieden, a lawyer for Chisholm Creek, asked for the delay, citing concern over legislation that could be amended to add slot machines at Wichita Greyhound Park. He also cited confusion over zoning at the site of the resort near the Mulvane exit off the Kansas Turnpike.

A bill sent to the Senate floor would give the state's racetrack owners more slot-machine revenue than provided by the state's expanded gambling law.

Although Wichita's track has been deleted from the bill, Frieden said he expects an attempt on the Senate floor to put it back in when lawmakers return from their break on April 28.

If that happens, he said, "My clients would no longer be interested in this project."

The board's consultants have predicted that the addition of slots at the Wichita track would cut the gambling revenue at Chisholm Creek by 24 percent, Frieden said.

Board members were frustrated that they didn't know until Tuesday — 13 days before their deadline to act — about developers' desire to delay the vote.

"I feel like we're put in a very difficult position," said Matt All, board chairman.

All said that if Gov. Mark Parkinson denied the extension, the board wouldn't have much time to arrange another meeting before April 19.

"We run the risk of logistically not being in compliance with the law. We can't turn on a dime," All said.

Board member Jackie Vietti said Chisholm Creek was asking the state to bear a disproportionate amount of the risk in this situation.

"You're asking us to delay a vote until you have as much certainty as you can have. On the other hand, it leaves us in an uncertain position," she said.

Frieden also said he expects a recent zoning approval by the Sumner County Commission to be challenged by the city of Mulvane, because the Kansas Court of Appeals has upheld the city's annexation of the casino property.

The county plans to appeal the annexation ruling to the Kansas Supreme Court, but months could pass before the court decides whether to consider the appeal.

Frieden said developers probably could work out platting and zoning issues with the city, but need more time.

"Right now, we don't know where we are," he said.

Earlier in the meeting, board members and a consultant said they thought Chisholm Creek was taking the wrong approach to meet the potential competition from a tribal casino planned for Park City by phasing in amenities rather than adding more of them more quickly.

A report by Raving Consultants panned Chisholm Creek's Phase I amenities and said even later phases might not be enough to compete with the Park City casino.

Chisholm Creek's contract with the state calls for a $150 million first-phase with few amenities, growing into a $225 million investment that would add more depending on if and when the Wyandotte Tribe of Oklahoma builds its Park City casino. The tribe is awaiting federal approval to do that.

William Eadington, a gambling expert from the University of Nevada-Reno, said Chisholm Creek's contract gives it the latitude to just run a slot house and nothing else if developers think their casino isn't succeeding.

The more rational response to competition is to add amenities, not just operate a slot house, he said.

All said Chisholm Creek's approach makes him wonder if it is the best possible contract for the state, which is the central issue the board must decide.

"I'm struggling with that," All said.

Tim Cope, president of Lakes Entertainment, which would build and manage the casino, defended the approach.

"We clearly want the best, also," he said. "We are not in the business of putting up slot joints."

Cope said casinos all over the country are suffering in this economy because they overbuilt.

"We don't want to overpromise and underachieve," he said. "We'd rather underpromise and overachieve."

Cope said more amenities don't necessarily make a casino better. Lakes has taken both approaches, and ended up scaling back or changing amenities at some of its properties according to customer wishes.

Eadington also was concerned that while the Chisholm Creek partners have been skittish about competing with a Park City casino and slots at the Wichita dog track, Och-Ziff Real Estate, which will put up 50 percent of the cash for Chisholm Creek, recently entered a partnership to build a new casino in Atlantic City.

"I found that a serious disconnect," Eadington said.

He questioned Chisholm Creek's commitment to the project.

The fact that it is the only bidder in Sumner County means it might feel it can bid whatever it wants and keep going back to renegotiate its contract, he said.

Said Bergfalk: "If you spend five years negotiating a prenuptial, you probably shouldn't get married."

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