City panel ditches one casino proposal

It plans to review other submissions

RUSSELLVILLE — The Russellville City Council’s gambling review panel tossed out a proposal from county-backed Cherokee Nation Businesses on Thursday from among four contenders for a Pope County casino license — but an official for the Oklahoma-based casino operator said the company didn’t actually apply.

The city offices announced through an email shortly after the noon Wednesday deadline that four operators — Cherokee Nation, Kehl Management of Iowa, Warner Gaming of Nevada and Choctaw Nation Division of Commerce of Oklahoma — had submitted proposals to be reviewed by the city’s committee.

On Thursday — before the full applications were posted to the city’s website — Erin Michael with Russellville Mayor Richard Harris’ office said the Cherokee application would not be considered because it was incomplete.

City Council Member Eric Westcott, who serves on

the gambling committee, said a consent and release form that is required for submission was not signed.

But Chuck Garrett, chief executive officer of Cherokee Nation Businesses, said a “project overview” was hand-delivered Wednesday to elected officials throughout Pope County, “including those in the City of Russellville.”

“We also made it available to the community at large via our website,” Garrett said. “This was not intended to be a submission to the Community Gaming Evaluation Committee. Instead, it was further effort on our part to keep the community and elected officials informed.”

Westcott said he spoke to Dustin McDaniel, an attorney for Cherokee Nation Businesses, late Thursday and was told that the project overview was provided to the city only as “courtesy.”

“They never intended to be a part of this process, and that’s OK,” Westcott said. “They were certainly welcomed and invited.”

The city’s gambling committee was set up in early September to offer residents an “open and transparent process” to learn more about casino proposals. The Pope County Quorum Court’s surprise casino-license endorsement in August of Cherokee Nation Businesses came with allegations of secret meetings.

The state Racing Commission, which determines which business gets the license, earlier this year denied licenses to the four applicants plus Gulfside Casino Partnership because none contained the endorsements of current local officials. Afterward, Cherokee Nation received the Quorum Court’s backing and then reapplied to the Racing Commission, which subsequently allowed new applications until Nov. 18.

Amendment 100, approved by voters in November, allows one new casino each in Pope and Jefferson counties, and the expansion of gambling at the racetracks in Hot Springs and West Memphis. It requires county official endorsements of new casinos, as well as from city officials if the casino locates in a city. The commission’s rules state that the endorsements must

come from current officials.

Gulfside did not give a proposal to the city’s committee. The company sued the Racing Commission because its initial application included endorsements of officials who left office in December.

In a side-by-side comparison of all five most recent applications, the proposals — which range in cost from Kehl Management’s $216 million to Gulfside’s $254 million — are similar in amounts and amenities.

Gulfside, whose information was culled from its original application to the Racing Commission, was the only applicant that did not provide an economic development package like the one Cherokee Nation provided to the county Quorum Court before receiving its endorsement.

Russellville, which was excluded from sharing in the Cherokees Nation’s $38.8 million agreement with the county, figures prominently in the proposals by the other applicants.

The Choctaws pledged an initial $43.8 million community investment, which includes a $27.6 million upfront payment to Pope County and a $2.5 million payout to Russellville.

Other beneficiaries would be the Russellville Regional Economic Development Alliance, other cities, fire protection districts, education foundations and arts centers.

Other promises include $100,000 annually to the alliance and a scholarship program valued at $2.8 million annually for Pope County high school graduates to attend Arkansas Tech University.

The Hard Rock Arkansas proposal by Warner Gaming offers an “up-front mitigation and development fee” of $18 million to be shared by the county government, Russellville and other cities.

The proposal also promises an additional slice of net gambling revenue each year above the required tax rate. A projected $2.74 million per year — or 2.35% of annual net gambling revenue — would be divided between the county and the city.

Hard Rock promises that another 1.75% cut of net gambling revenue, estimated at $2.04 million per year, would fund a charitable foundation.

The River Ridge Casino Resort proposal submitted by Kehl Management promises an “up front investment” of $40 million with $20 million paid to Pope County. The remaining $20 million would be paid in $10 million installments the next two years.

Recurring benefits proposed by Kehl include the formation of a nonprofit organization to receive a 4.5%-5% cut of net gambling revenue, which is expected to be about $5 million annually.

Kehl Management will also offer a local ownership option of up to 20% in River Ridge Casino Resort.

While Gulfside’s application did not include an initial investment, the casino operator has said it would establish the Pope County Education Foundation if granted the license.

The nonprofit would be funded by tax-deductible contributions, including a $20 million commitment from Gulfside.

“When granted a license, Gulfside will build its firstclass River Valley Casino Resort, a $254-million investment that will create significant tax revenue, stop gaming dollars from going to casinos in Oklahoma and bring long-term economic benefits to Pope County,” Gulfside co-owner Terry Green said in an email when contacted Thursday. “Like it has for the Gulf region, it will be a strong community partner — providing ongoing support for educational initiatives, first responders, nonprofits and economic development efforts.”

The Cherokee Nation Businesses economic development agreement includes a $2 million annual contribution to a charitable foundation established by the county and another $100,000 each year to the Russellville Regional Economic Development Alliance.

The proposals from all five casino operators offer similar amusement amenities, such as water parks and pools.

All proposals include an outdoor amphitheater, a convention center and high-rise hotel.

Hard Rock Arkansas also would build an indoor sports complex.

The three applicants will present their proposals to the public at 6 p.m. Monday. The venue is to be chosen today.

The City Council is to consider the committee’s recommendation Oct. 17.