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A Proposed 10th Casino in Tunica, and the Only One
 with Local Ownership, Struggles to Find Financing

By Oliver Staley, The Commercial Appeal, Memphis, Tenn.
Knight Ridder/Tribune Business News

Apr. 6, 2005 - From the beginning, the developers of the Solid Gold casino have faced long odds.

As envisioned, the casino, which would be the 10th in Tunica, would be the farthest from Memphis, have the smallest gaming floor and the only one with local ownership.

Adding to the casino's hurdles is a court battle with a Chicago banker whom the casino developers claim reneged on a promise to invest $30 million in the project.

Robert Carpenter, who has been working on the Solid Gold project with his wife, Patricia Shaw, for a decade, said he relied on the assurances of Tod Miles when Carpenter purchased a barge and boat to use for the casino.

But the money never materialized and the project is now two years behind schedule, Carpenter said. Carpenter sued Miles, his firm and others for $100 million, based on the revenue he claims the casino has lost by not opening.

"It's put us two years behind," said Carpenter, a Memphis mortgage broker.

"When I met Mr. Miles, Mr. Miles insisted that the casino could open by New Year's Eve of 2003."

But Miles's attorney said there was never a formal agreement and that Carpenter and his wife were acting alone when they purchased the boats.

"There was never a formally executed contract," said Bobby Leatherman, who represents Miles in Memphis. "You don't have a deal until you get it all down on paper and all the documents are signed by all the parties."

Carpenter, however, believes that a July 31, 2002, letter from Miles's Chicago attorney, Jacqueline Criswell, to a ship broker promising a $1 million line of credit toward the purchase of the boat and barge, serves as an agreement to a deal.

In February, U.S. District Court Judge Daniel Breen agreed that the cases against Miles and Criswell had enough merit to allow at least some of the claims to go to trial. He dismissed a claim against Miles's investment banking firm, Kirkpatrick Pettis, because the company was never a part of Miles's agreement.

A trial is scheduled for November, although Miles will again ask for the case to be dismissed, Leatherman said.

The idea for the Solid Gold first came from Shaw in 1996, said Carpenter.

"She said, 'No one locally has a casino in this area,'" Carpenter said. "All those other casinos take the money out of Tunica, to places like Atlantic City and Las Vegas. We're talking about money coming out of Tunica and going to Memphis."

But in an industry that requires huge amounts of capital and is dominated by a handful of corporations, the Carpenters have struggled to get the project moving. One obstacle has been their location at Mhoon Landing, where the first Tunica casinos were located but now would make the Solid Gold the farthest from Memphis. A gambler would drive past nine casinos on his or her way to the Solid Gold.

The Carpenters seemed to get a major break in 2002 when Memphis businessman Sam Maxwell put them in touch with Miles, who expressed interest in the project and proposed issuing bonds to fund it through his firm.

When he decided the bond plan was not feasible, Miles, according to his affidavit, agreed to raise the $30 million individually, becoming a 40 percent partner in the project, as long as certain conditions were met.

Miles claims the conditions, relating to the boat purchase and casino management, were not met and no deal was reached. Carpenter said they were met and they had a deal.

That disagreement is grounds enough for a trial, Judge Breen decided.

In the meantime, Carpenter is looking for new investors even while Shaw undergoes chemotherapy for breast cancer.

"We haven't stopped trying to seek funds," he said. "We're still trying to move forward."

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To see more of The Commercial Appeal, or to subscribe to the newspaper, go to http://www.commercialappeal.com.

Copyright (c) 2005, The Commercial Appeal, Memphis, Tenn.

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

 
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