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 Kansas Officials Ponder the Lack of a Hotel in
 Three Proposals for a "Destination Casino"


By Fred Mann, The Wichita Eagle, Kan.McClatchy-Tribune Regional News

May 6, 2009--WELLINGTON -- Sumner County commissioners focused on hotels and drainage as they questioned prospective casino developers Tuesday.

Three developers seeking their endorsement offered lengthy presentations of resort plans in front of about 100 people at the Raymond Frye Complex.

None of the developers plan to build a hotel in the first phase of the projects, leading commissioners to wonder whether they were being offered true "destination" casinos as required by state law.

After the meeting, Commission Chairman Garey Martin said he was disappointed at the lack of hotels.

"Naturally you got to be disappointed because it probably would've meant more revenue, but we're going to take what we get," he said.

"I don't see how you can see a 'destination casino' without a hotel," Commissioner Jim Newell said during the meeting as he questioned Gary Armentrout, president of Foxwoods Development.

Foxwoods proposes an initial investment of $225 million for a resort at the Mulvane exit of the Kansas Turnpike.

The project could grow to $500 million as the market allows, Nelson Parker, vice president for development at Foxwoods, told the commission.

"We would like to see that development come on as soon as possible," Armentrout said.

Asked by Newell to define a "destination casino," Armentrout said it is one that offers amenities other than a casino, such as restaurants, bars and entertainment venues, which the company proposes in its first phase.

Lakes Entertainment chairman and CEO Lyle Berman said he would put up a hotel as fast as he could. He said Lakes has opened several other casinos around the country without hotels.

"Our intent would be to have it in Phase One, but I don't know that we can have the money," Berman said.

Lakes has proposed a $240 million first-phase facility for either the Mulvane exit or the Wellington exit.

Peter Simon, a former Mandalay Resort Group executive and partner in South Central Gaming Partners, said his group would build a hotel as the demand grows.

That company proposes an initial $225 million investment in a casino for either the Mulvane turnpike exit or the southeast corner of Hydraulic and K-53, which is just east of the exit.

The casino would be built with cash, he said. The group would take a fiscally responsible approach by building a core product, then growing as it got to know its customers.

"We're building this with our own money, no debt, no delay," Simon said. "Because of that we want to make sure we build the right things."

The project would open with a casino, dining and entertainment, he said. A hotel, more casino space, an events center and an outdoor arena are among amenities that would be added in a second phase as the market allows, he said.

Drainage, opposition

Considering the recent weather in the region, Commissioner Eldon Gracy asked developers whether they can get rid of rainwater that collects at the proposed resort sites.

Armentrout and Berman said that their engineers have assured them drainage problems can be handled.

"Drainage problems come down to money," Berman said.

Both developers said they would build retention facilities for water at their sites.

Simon said a combination of retention facilities, water treatment and other processes would take care of the problem at his two proposed sites near Mulvane.

Gracy also asked developers whether they ever built casinos where local residents opposed them.

"Casinos are little bit like Wal-Mart in that regard," Armentrout said. "Very often we come into a community, and the community is very skeptical."

But, he said, he has found that over time, the community accepts and embraces the development.

Berman said Lakes has opened most of its casinos in rural areas, and people who oppose them soon see that things they feared, such as crime and prostitution, don't happen.

Land values rise and jobs are created, he said.

"Emerging gaming has been an overwhelming success," Berman said.

What's next

Audience members weren't allowed to speak at Tuesday's meeting. Commissioners said they will take written comments until noon Friday.

They will meet at 1:30 p.m. Monday to discuss the proposals and make their endorsements. They could endorse as many proposals as they want, or none.

Local endorsements are required by developers before they can sign contracts with the Kansas Lottery, which will own the casinos.

South Central Gaming Partners has proposed a third site for its casino, at the southeast corner of Belle Plaine Road and K-53 about 3 miles east of the turnpike.

That land has been annexed into the city of Mulvane and requires the city's endorsement rather than the county's.

Simon, a partner in the group, said after the meeting that no time has been set for the city to act on an endorsement. He said he would take the project to the Mulvane City Council as soon as the council gives him a time for it.

"It will be done within the time frame required," Simon said.

The lottery has until June 30 to negotiate and sign contracts with casino developers.

After that, a seven-member casino review board has until Sept. 1 to select the winning proposal.

Reach Fred Mann at 316-268-6310 or fmann@wichitaeagle.com.

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To see more of The Wichita Eagle, or to subscribe to the newspaper, go to http://www.kansas.com.

Copyright (c) 2009, The Wichita Eagle, Kan.

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