|By Fred Mann, The Wichita Eagle,
Kan.McClatchy-Tribune Regional News
Aug. 26, 2009--Gamblers could start feeding the slot machines in Sumner County's casino near Mulvane in the summer of 2011.
The proposed Chisholm Creek Casino Resort cleared its first hurdle with the state on Monday when the Kansas Lottery Commission approved a contract with Foxwoods Development and Lakes Entertainment to build and manage it at the Mulvane exit of the Kansas Turnpike.
Gary Armentrout, Foxwoods president, told commissioners before the vote that the project would be funded entirely with cash and could be up and running 20 months after it is finalized.
"We have the site, we have the project, we have the funding and we have the management to develop and operate a first-class gaming facility in south-central Kansas," Armentrout said.
The contract will be sent to the state's seven-member casino review board by Friday. The board will have 60 days to conduct a series of hearings with county residents and consultants before deciding whether to approve it.
It could ask for a 60-day extension from the governor if it needs more time. The board also will receive two contracts for Wyandotte County on the same day.
If the review board approves the contract, the Kansas Racing and Gaming Commission would have 10 days to conduct background checks, but is likely to ask for a 60-day extension.
The Chisholm Creek Casino Resort would be southwest of the Mulvane Turnpike interchange between the Turnpike and U.S. 81 about a half-mile south of K-53.
Keith Kocher, the lottery's gaming facilities director, said the 15-year contract calls for an initial investment of $153 million in a 20-month first phase, with the rest of the $225 million minimum investment required by state law to be spent over the next 10 to 12 years.
Armentrout has said the first phase would develop a casino with up to 1,500 slot machines and 30 table games; a deli, buffet and steak house; and a police, fire and ambulance facility.
Components to be added in the next phase would depend on the market, he has said.
Lakes and Foxwoods are searching for a third party to build a hotel on the site with at least 150 rooms. Developers hope to open the hotel about the same time as the casino.
Money invested in a hotel would be part of the required $225 million minimum investment, Kocher said.
The lottery's financial consultant, California-based economist Richard Schuetz, vouched for the financial viability of the project, Kocher said.
Och-Ziff , a New York capital management firm, would supply 50 percent of the funds; Clairvest, a Toronto-based private equity investment firm, would put up 33 percent; and Lakes 17 percent, Kocher said.
The new entity is called Kansas Gaming Partners LLC.
The group has 30 days to pay a $25 million privilege fee to the state. The money will be deposited into the state treasury. It will be refunded if the contract isn't approved.
Kocher said Lakes and Foxwoods would have co-manager duties. Lakes would be the general manager, and Foxwoods would render consulting and other managerial services for a fee.
Lakes Entertainment, based in Minnetonka, Minn., has development and management or financing agreements with four separate tribal casinos in Michigan, California and Oklahoma.
It manages the Cimarron Casino for the Iowa Tribe of Oklahoma in Perkins, Okla.; the Four Winds Casino Resort for the Pokagon Band of Potawatomi Indians in New Buffalo, Mich.; and the Red Hawk Casino for the Shingle Springs Band of Miwok Indians in Sacramento.
Lakes also develops new table games for licensing to tribal and nontribal casinos.
Foxwoods Development is the gaming arm of the Mashantucket Pequot Tribal Nation, which owns and operates the Foxwoods Resort Casino in Ledyard, Conn., the largest casino in North America.
Originally, three groups had bid for the county's casino. All three met privately some time ago and decided it would be best to do a project with 100 percent equity and no debt, Kocher said.
Foxwoods and the developers of a Prairie Sky proposal joined forces until two of the Prairie Sky principals, former Mandalay Resort Group executives Peter Simon and Michael Ensign, pulled out last week.
Over the weekend, Lakes dropped its plans, which included a possible site at Wellington, and joined the Chisholm Creek project with Foxwoods.
Kocher said he asked Armentrout and Lakes representatives to go to the Sumner County Commission to be sure the commission's endorsement of the Chisholm Creek project in May was still valid with the new management structure.
The commission gave its OK on Monday.
The other Prairie Sky partner, Double-Down Development, could become involved in the Chisholm Creek project in the future. That hasn't been determined, Kocher said.
Double Down consists of Topeka developers Bruce Christenson, brothers Bruce and Mike McPherson, James Walker and attorney Jeff Ungerer.
They developed the Derby Marketplace and are building Butler National's Boot Hill Casino and Resort in Dodge City, which is scheduled to open in December.
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Copyright (c) 2009, The Wichita Eagle, Kan.
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