Deal’s on the table for metro casino

"MN Governor"

02/24/2005

Patricia Lopez, Star Tribune
February 24, 2005


The state of Minnesota and three northern Indian bands are closing in on an agreement to launch a metro-area casino/entertainment complex that would be operated through the Minnesota State Lottery, tribal leaders told the Star Tribune on Wednesday.

George Goggleye, chairman of the Leech Lake Band of Ojibwe, said tribal attorneys were working out details with the governor’s office on Wednesday and an announcement could be made next week.

Ron Valiant, executive director of the White Earth Band, said the bands and the governor’s office “are getting very close to final agreement. We’re down to figuring out the final details.”

Dan McElroy, Gov. Tim Pawlenty’s chief of staff, confirmed late Wednesday that, “yes, we’re close. We’re down to details and language.” McElroy also said he expects an announcement next week.

If the deal happens, it would represent a breakthrough for Pawlenty, who has been pressing for more than a year to get the state’s Indian-owned casinos to share revenues with the state.

Pawlenty failed in earlier attempts to force bands with the most profitable casinos to make revenue payments and in recent months turned for potential partners to the Red Lake, White Earth and Leech Lake bands—whose isolated casinos are less lucrative.

Valiant and Goggleye said the deal will require legislative approval.

Initially, Pawlenty said he thought that a casino run under the auspices of the State Lottery would be allowed to bypass legislative authority, but Valiant and Goggleye said that is no longer the case.

As envisioned now, Goggleye said, “we’re looking at a gaming floor of no less than 4,000 [slot] machines, a hotel complex, entertainment and several food venues. We are planning on all the amenities that give casinos the ability to compete in the market.”

Valiant said the bands could put up a temporary domelike structure within six months of receiving legislative approval and use the proceeds to finance construction of a permanent casino complex. The permanent structure probably would open within two years, he said.

The tribal casino would be “an independent operation,” Goggleye added, not connected with racetracks. Owners of Canterbury Park racetrack have been angling for slot machines, fostering speculation about a potential deal with tribes, and a harness racing track is planned for Anoka County.

“What happens once it gets to the Legislature, we don’t know,” Goggleye said. “But right now it’s not connected to anything else.”

Valiant said the tribes probably would hire a professional company to manage the casino, with tribal members sitting as a board of directors.

In addition to slots, he said the casino probably would feature poker, blackjack and possibly roulette and keno “if they would bring in some real money.”

Should the new casino feature such a broad array of games, it would be the only one in the state to do so, and could present serious competition to Mystic Lake, run by the Shakopee Mdewakanton Dakota and the Grand Casinos operated by the Mille Lacs Band of Ojibwe.

Both of those bands, along with other members of the Minnesota Indian Gaming Association, rejected Pawlenty’s proposal that they trade revenue payments to the state in return for guaranteed exclusivity. They have said Pawlenty was attempting to divide the bands and rob the gaming association members of a primary means of economic development.

Pawlenty has positioned the issue as one of “fairness,” noting that Minnesota is one of the few states whose tribes do not make revenue payments even though it has one of the most lucrative Indian gambling industries in the country. As he has leaned toward the northern bands, he also has made a point of noting that Red Lake, White Earth and Leech Lake make up 85 percent of the state’s Indian population, but remain among the state’s poorest tribes.

Goggleye said that the shared profits from a metro casino could prove an enormous boon to the Leech Lake band. “This would be huge,” he said. “Just for Leech Lake alone, if we could pump another $20 to $30 million a year, it would allow us to do so much more.”

Goggleye said his band would put the money toward road repair, improved water quality, affordable housing, a health care facility, extended care for seniors and better schools. “Education is huge for us,” he said. “We want our children to become doctors, lawyers, leaders. This money would help.”

Location unknown

Where in the sprawling Twin Cities area such a casino complex could land appears to be anyone’s guess. Valiant said sites in Burnsville and Albertville have come up, but “we’re leaving it open right now.”

The Mall of America, he said, “keeps getting brought up. ... It would be perfect, but we don’t want to go where we’re not wanted.”

A commercial casino at the mall could generate as much as $400 million a year for the state, according to State Lottery estimates, but Bloomington officials and legislators have been adamant in their opposition.

McElroy said the bill will be “location-neutral,” and would require legislative approval. “I’m hopeful that we have an excellent case,” he said, “but it will not be without opponents.” He added that it is “too early” to talk about the kinds of games the casino might feature.

Also on Wednesday, a House committee reviewed two bills calling for residents of cities or towns considered for a state-sponsored casino to have power to approve or reject it.

The bills’ chief sponsors, Rep. Ann Lenczewski , DFL-Bloomington, and Rep. Ray Vandeveer, R-Forest Lake, both say a casino shouldn’t be allowed in a town or city without approval by local referendum.

Some of Vandeveer’s constituents are concerned that a harness racing track and card room recently approved for Anoka County could end up becoming a site for a casino that they oppose.

“I think ... we’d like to have the people make these decisions,” Vandeveer told the House Gaming Division.

Lenczewski, who opposes a casino at the Mall of America, said she wasn’t convinced that the Bloomington City Council would continue to oppose such a venture.

Goggleye and Valiant declined to say how much an Indian-owned metro casino could generate, but Pawlenty’s budget proposal planned on a $200 million up-front licensing fee and an ongoing revenue stream to the state of about $100 million annually.

Goggleye said some of those numbers have changed in the course of negotiations. “We’re getting very, very close to a proposal that we are much more comfortable with,” he said on Wednesday. “They’ve come down and our numbers have come up. We need to have more of a benefit to the tribes. That’s the whole reason we’re doing this.”