(Lawrenceburg, Ind.) – A Lawrenceburg grant to Hollywood Casino could be held up by Lawrenceburg City Council, possibly opening the city to litigation.
In 2012, the Lawrenceburg riverboat applied for a $425,000 redevelopment grant. According to Hollywood Casino executives, the riverboat would use the grant money to convert a temporary CSX Railway crossing on the west side of the casino property into a permanent crossing. The casino would then turn over land to the City of Lawrence.
The city has proposed building a riverfront park, amphitheatre, and marina on the Ohio River bank there. There would also be additional casino parking to relieve the weekend overflow parking situation into the city parking garage at Ivy Tech Community College.
“It does benefit the city to open that gate up,” said Lawrenceburg Mayor Dennis Carr.
During a Lawrenceburg City Council meeting Monday, council members Jane Pope and Mike Lawrence contended that the grant did not properly receive council approval last year. While reading the ordinance in question out loud, Pope said the money was budgeted out of the 10 County Regional Grant program, not out of the redevelopment fund.
Council voted 3-2 to approve all claims except for the one paying out the grant to Hollywood Casino, pending consultation with City Attorney Leslie Votaw and Council Attorney Nick Kyle with law firm Barnes & Thornburg. Council members Jane Pope, Doug Taylor, and Mike Lawrence were the majority.
During discussion of the grant prior to the vote, the meeting atmosphere became contentious.
“Every (grant) we approved except for this one. This bypassed city council and went to redevelopment,” argued Pope.
“Because it was a development agreement and not an interlocal agreement,” explained Leslie Votaw. “It was ratified and it was approved (by council)… …You said ‘all said grants approved since January 1 (2012) are hereby ratified.’”
Votaw also pointed to a subsection in the ordinance saying that the guidelines for the interlocal grant program do not apply to redevelopment agreements. Because Hollywood Casino is within the City of Lawrenceburg, it cannot by state law enter an interlocal agreement.
Councilman Mike Lawrence said he did not agree with Votaw and met recently with the Federal Bureau of Investigation. The FBI is believed to be conducting an investigation into the city following a December subpoena seeking records on the city’s grants and loans dating back to 2007.
Hollywood Casino Lawrenceburg Director of Operations Ahmed Ahmed voiced his frustration with council’s reneging on a grant the casino believed was all but approved.
“It is my understanding that it has passed all the obstacles and due diligence. It was sponsored, ratified, and today it’s a formality, if you will,” said Ahmed, who was in attendance at the council meeting for another topic, but decided to address council on the issue he was previously unaware of.
Councilman Bill-Bill Bruner – who along with councilman Aaron Cook has been at odds with the council majority – asked Lawrence why he voted for the grant.
“If (Leslie Votaw) is correct, we was misguided by (former city attorney) Mr. (Joe) Votaw,” Lawrence replied. “It was my understanding that all grants had to come back to council.”
Referencing the city’s deal with the casino to build the $49 million Lawrenceburg Event Center and Hotel which would then be owned and operated by Hollywood, Lawrence said he would never vote for a grant for the riverboat. He then accused the casino of “trying to trick us.”
Pope asked Ahmed why the casino cannot show goodwill to Lawrenceburg by investing $425,000 of its own money in the project.
“The grant request was submitted. We have a lot to show as far as goodwill,” he answered.
Lawrence said the city should not give gaming revenue back to where it came from.
“You think they give it to us because they want to? I guarantee you that if it wasn’t in the agreement, they would not give us the money,” Lawrence told his fellow council members.
Ahmed asked if the formality was the only reason for stopping the grant. Pope said she wants to make sure things are done the right way and she has nothing personally against the casino.
Ahmed also called out Lawrence on his repeated claims that the casino is receiving $49 million for the event center. According to an Eagle 99.3 News article from 2011, the project will be funded by $25 million in city grants. Hollywood Casino parent company Penn National Gaming would receive a $14 million, 20 year loan at four percent interest, generating $6.6 million for the city over the life of the loan. Because the center would be in a TIF district, the city will invest $10 million which will generate a return of $21 million over 20 years. Penn National will also chip in $1 million in equity.
Ahmed offered to leave his phone number for Lawrence to set up a meeting to discuss the event center deal.
Lawrence asked why it is the city’s obligation to pay for a railroad crossing.
“It is not that I feel it is the city’s obligation. It is a program that is offered to the public that we were willing to take advantage of, just like everybody else,” Ahmed answered.
There is a question whether the council’s potential denial of the claim would be in the best interest of the city.
“Do you understand that this opens us up to liability?” Votaw asked council. “This development agreement is a binding contract. If the money is not paid, that opens us to a lot of things – things I don’t think you guys are even grasping.”
Votaw said she believes the grant was done legally. She suggested council have another look at the ordinance establishing the grant program to prevent a similar situation from arising in the future.