Indiana Casino News Source: http://www.courier-journal.com
By Lesley Stedman Weidenbener
lstedman@courier-journal.com
The Courier-Journal
INDIANAPOLIS — The two companies that joined forces to build a casino in French Lick are in mediation over a dispute, but the conflict should not delay its opening in November, a state regulator said yesterday.
The Bloomington-based Cook Group and Indianapolis-based Lauth Property Group are working to "resolve some differences" related to control of the project, said Ernest Yelton, executive director of the Indiana Gaming Commission.
He said, however, that he did not "really have much information" about the dispute.
The companies are partners in Blue Sky Casino LLC, which is developing the French Lick Springs Resort & Casino.
The project includes a casino with 1,000 slot machines and 25 table games, as well as several restaurants and event space. It also includes the restoration of the French Lick resort, as well as work on a hotel in nearby West Baden Springs, a swimming pool complex and an 800-space parking garage.
Yelton said yesterday that the dispute between the two companies has had "no impact whatsoever on this project."
However, Blue Sky could face disciplinary action from the commission because it failed to secure all its financing for the project by a May 1 deadline.
Yelton revealed both issues to the commission at a meeting yesterday in Indianapolis. He said his staff is reviewing the financing issue and won't make any recommendations for penalties until the next meeting in September. He said the offense could result in fines.
The contract between Blue Sky and the gaming commission originally called for the company to close on $270 million in bonds and a $30 million revolving loan -- similar to a homeowner's line of credit -- before Feb. 1. The company asked for and received an extension until May 1.
Yelton said yesterday that the company had closed on the bonds by that deadline but did not finishing arranging the revolving loan until later in the month. He said Blue Sky expects to close on the loan in a few weeks.
Christopher Stolarski, a spokesman for Blue Sky, referred questions to the partners. Vernon Back, general counsel for Lauth, did not return a message left at his office.
Steve Ferguson, Cook Group chairman, said the parties have agreed not to disclose any information about their discussions. As a result, he said he's "restricted" in making any comment.
During yesterday's meeting, commission secretary Don Vowels said the two companies had an agreement that called for Lauth to transfer 25 percent of its interest in the project to Cook if the casino's financing wasn't in place by April 15.
"At this point in time there has been no determination as to whether there has been any change in ownership," Yelton told the commission. "That's still under debate."
Vowels said he is concerned about Blue Sky's financing issues, and he questioned whether the commission staff should be more aggressively reviewing the company and the project, as it had with Trump Hotels and Casino Resorts, the original winner of the bid for the French Lick project.
Vowels was chairman of the commission when it picked Trump, but not when that deal fell apart.
Trump declared bankruptcy after the commission chose it to develop the project. It never actually signed a contract with the state.
Yelton said yesterday that the situation was different because Trump had refused after the bankruptcy to commit to the project, and Blue Sky now has the financing to complete it.
Reporter Lesley Stedman Weidenbener can be reached at (317) 444-2780.
Reporter Grace Schneider contributed to this story.
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