Published: Friday, March 26, 1993
Byline: By FRANK DONZE Staff writer
Mayor Sidney Barthelemy refused a state request Thursday to put off until mid-summer leasing the Rivergate to casino developer Christopher Hemmeter, angering several state casino board members, including one who said the whole effort "is screwed up beyond all belief."
The mayor's decision is the latest flashpoint in a developing rift between the Barthelemy administration and the state board, formally known as the Louisiana Economic and Development Gaming Corp.
At the heart of the controversy is the struggle between the state, given the exclusive right to regulate casino gambling in New Orleans, and the city, which seeks to exercise wide authority to shape development of a casino at the city-owned Rivergate site.
The city hopes to strike a development agreement with Hemmeter and his partner, Caesars World, which would run the casino under the Hemmeter proposal.
Caesars can't run the casino unless the casino board awards it a license, but some board members worry that an early deal between the city and HemmeterCaesars might frighten off other industry bidders even before the state invites gambling companies to apply for a state license, probably early this summer.
The lease, which needs the City Council's approval, could be put to a final vote as early as April 15.
On Thursday, Barthelemy made what amounted to a courtesy call to update the casino board on the city's draft lease.
After a largely cordial presentation, board Chairman Max Chastain asked Barthelemy if he would delay signing the lease 60 to 90 days so the board can solicit bidders nationwide to run the casino and pick one from that field - a task it is mandated to perform by state law.
Although Barthelemy refused to alter a self-imposed timetable he said was already weeks behind schedule, he agreed to meet with the board again Tuesday.
The presentation ended cordially, but some board members were furious when they reconvened after Barthelemy's departure.
Chastain and board members James Vilas of Baton Rouge and Gerard Thomas of Natchitoches made clear that trying to raise bidding interest in the rest of the gambling industry after the city had signed a lease with Hemmeter/Caesars would be an exercise in futility.
Chastain bluntly labeled the entire selection process "tainted."
"There is a perception in the gambling industry that Caesars World has this operating license locked up," he said.
Thomas said the process is "screwed up beyond belief" and suggested that the state amend the law to permit gambling at sites other than the Rivergate.
Vilas agreed, adding that a scenario in which no one but the Hemmeter group bid to operate the casino would be "one hell of a light for this board to be in."
And even if the city agrees to a delay, he said, the lease as it is currently written may need a complete overhaul.
"Rather than do it wrong, I would rather stop the whole damn operation," Chastain said.
Earlier this week, the board's chief legal adviser said the draft lease may violate state law in several areas, most notably a provision reserving 80 percent of the casino's jobs for New Orleanians.
Barton Conradi, an assistant state attorney general assigned to the board, said the board could sue the city to block the signing of the lease - a drastic step some board members may be reluctant to take.
Talk of a lawsuit did not surface Thursday. But board members, growing increasingly frustrated with the city's actions, were angrier than ever before.
At this time, four of the board's nine members appear inclined to consider the move: Chastain, Vilas, Thomas and Sallie Cooper Page of Alexandria.
Those who appear reluctant to challenge the city in court are Joan Heisser and Leroy Melton of New Orleans, Bert Rowley of Chalmette and Dr. Jack Frank of Crowley.
The ninth member of the board, William Nungesser, the former head of the state Republican Party, said Thursday he wants to try to work out the board's problems with Barthelemy before issuing ultimatums.
For his part, Barthelemy said he wants no confrontation with the state and is only looking out for the best interests of the city. But before the mayor turns his attention to the casino board's concerns, he must first deal with more than 200 amendments to the lease proposed by City Council members.
Aides to the mayor said Thursday that it is unlikely the city will back down on major provisions of the lease, particularly the 80 percent jobs requirement.
"This whole thing is like the Cold War," said a City Hall official familiar with the negotiations. "Both sides have the weapons to nuke the project. It's just a question of whether we can reach a compromise."
The city refused the state casino board's request to delay
leasing the Rivergate to developer Christopher Hemmeter until
after the state has awarded a gaming license.
City Council members filed more than 200 amendments to a draft
casino lease at the Rivergate, setting back a vote on the lease
from April 1 to April 15. B-1
The state may approve two more gambling boats for New Orleans
today, giving the city three. B-1
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