RIVERGATE IS TRUMP CARD
Published: Tuesday, August 17, 1993
Byline: By TYLER BRIDGES and PETER NICHOLAS Staff writers
Vowing not to leave town without a fight, Christopher Hemmeter said Monday he will not relinquish his right to develop the Rivergate site unless Harrah's Jazz Co. agrees to give his company 50 percent of the casino project.
Hemmeter said Grand Palais Casino Inc. deserves 50 percent because it has the rights to the Rivergate, the casino site, while Harrah's has the state gaming license.
"My half is not for sale, and their half is not for sale," Hemmeter said. "We have to work something out or you don't have a full pie."
Hemmeter sounded more conciliatory Wednesday after the state casino board selected Harrah's over his Grand Palais to operate the Rivergate casino. He said he thought Harrah's and his company could amicably negotiate a deal.
Hemmeter said Monday he has adopted a tougher line after taking a closer look at the state casino law, which showed, he said, that Harrah's cannot operate a temporary casino without Grand Palais' approval.
It had been widely held that Harrah's could operate a temporary casino without Grand Palais' cooperation. Under this interpretation Harrah's would have the upper hand in negotiations with Grand Palais and would be able to operate the temporary casino whether or not it concluded a deal with Hemmeter for the Rivergate.
But Hemmeter said a rereading of the state law by four law firms showed that only the "official" state gaming operator can run the temporary casino. He said that being the "official" gaming operator includes having rights to the Rivergate, which were awarded to Grand Palais by Mayor Sidney Barthelemy in November. State officials were unavailable late Monday for comment on Hemmeter's interpretation of the law.
George Solomon, a partner in Harrah's Jazz Co., declined to comment on Hemmeter's remarks.
Hemmeter said under his 50-50 proposal Harrah's would be the casino operator, not Caesars World, his partner in the casino bid to the state gaming board. He did not rule out accepting Harrah's proposal to renovate the Rivergate.
Meanwhile, Gov. Edwards Monday urged Harrah's executives to level the Rivergate and build a new casino, but conceded that the owners do not seem enthusiastic about the idea.
After a luncheon meeting at the Governor's Mansion with officials from Harrah's, Edwards said he will not use his influence with the casino commission to compel the Harrah's group to raze the Rivergate. He said, though, that from an aesthetic and business standpoint it would be a better move.
"They were not very receptive to the idea," Edwards said. "It's a business decision they have to make for themselves.
"I would not, even if I have the power, force their hand. I just don't think we ought to go that far. But I told them they would find the mayor and the (City) Council and most of the business community in New Orleans wants it (the Rivergate) rebuilt."
Edwards said a new building is justified given the huge numbers of gamblers and huge amounts of revenue the casino is sure to attract. He said that Harrah's may not fully appreciate the casino's financial potential.
Edwards said there are pronounced differences between the operating style of Harrah's versus Caesars World.
Caesars would have offered more sports and entertainment, while Harrah's is more of a conservative operator, Edwards said.
Nonetheless, Edwards said from his own gambling experience he is confident Harrah's will run a successful casino.
"I know the Harrah's people," he said. "I've spent more time at Harrah's than I have in Caesars, going back to the time I used to go to Lake Tahoe all the time. And I can tell you Harrah's is as good an operator as Caesars."
The governor said he is uncertain about whether there will be a swift and painless transfer of the Rivergate lease from the Hemmeter group to Harrah's. Edwards said he met with Hemmeter Sunday night to discuss the lease.
On another subject, Edwards said that the best deal for the state is to accept Harrah's offer of a $125 million up-front payment with no strings attached. None of the other two offers Harrah's made as part of its casino application is as attractive, Edwards said.
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