From the News of the North via Pechanga:
A Mississippi resort-casino venture has turned out to be a bad bet for the Lac du Flambeau Indian Tribe, which as a minority partner sunk an estimated $25 million on the Grand Soleil project in Natchez, only to see it headed for the auction block in three weeks.
According to a trustee’s notice of foreclosure and sale, parts of the Grand Soleil Casino Resort property, including three separate tracts, will be sold to the highest bidder on Feb. 12. at the Adams County (Miss.) courthouse. The notice was published this week in the Natchez Democrat newspaper. click here to read published notice
Two previous attempts to initiate the foreclosure process by United Mississippi Bank and other lenders and creditors were averted by deals struck last year. United Mississippi Bank designated Natchez lawyer Bruce M. Kuehnle, Jr. as its trustee in the latest foreclosure proceedings, according to the legal notice.
Kuehnle could not be reached for comment, and was said by his office to be traveling and unavailable. A receptionist said previous foreclosure proceedings were halted after negotiations, but didn’t know if the Feb. 12 sale would proceed as scheduled.
The Lac de Flambeau Band of Lake Superior Chippewa Indians, through one of its development corporations, sold $50 million in bonds in October 2008 to consolidate debt and pay for the Grand Soleil project. According to a bond offering prospectus, nearly $16 million of the proceeds was loaned to finance the Grand Soleil, formerly called the Emerald Star Casino.
NN.N contacted Grand Soleil general manager Wendy Grandin for comment and was told the casino was not open, and that she would return a call for further information.
Reached for comment today, Tribal administrator Bill “Buzz” Beson said he was not totally familiar with the matter and had no further information.
Earlier this month, the Tribe defaulted on the bonds, prompting a lawsuit from Wells Fargo Bank, acting as trustee for the sole bondholder Saybrook Capital LLC of California, seeking to force the Lake of the Torches Casino in Lac du Flambeau into receivership. A federal judge dismissed the lawsuit because the bond agreement hadn’t received prior approval of the National Indian Gaming Commission. Wells Fargo has not said whether it would appeal the ruling.
The Grand Soleil received a gaming license in May 2008 from the Mississippi Gaming Commission and was planned to open in the fourth quarter of 2008, but was then beset by financial problems and lawsuits, and wound up selling its casino boat in 2009.
The tribe partnered with two other major investors on the project, including Big River Enterprises, which was to develop the property on the banks of the Mississippi River, according to an operating agreement dated Feb. 16, 2007 involving Emerald Star, the Tribe and Big River.
According to the agreement, Emerald Star principal Charles Cato of St. Petersburg, Fla., had an initial 45% interest, the Lac du Flambeau Tribe a 27.5% stake, and Big River a 27.5% ownership in the project. The name of the project was later changed to the Grand Soleil.
Judge Rudolph T. Randa of the Western U.S. District Court wrote in his Jan. 11, 2010 decision dismissing Wells Fargo’s lawsuit, “Unfortunately, the Grand Soleil project has been plagued by problems since it began and is still not operational. The Tribe struggled to make bond payments and was forced to reduce or eliminate many programs that are important to the health and welfare of the Tribal members. The failure of the Grand Soleil project to materialize exacerbated the economic stress caused by the bonds. The expected revenue from the project was intended to fund repayment of the bonds.”
After winning the license, then-Tribal Chair Victoria Doud, stated, “We are excited to be a partner in this, our second casino resort development, and we are looking forward to a successful partnership and future in the beautiful historic city of Natchez.” That license, however, has since expired.
The Grand Soleil Casino was to feature 850 slot machines, 19 table games and a live poker room with six tables when open. The complex included a 124-room hotel with a restaurant and lounge, which was renovated from a Ramada Inn that had originally been built on the property.
The tribe has 3,400 members, governed by a 12-member Tribal Council with one existing vacancy, and had scheduled a Jan. 25 meeting at 5 p.m. at the Tribal Center to select a new tribal president – a position that has been vacant since the resignation of Carl Edwards last Nov. 23.
Beson said today that the naming of a new president likely would be taken up at a meeting set for Feb. 8, but had no agenda available yet. As last report, nine candidates had put their names up for consideration, including former Tribal Chair Tom Maulson, who was one of two council members in 2008 to vote against the bond refinancing.
Turtle Talk 