Home News Local news Casino Commission Grants Golden Gaming Yet Another Extension

Casino Commission Grants Golden Gaming Yet Another Extension

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Dec. 29, 2006 — In August, after granting Golden Gaming Resorts its seventh extension on its casino reservation license, Casino Commission Chair Eileen Petersen warned the developers of the casino-and-hotel project, "Don't even think about filing another extension." Nevertheless, the commission voted Friday to grant Golden Gaming its eighth extension.
Commission members indicated that another pending lawsuit — this time filed by slot-machine operators Traxco Inc. — has further jeopardized Golden's ability to sustain the confidence of its investors. Given the circumstances, the commission has allowed the embattled developer additional time to clear pending litigation.
"We are asking for six more months," Golden Gaming's attorney Treston Moore told commission members. Moore's plea for an extension took more than an hour as he outlined the reason for his petition.
The development, headed by New Jersey businessman Paul Golden, received a Casino II license reservation in 2001, for an initial time period of two years. In August, the project was granted its seventh extension for a period of four months.
The proposed development would include a six-story, 605-room hotel and a casino resort on approximately 297 acres in the Great Pond area. The project will include a golf course, a restaurant, an access road and parking.
In November, Traxco filed a temporary restraining order against the V.I. government in V.I. Superior Court, claiming that changes had been made to zoning lines in the Great Pond — the site of the proposed resort — and that the government's approval of the permit was based on false information.
However, Judge Leon Kendall denied that motion, stating although there may be problems with the zoning map, the economic benefits of the project are in the people's best interest.
Traxco operates slot machines at the Randall "Doc" James Racetrack and is funded by V.I. Treasure Bay, which also funds the Divi Carina Bay Casino the only casino on St. Croix.
Moore, who said Traxco's court filing was a "tactical lawsuit" to kill the project, cited the fact that Traxco had never challenged any aspect of the resort in the past.
"We have drawings and a term sheet, and we are poised to receive the funding — and all of a sudden Golden Gaming is a threat," Moore said.
"The timeliness [of Traxco's lawsuit] was not by accident," Golden added. "It's crystal clear that Traxco wants to kill the project."
"We need another extension that is realistic to get us were we need to be," Moore pleaded. "Without the [casino license] reservation there is not security for the lenders. It is the engine that supports the project."
Moore compared the three segments of the development the casino, convention center and the hotel to a tripod, in that when one falls, the entire structure falls. "You can't cut off our legs now," Moore said.
Golden is also facing a lawsuit initiated by the V.I. Conservation Society, which filed a writ of review in Superior Court in 2005. The society asked the court to review the Board of Land Use Appeal's decision to grant Golden a coastal zone permit. However, in May, Judge Maria Cabret upheld the issuance of the permit. The society has appealed Cabret's decision. The appeal is now pending in District Court.
Despite the two pending lawsuits, Moore said the development has made "remarkable progress" since receiving its last extension in August. He also said a $15 million loan had been secured, although he did not name the source. (On Thursday, the Senate passed a bill containing a provision to allow the Public Finance Authority to give Golden Gaming a guarantee on a $15 million "interim loan.")
"I have enough funding to carry the project through the litigations," Golden said.
"We have opponents, they are committed and well funded," remarked Golden who continued to remain optimistic about the project. "I have never been deterred," Golden said.
The three commissioners present — Petersen, Lloyd McAlpin and Devin Carrington — listened intently to Moore and Golden's statements, asking few questions.
"We are here with a bare quorum, Petersen said. "I am usually on vacation at this time."
A motion made by McAlpin to grant the extension was seconded by Carrington. Petersen then called for discussion on the motion.
Carrington said it's important to "share the wealth" when it comes to casino development. "The law allows for three casinos," he said, adding that after those casinos are established, the commission has the discretion to reevaluate the situation. Carrington noted that the commission should "facilitate development as well as regulate casinos."
"Good cause has been shown for this extension," Petersen said. She then posed herself two seemingly rhetorical questions: "What do we have to lose by granting the extension?" and "What do we have to gain ?"
To which Petersen answered, "We have much more to gain than we have to lose."
The extension was unanimously approved by the commission members present.
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