$3.1 million settlement reached in casino dispute

Published: Thursday, June 6, 2013 3:04 p.m. CDT • Updated: Tuesday, June 11, 2013 10:02 a.m. CDT

A settlement has been reached.

In March 2012, Clarke County Development Corporation (CCDC), which is the qualified sponsoring organization for Lakeside Casino, filed a petition for judicial review against Iowa Racing and Gaming Commission and HGI-Lakeside LLC (HGI), regarding HGI’s gaming license to operate the casino.

The case was pending in Clarke County District Court.

A separate lawsuit was also filed against HGI and Affinity Gaming LLC, which is the parent company of HGI, regarding the parties’ management agreement.

That petition was pending in the United States District Court for the Southern District of Iowa.

The parties reached a settlement June 3 in order to resolve the pending lawsuits.

CCDC Executive Director Bill Trickey spoke to Osceola City Council during a June 4 meeting.

Trickey said the lawsuit issue originally began with claims of CCDC only receiving 1.5 percent of the adjusted gaming revenues, and the community deserving approximately 3 percent.

“Yesterday, we were able to reach a settlement agreement with casino representatives,” Trickey said. “As you know, we’ve been in a legal dispute with the casino for four years trying to get our management contract renegotiated. It’s been a strain on all of us.”

Settlement terms

As part of the settlement terms, HGI will pay CCDC $600,000, which can be used by CCDC for community betterment projects at its discretion.

Additionally, HGI will pay $2.5 million to CCDC, and the funds will be distributed to Clarke County Reservoir Commission (CCRC) to be used exclusively for water purposes.

These payments must be made on or before July 1.

“We are pleased to have this settlement in place, and it is a major step forward for the citizens of Clarke County, our communities and our continued economic development and community-betterment initiatives,” Trickey said.

Water purposes

When it comes to “water purposes” in the settlement, there is an ongoing CCRC Squaw Creek Watershed project, which could provide a water supply for Osceola and SIRWA (Southern Iowa Rural Water Association) with an 816-acre lake. The reservoir project could provide 2.2 million gallons of water per day.

Funding from the settlement will go to the reservoir funding.

The total project cost for the reservoir is estimated at $37.6 million. Funding for the project includes many sources, especially funding from local option sales taxes.

“As you know, an important part of the eminent-domain process, declaratory judgment-process, is being able to demonstrate that you have the financial wherewithal to complete the project,” Trickey said. “So, that $2.5 million will help us with that effort.”

Additional provisions

The parties agreed to additional provisions in the event the casino is sold in the next five years. The provisions are related to increases in revenue sharing.

The settlement now goes before Iowa Racing and Gaming Commission for final approval.

Councilman David Walkup said he gave thanks to the people who have been working to reach the settlement throughout the past couple of years.

“All the work that you had to do for that, that was not easy. I appreciate it,” he said. “Plus, the result of that was a positive issue for our community. So, thank you very much.”

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