Lakeside debuts 90-room expansion

It’s written in the cards. A new era for Lakeside Hotel and Casino began Memorial Day weekend.

A ribbon-cutting ceremony was held 2:30 p.m. Friday for the opening of a new 90-room hotel addition featuring a saltwater pool and hot tub.

“We’ve known for a long time we’ve needed more rooms,” said Robert Thursby, vice president and general manager of Lakeside, during an interview and tour May 24.

With the first phase of construction in completion, the existing 60 original hotel rooms were closed Tuesday to begin renovations.

The second phase of construction is scheduled to be finished Sept. 1. It will include an 800-seat amphitheater along West Lake and quick-serve restaurant.

Thursby said he’s hoping the quick-serve restaurant will be open by July 4.

Once the entire project is finished, there will be a total of 150 hotel rooms.

More opportunities

“I can’t utilize my events center enough,” Thursby said. “There’s a market out there for business conferences.”

He added, Lakeside has had to turn away bus groups because there’s not enough rooms for people to stay.

One purpose of the amphitheater is for it to be used for concerts, including college music programs from Simpson College or Graceland University, if they so choose.

“It will be the best seat in town for the fireworks not this year, but the following year,” Thursby said.

Thursby called the entire expansion a “design-built concept.”

The road to get to this opening hasn’t always been an easy one for Lakeside.

Company issues

Bankruptcy was declared in 2009. The lenders and creditors of the operation currently own Lakeside, because the Herbst family, the former owners, lost their equity and interest in the company.

“I would add they are the only ones who have been hurt in this,” Thursby said. “Every single one of our vendors was paid on time. We went to great lengths to make sure that happened.”

Lakeside Casino’s Las Vegas-based owner Affinity Gaming technically isn’t a new owner. Thursby wanted the public to be aware of that.

In short, Affinity Gaming is the parent company of Lakeside.

A major change in the renovation and expansion project is the removal of the Mr. Terrible sign from along Interstate 35.

The logo of Mr. Terrible belongs to the Herbst company and they have the rights to it. A Lakeside Hotel and Casino sign has taken its place along the interstate.

“We’ve always been HGI-Lakeside, and still are,” Thursby said. “It’s our corporate name. There’s new players in the game, but it’s kind of like Harrah’s gets new owners every day because they are a publicly traded stock with people buying and selling. It’s still the same company.”

At the completion of the bankruptcy proceedings, the new board of directors authorized Thursby to spend $10 million on the expansion and renovation project.

“That is, in itself, amazing,” he said.

Legal disputes

However, things haven’t always gone smoothly with legal issues.

According to a March 29 Osceola Sentinel-Tribune article, Clarke County Development Corporation has taken legal action against the operators of Lakeside saying it should receive “at least” 3 percent of the casino’s gross revenue.

CCDC entered into the agreement with Southern Iowa Gaming Company in 1997. In 2004, the casino was sold to Herbst Gaming, Inc., with CCDC’s consent.

Currently, the casino gives CCDC 1.5 percent of its adjusted gross receipts. The city of Osceola receives 1.25 percent of the casino’s revenues. Earlier this year the Osceola Water board approved a $77,650 increase in lease payment being received from the casino.

CCDC has also taken action against Affinity Gaming and HGI-Lakeside seeking a ruling that the casino’s management and operating agreement may not be assigned without their prior consent.

The lawsuits cite a state law requiring a 3 percent minimum payout for casino-operating agreements entered into since 2004.

“We believe it’s a completed deal that the bankruptcy judge said, told them it’s the same company,” Thursby said. “That contract, like every other contract we’ve had, carries forward both ways.”

Future

Legalities aside, Thursby said he is excited about other numerous possibilities for the additional property Lakeside owns.

Lakeside leased property last year to Pilot Travel Center in a $3 million truck-stop expansion.

Thursby said there’s always the possibility to use more land for retail space, movie theaters or even bowling alleys down the road.

“Frankly, we’re looking for more people to partner with,” he said.