JACKSON, Miss. (AP) — Gulfport developers have finally made their planned casino big enough to win Mississippi Gaming Commission approval.
The commission voted 3-0 Thursday to allow Rotate Black MS to begin construction on a $112 million project, which would include a hotel and overlook Gulfport's small craft harbor. The city has been eager for the project to go ahead to gain more casino taxes.
"We've waited a long time, we've worked hard, we're psyched up," casino executive Dial Cooper said after the vote.
The approval came despite reports by the Sun Herald (http://bit.ly/Q4BPHU ) that Cooper and Rotate Black Chairman John Paulsen have faced legal and financial troubles elsewhere.
Rotate Black had been rejected twice previously by commissioners, who told developers that their plans were not big or interesting enough to draw new gamblers to Mississippi.
"I don't think there's been a project that's received more attention or gotten more due diligence," Gaming Commission Chairman Jerry St. Pe said.
St Pe has repeatedly emphasized that new casinos shouldn't just suck up existing business but should expand the market
"We have an obligation to make sure that capacity is just not filled, but filled in a manner that meets the best interest of the state," he said.
This time, Rotate Black officials expanded their hotel proposal from 100 rooms to 205 rooms. They're promising a four-star hotel under the Hemingway brand licensed by the family of the late author Ernest Hemingway. Mark McDaniel of contractor Roy Anderson Corp. said the company plans to spend about $170,000 a room.
"The four-star rated hotel is a tremendous part of the value proposition," Gaming Commissioner John Hairston said.
Developers also expanded the casino floor to more than 34,000 square feet, although this would still leave it smaller than all but three of the current 12 Mississippi coast casinos. Its hotel would be smaller than all but one of the nine coast casinos that currently have rooms.
The casino and hotel are projected to employ 650. Cooper said construction could start this fall, and is expected to last 14 months.
Rotate Black says it has raised $21 million from investors doing business as Gulfport Gaming LLC and secured an $81 million loan from Brigade Capital. Rotate Black itself now owns only 2 percent of the Gulfport venture, but that share could expand to 11 percent based on future stock options.
Paulsen, Cooper and Rotate Black were sued in Nevada over the company's failure to develop a casino after investors acquired land. A Nevada judge ordered them to pay investors $9.7 million. Rotate Black has appealed, saying the investors misrepresented the value of the land and the improvements needed.
Paulsen filed for personal bankruptcy in Michigan, citing $25.7 million debts. Some of that debt would be repaid using up to $300,000 in monthly management fees the company would get from the casino.
The company also lost possession of a 240-foot gambling boat after the company couldn't pay repair bills, docking fees and other expenses.
Paulsen and Cooper's ownership interest in the casino, through Rotate Black Inc., has shrunk to 2 percent as other investors have been asked to play a larger role in financing, Paulsen said. The men inked the leases in 2010, including one for city property.
The operators must still pass background investigations by the state Gaming Commission and receive suitability approval before they can open the casino. Cooper said he didn't think Paulsen's financial troubles would keep him from being licensed.
"I think he will be fine," Cooper said Thursday.