Developers abandon plans for Wichita-area casino, costing state $25M fee built into budget

Developers abandon plans for Wichita-area casino

TOPEKA, Kan. — A developer abandoned plans Friday to build a state-owned casino south of Wichita and asked for its licensing fee back, creating a new problem for the state as it struggles with its budget.

The St. Louis-based Chisholm Creek partnership had paid $25 million for the right to build and manage a casino for the Kansas Lottery. In similar circumstances in the past, the fee has been returned.

The state couldn’t spend the fee until the casino plan cleared the regulatory process. But state officials thought the deal would go forward, freeing up the money before July 1, and they incorporated it into the current budget.

“It will have to be dealt with,” State Budget Director Duane Goossen said.

Legislators could cut spending when they return April 28 from their annual spring break, or more likely, Goossen said, he could delay school aid payments due in June to July.

“We’ve closed larger gaps, so I don’t think $25 million is reason to panic, but it will require a responsible solution,” said Seth Bundy, a spokesman for Democratic Gov. Mark Parkinson.

Chisholm Creek sent a terse letter to the lottery Friday, backing out of the deal. The letter didn’t give a reason, but it came the day after Parkinson refused to extend the April 19 deadline for a state board to vote on whether the Chisholm Creek project could go forward.

The Lottery Gaming Facility Review Board had asked for a 60-day extension at Chisholm Creek officials’ request. Those officials said they needed to see whether the Legislature was going to rewrite the state’s gambling law in a way that made their venture less profitable.

Parkinson said delaying a decision was “not in the best interests of Kansas” and the state needed to know whether it could count on the $25 million fee from Chisholm Creek.

Bundy said it’s better for the state know now that the money won’t be available than to find out later.

Chisholm Creek had proposed a $225 million casino-and-hotel complex near Mulvane, about 20 miles south of Wichita. Its project would have been the third casino built under a 2007 state law.

Chisholm Creek attorney John Frieden did not comment Friday about the partnership’s withdrawal.

But its officials have worried for months about a proposal from the Wyandotte Nation to build a casino in Park City, north of Wichita. The northeast Oklahoma tribe is asking for permission from the federal government.

More recently, the developer also expressed concern that lawmakers might allow a second vote in Sedgwick County on authorizing slot machines at Wichita Greyhound Park. Voters rejected the idea in 2007, and the track closed. A gambling bill — without a second slots vote — is before the Kansas Senate.

“I don’t think they were comfortable with the political environment,” said Janis Hellard, director of the Sumner County Economic Development Commission.

The Kansas Lottery could reopen its search for a developer — a process could take months or longer. The Lottery Commission is expected to consider the idea at an April 23 meeting.

Mulvane Mayor Jim Ford said he’s not sure there’ll be other applicants, but Hellard expressed confidence a new proposal would emerge soon.

The 2007 law authorized one casino in each of four areas. Private developers build and manage them, but the lottery owns the gambling rights and equipment, including the cards and dice.

A casino in Dodge City opened in December. A proposal to build a casino at Kansas Speedway, the NASCAR track in Kansas City, Kan., has cleared the regulatory hurdles.

Along with Sumner County, where Chisholm Creek had planned to build, the law authorizes a casino in either Crawford or Cherokee counties in southeast Kansas. The lottery hasn’t received any applications for that area.

On the Net:

Chisholm Creek: www.chisholmcreekcasinoresort.com/

Kansas governor: www.governor.ks.gov

Lottery Gaming Facility Review Board: krgc.ks.gov/