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HomeNewsArchivesPFA BACKS CONVENTION HALL, NOT GOLDEN GAMING

PFA BACKS CONVENTION HALL, NOT GOLDEN GAMING

April 8, 2003 – A resolution by the Public Finance Authority to fund the construction of a convention center for the planned Golden Gaming casino and resort project on St. Croix "isn't worth the paper it's written on," according to Senate President David Jones.
Outside a Senate Economic Development, Agriculture and Consumer Protection Committee hearing on Tuesday, Jones said the government is moving forward in bad faith. "This was done by design," he said. "No Wall Street investor is going to accept this."
The Public Finance Authority board on March 27 approved the issuing of $41 million in tax-exempt revenue bonds as a way of encouraging developer Paul Golden, owner of Golden Resorts LLLP, to build a convention center for St. Croix as part of his planned casino and resort complex. But the PFA resolution requires Golden to obtain an irrevocable financing commitment for $95 million by Sept. 30. If he doesn't, the resolution will become null and void.
(See "$41m PFA bond issue OK'd for convention center".)
There has been some public criticism of the bond money being made available to Golden without soliciting competitive bids for the development of a convention center.
PFA administrative and finance director Kenneth Mapp testified on Tuesday that the public had raised "legitimate" concerns, and "it behooves all of us to respond to those issues."
He said the PFA by statute is required to raise capital for the convention center, but only if the developer secures the required funding for the project. He added that bond proceeds may not be put into an escrow account solely for the developer's control.
"There are a number of concerns or demands the developer is asking for that cannot be met," Mapp said. "How can we give [bond proceeds] to a private person to have complete control over the development and design of a conference center?"
He said the PFA has no commitment at this time to Golden Gaming's development of a convention center and that the board "is looking at a number of options" with respect to its development.
Sen. Norman Jn Baptiste said the deal "reeks." He said the government is being fiscally irresponsible in taking government money to build part of a resort. "Some people talk a fancy talk but walk a crooked walk," he said.
But Jones said those assertions were based on "disjointed and inaccurate" information. He said potential investors in the project would need to see at least 50 percent equity before putting money behind the deal. "I think it's important for the public to understand the full impact of what we're trying to accomplish," he said. "Convention centers do not make money; it's an amenity. Because we have the facility, people will come to St. Croix."
Jones said the letter of intent was 18 months in the making and was formulated with the advice and consent of PFA bond counsel and other financial advisers. "The letter of intent was no mystery or anything concocted in an unstraightforward way," he said.
He said he has asked for an amendment to the resolution, but would not go into specifics about its nature.
Paul Golden, a New Jersey casino developer, has proposed to build a 400-room hotel, a casino of at least 10,000 square feet, and an 18-hole golf course on some 265 acres at Great Pond Bay on St. Croix's southeastern coast. In October 2001, the Casino Control Commission "reserved" one of the island's two allowed Casino II licenses in his name for a period of two years. The other has been reserved for the proposed Seven Hills Beach Resort and Casino at Robin Bay.

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April 8, 2003 - A resolution by the Public Finance Authority to fund the construction of a convention center for the planned Golden Gaming casino and resort project on St. Croix "isn't worth the paper it's written on," according to Senate President David Jones.
Outside a Senate Economic Development, Agriculture and Consumer Protection Committee hearing on Tuesday, Jones said the government is moving forward in bad faith. "This was done by design," he said. "No Wall Street investor is going to accept this."
The Public Finance Authority board on March 27 approved the issuing of $41 million in tax-exempt revenue bonds as a way of encouraging developer Paul Golden, owner of Golden Resorts LLLP, to build a convention center for St. Croix as part of his planned casino and resort complex. But the PFA resolution requires Golden to obtain an irrevocable financing commitment for $95 million by Sept. 30. If he doesn't, the resolution will become null and void.
(See "$41m PFA bond issue OK'd for convention center".)
There has been some public criticism of the bond money being made available to Golden without soliciting competitive bids for the development of a convention center.
PFA administrative and finance director Kenneth Mapp testified on Tuesday that the public had raised "legitimate" concerns, and "it behooves all of us to respond to those issues."
He said the PFA by statute is required to raise capital for the convention center, but only if the developer secures the required funding for the project. He added that bond proceeds may not be put into an escrow account solely for the developer's control.
"There are a number of concerns or demands the developer is asking for that cannot be met," Mapp said. "How can we give [bond proceeds] to a private person to have complete control over the development and design of a conference center?"
He said the PFA has no commitment at this time to Golden Gaming's development of a convention center and that the board "is looking at a number of options" with respect to its development.
Sen. Norman Jn Baptiste said the deal "reeks." He said the government is being fiscally irresponsible in taking government money to build part of a resort. "Some people talk a fancy talk but walk a crooked walk," he said.
But Jones said those assertions were based on "disjointed and inaccurate" information. He said potential investors in the project would need to see at least 50 percent equity before putting money behind the deal. "I think it's important for the public to understand the full impact of what we're trying to accomplish," he said. "Convention centers do not make money; it's an amenity. Because we have the facility, people will come to St. Croix."
Jones said the letter of intent was 18 months in the making and was formulated with the advice and consent of PFA bond counsel and other financial advisers. "The letter of intent was no mystery or anything concocted in an unstraightforward way," he said.
He said he has asked for an amendment to the resolution, but would not go into specifics about its nature.
Paul Golden, a New Jersey casino developer, has proposed to build a 400-room hotel, a casino of at least 10,000 square feet, and an 18-hole golf course on some 265 acres at Great Pond Bay on St. Croix's southeastern coast. In October 2001, the Casino Control Commission "reserved" one of the island's two allowed Casino II licenses in his name for a period of two years. The other has been reserved for the proposed Seven Hills Beach Resort and Casino at Robin Bay.

Publisher's note : Like the St. John Source now? Find out how you can love us twice as much -- and show your support for the islands' free and independent news voice ... click here.