April 22, 2003 – An attorney for a company planning to build a resort and casino on St. Croix said the firm needs an "unfettered and unequivocal" commitment that the V.I. government will put up $32.5 million toward the project before financing can be completed.
But no such commitment came as the Public Finance Authority board voted on Tuesday to delay a decision on Golden Gaming's request, in order to give the matter further scrutiny.
Treston Moore, attorney for Golden Gaming LLC, told the board that the company can secure the $95 million needed to build the planned resort and casino on St. Croix's South Shore, but not before several changes to a March 27 PFA resolution are made.
At its meeting last month, the board approved the issuing of $41 million in tax-exempt revenue bonds to back the building of a convention center and encourage developer Paul Golden, owner of Golden Resorts LLLP, to make the facility a part of his planned resort and casino complex.
Subsequent reports in the media about the resolution, particularly online, Moore said, may have given investors "pause" as to the government's commitment to the project.
Golden would like to see three provisions of the March 27 resolution changed or implemented, Moore said:
– The final paragraph of the resolution, which states that if the PFA fails to come up with its share of the capital, neither the government nor PFA can be held liable. Moore said that part could be perceived by investors as limiting the government's commitment to follow through on the deal.
– The requirement that Golden come up with the $95 million by Sept. 31 or the resolution becomes null. Moore said that is a stretch and that the deadline might be viable were the proposed resolution in place, but financing contracts could take three to five months to negotiate. Golden asked that the deadline be extended to Dec. 31 with the option of an additional extension of 60 days.
– A new request that several lease agreements be subject to approval by the governor's legal counsel and not the PFA board.
But at Tuesday's meeting, the PFA's bond counsel brought up several issues that caused concern among board members, according to member Paul Arnold. Among them, a background investigation into Golden's personal life raised some eyebrows. (See "Casino developer being sued by his mother".)
Adviser Larry Soule, vice president of Banc of America Securities, told board members that the financial statement presented by Golden was unverified and that calls to the bank the developer listed as his credit reference proved fruitless. He said Golden reported assets of $22.1 million, "but I don't have anything to substantiate the validity of that $22.1 million."
And while the project is feasible and would likely be profitable for St. Croix, Soule said, "I don't see any evidence that Golden Gaming has the ability to contribute 5 percent of the equity in the project." He said equity of 40 to 50 percent would be necessary to obtain financing.
"There were many issues," Arnold, one of the PFA board's two private-sector members, said after the meeting. "The resolution was only just given to us."
He said the questions about Golden's integrity were particularly troublesome: "We're talking about someone who's going to want us to give him $32 million, and the bank wouldn't respond to us when we called for a reference check?"
Arnold continued: "The financial statement is something he typed up for himself; there's nothing verified in it."
Senate President David Jones, who has long supported Golden's efforts, attended the meeting and said the bond counsel and PFA legal counsel were displaying "inflexibility." "We have to make a determination if we want to move forward and make this project happen," Jones said, adding that some board members may have "some other agenda."
Arnold on Tuesday evening was incensed at the accusation and accused Jones of having an agenda of his own.
"Sen. Jones is very much a proponent of the project," Arnold said. "Is he a supporter of the project, or of the developer? There are major concerns with this developer, and we're not going to select anyone haphazardly."
Gov. Charles W. Turnbull, who by virtue of his office chairs the PFA board, said that in order to avoid "making fatal mistakes," the authority must move slowly. "It is the determination of this administration to help the economy of St. Croix," he said, "but we're going to do it in the right way."
The board voted unanimously to postpone a decision on the resolution. Present at the meeting were Turnbull; Arnold; Ira Mills, who sits on the board as director of the Office of Management and Budget; and, via telephone, the other private-sector member, Roy Jackson. Bernice Turnbull, who serves on the board as Finance commissioner, was not present.
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