June 29, 2007 — The decision to pull the plug on Golden Resorts or grant yet another extension was delayed Friday when Casino Commission members voted to postpone their ruling until July 5.
Before the vote, Traxco attorney Mark Eckard read into the record portions of a 2003 investigative report on Paul Golden by the law firm of Buchanan Ingersoll.
The commission voted to postpone after hearing more than four hours of testimony. Golden Resorts attorney Treston Moore was scheduled to board an afternoon flight to the States, and Moore had already rescheduled his flight to be present at the meeting, noted Casino Commission Chairwoman Eileen Petersen.
"It's not possible for us at this point to make a decision without a break," Petersen said.
The commission voted unanimously to postpone the decision at about 1:30 p.m., just before a scheduled lunch break, extending Golden's reservation to July 5. The commission needs time to absorb the information gathered in order to make a deliberative decision, Petersen said.
The commission has granted unprecedented leniency to Golden Gaming by awarding eight extensions to its casino-license reservation. The proposed development would include a six-story, 605-room hotel, casino resort and convention center on approximately 297 acres in the Great Pond area. Golden first applied for a Casino II license reservation in 2001. The last extension was granted in December 2006 for a period of six months.
Moore's plea for another extension cited unresolved legal issues stemming from a lawsuit initiated by the V.I. Conservation Society, which has not yet been addressed by the court.
"This is a case of mutual frustration that we find ourselves in," Moore said. Although an "emergency decision" was requested, the case was not put on the June 15 court calendar, and the next St. Croix case hearing is scheduled for Oct. 15.
"The court failed to render a timely decision," he said. "It's an extremely depressing and unfortunate situation."
The lawsuit was initiated in 2005 when the society filed a writ of review in Superior Court. It asked the court to review the Board of Land Use Appeal's decision to grant Golden a coastal-zone permit. In May, however, Judge Maria Cabret upheld the issuance of the permit. The society has appealed Cabret's decision. The appeal is now pending in District Court.
Saying "nothing can begin without a ruling from the court," Moore appealed for a change in the law "so it takes more than a notion to stop a multi-million dollar project." It reportedly costs less than $400 to file a writ of review.
No End in Sight
The commissioners, including Devin Carrington, Lloyd McAlpin and Petersen, expressed their concerns as to whether Golden could survive the onslaught of litigation.
"Realistically your next turn is October, and that can be appealed," Petersen said. "So we are talking about the end of the year." She added, "The Traxco matter cannot be overlooked," indicating it could extend the matter another year or two.
Carrington agreed: "I am concerned with the obstacles that continue to crop up if you are allowed an extension."
Golden restated his commitment to the project. "There is no question to my commitment," he said. "It's been more than seven years since we began … we have many accomplishments."
He suggested hidden motives behind halting construction on St. Croix.
"There has been no (hotel) development since 30 years ago — since Carambola — because a few people don't want to see development," Golden said. "There is a reason, and it's not because of Paul Golden. It's because of the blocks that are thrown in your path, especially as you get closer to the end."
Golden Resorts also faces a lawsuit filed by Traxco, the company that operates and manages the St. Croix Randall "Doc" James Racetrack. In November 2006, Traxco filed a temporary restraining order against the V.I. government in Superior Court, claiming that changes had been made to zoning lines in the Great Pond — the site of the proposed resort — and that the government's approval of the permit was based on false information.
Judge Leon Kendall denied that motion, however, saying that although there may be problems with the zoning map, the economic benefits of the project are in the people's best interest.
Traxco manages and operates the Randall "Doc" James Racetrack and is funded by V.I. Treasure Bay, which also funds the Divi Carina Bay Casino — currently the only casino on St. Croix.
At the meeting, the Traxco attorney reiterated the company's legal argument against the developer, saying, "Golden has obstructed and delayed the progress of Traxco action at every turn." Traxco claims there are "contractual and statutory restrictions" that prohibit construction on the site of the proposed development. At an August 2003 Senate Committee of the Whole meeting, Eckard said, Golden was advised to have a local court "review and opine on these restrictions before any development could take place."
Additionally, Eckard read into the record a letter from his firm, Hamm and Barry, which included portions of a 2003 report on Paul Golden by the law firm of Buchanan Ingersoll, which investigated his background and business dealings.
Background Report
Eckard said the report found that:
— Golden had never operated a hospitality facility or conference center;
— Golden's expertise "seems to be limited" to the ownership of an eatery and a dancers' club;
— as of 2003, Golden Gaming was a "freshly minted company with no infrastructure";
— Golden "was twice convicted of burglary";
— Golden was charged with "charging admission to his dance club and allowing a dancer to perform in a lewd manner";
— Buchanan Ingersoll was unable to find "any evidence that Golden has successfully built or managed a major construction project of any sort" or had any "success in the gaming industry"; and
— Golden named Amboy National Bank as a credit reference. When contacted by Buchanan Ingersoll, however, the bank "refused to give any information concerning Mr. Golden," Echkart said.
The Traxco attorney continued listing findings in the report, including Golden getting sued for fraud by his mother, open judgments against Golden, an arrest for "theft by deception," violations of local ordinances and resisting arrest, among other charges.
After listening intently to Eckard's testimony, Petersen said the commission is mandated by the Legislature to investigate all information pertaining to an applicant, and all information gathered is to remain confidential until released by the court. She asked Eckard how familiar he was with the Casino Commission law. He replied that he had read it, but was not too familiar with it.
Carrington asked Eckard if he was knew whether any of the allegations he read would prevent an applicant from being granted a license under VI law. "To the best of my knowledge, no," Eckard said. Carrington asked why he included in his testimony the fact that Golden was not affiliated with any other casino venture having "Golden" in its name.
"I was being overly inclusive," Eckard replied.
"I feel a bit insulted by the tactics that this letter is trying to use," Carrington said. "It suggests that we don't know our role. You should have been more measured in your attempt."
Petersen also challenged Eckard.
"Are you aware that the Division of Gaming and Enforcement hires a top-notch investigating firm to look into the background of all our applicants?" she said. "They are international and highly respected."
Petersen said she had additional questions for Eckard, but because he admitted he wasn&#
39;t fully informed about the provisions contained in the casino law, she would put her questions in writing and deliver them to him.
At a break in the proceedings, Carrington told the Source the commission had seen and was aware of the Buchanan Ingersoll report. "It's not information that we don't know," Carringston said. "The commission at that time made a determination of suitability."
The Casino Commission will reconvene at 9:30 a.m. Thursday.
Editor's note: Correction The Source erroneously reported that Traxco operates slot machines at the Randall "Doc" James Racetrack. Traxco manages the operation, but there are no slot machines at the racetrack.
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