March 18 2013 12:00 AM

Kicking around the casino proposal

Tuesday, Feb. 7 — Monday night marked the start of the Lansing City Council’s formal discussion on the Bernero administration’s plans to bring a casino downtown.

The Council’s Committee of the Whole spent nearly two hours Monday examining a proposed Comprehensive Development Agreement and an Intergovernmental Agreement between the city and the Sault Ste. Marie Tribe of Chippewa Indians.

The legislative body did not take formal action on the proposals and Council President Brian Jeffries said that likely won’t happen until mid- to late-March — after a pair of community meetings and at least one formal public hearing before the Council.

Four city officials and an outside attorney fielded questions from the Council after outlining details of the two written agreements that basically provide a roadmap for how the casino project would develop. They included Bernero’s deputy chief of staff, Randy Hannan; City Attorney Brig Smith; Lansing Economic Development Corp. President and CEO Karl Dorshimer; Lansing Entertainment and Public Facilities Authority President Scott Keith; and attorney Al Wallace of the firm Miller Canfield.

After explaining the story of how he became a believer in the project (which was described two weeks ago in City Pulse), Smith said the “sequential” development agreement would take place in several phases. First, the Sault Tribe would agree to pay $1.24 million for two parcels adjacent to the Lansing Center downtown. The first and smaller parcel at the corner of Cedar Street and Michigan Avenue would hold a temporary casino while the developer (Lansing Future LLC) builds a permanent casino on the larger parcel north of the Lansing Center. It is not yet decided what would take the place of the temporary casino, or if it will stay as a casino, once the permanent facility is built.

Other components of the 62-page development agreement are building a short, three-lane street between Cedar and Larch streets just north of the Cooley Law School Stadium where a city-owned maintenance garage now stands; building a 400- to 500-space parking garage between the temporary and permanent casino; and possibly another parking ramp with about 2,500 spaces near the new road. The city has the option of whether it wants to own the parking ramps, which Smith said will be decided at a later date.

Before the property transfer from the city to the Sault Tribe can take place, which is expected to happen before Aug. 1, “you’re going to have about a six-month period of due diligence and various contractual obligations that must be satisfied,” Wallace said. While Miller Canfield is working on the city’s behalf, the firm is being paid by the Sault Tribe — one “cost of doing business with the city,” Smith said.

Wallace said an appraised value for the maintenance garage parcel will be available in the next 10 days.

City officials say it’s a $245 million investment on the part of the Sault Tribe. Aside from the development agreement, the 13-page Intergovernmental Agreement details how the city will gain revenue from the project. Two percent of net wagers (the total amount bet minus the money paid out) on electronic games would go toward funding the Lansing Promise scholarship fund and another 1/2 percent would go toward “essential services” provided by the city. The city says that will be about $5 million to $6 million annually for the scholarship fund and about $1.2 million annually for essential services.

Council members Carol Wood and Jeffries questioned the officials about what would happen if the $1.2 million turns out to be less than what it costs to service the casino with police and fire protection. Essentially, could the city be “on the hook” for some of the costs of maintaining the casino? Jeffries asked.

Randy Hannan, deputy chief of staff for Mayor Virg Bernero, said whatever amount the city may end up spending on public safety in addition to the $1.2 million is trumped by the potential economic benefits. “We can expect increased demand for services,” he said. “Going forward, we can spin any number of potential hypotheticals and scenario this thing to death. If, at the end of the day, the city has to pay a small price, it’s a small price to pay for enormous economic benefits.”

Wood asked if the exact amounts of the $1.2 million are decided for police and fire, but that information is not yet available, Hannan said. He added that an “overwhelming majority” of the essential service revenue will be for police and fire protection. Also, exact details of how the “cross-deputization” between Sault Tribe law enforcement and the Lansing Police Department would work are not complete, Smith said.

While the development agreement says it will consider Lansing residents as a hiring preference, it is unclear at this point how many of the 2,200 (700 construction, 1,500 permanent) anticipated jobs would be available for residents. Jeffries expressed concern that after the Sault Tribe hires its own members first, an inconsequential number of Lansing residents would actually have a shot at the jobs.

“Is it first-come, first-served until there are none left?” Jeffries asked.

“I don’t think it’s probably as rigid as that, but we will get back to you,” Smith said. Third Ward Councilman A’Lynne Robinson wondered if it’s possible that Sault Tribe members, who perhaps live far from the city, could temporarily move closer for the jobs. “That is a possibility,” Smith said. “We’ve done our best to mitigate the worst potential affects to the city. It doesn’t mean we can eliminate every potential effect.”

Jeffries also questioned why none of the Lansing Future LLC developers or Sault Tribe members were not at Monday’s committee meeting.

“This was meant to give you an introduction. … To give you a primer of what the deal is like,” Smith said.

Moving forward, Hannan said the administration hopes to hold public hearings on the proposal at the Council’s March 12 meeting and “final passage shooting for March 19.”

Jeffries said he’d like the Council to host informational hearings on the north and south sides of town before that, which would likely occur at the end of February and early March.

In other business, the Council’s short regular meeting before Committee of the Whole involved only business item, which was to approve a tribute resolution in recognition of Pastor Dave Williams and Pastor Mary Jo Williams and their 30th anniversary in ministry with the Mount Hope Church.