1 PUBLIC HEARING

BEFORE THE GAMING COMMISSION

2 STATE OF MISSOURI

5 IN RE: Missouri Gaming Commission

6 May 24, 2004

9 BE IT REMEMBERED that the above-entitled matter

10 came on for a public hearing at the Maryland Heights

11 Community Centre, 2344 McKelvey Road, in the City of

12 Maryland Heights, State of Missouri, on the 24th day of

13 May, A.D., 2004, commencing at the hour of 9:00 in the

14 morning of that day, said hearing having been called by

15 the Chairman of the Gaming Commission pursuant to the

16 issuance of due notice to all parties in interest, and

17 the following is the transcript of the record made of

18 all proceedings had during the course of that hearing.

1 A P P E A R A N C E S

2 Floyd Bartch - Chairman

3 Ralph Biele - Commissioner

4 Judith Sutter-Hinrichs - Commissioner

5 Jack Gant - Commissioner (via telephone)

6 George Hartsfield - Commissioner

7 Kevin Mullally - Executive Director

8 Angie Franks – Administrative Assistant

1 MR. KEVIN MULLALLY: If you can go ahead and

2 find your seats, I would like to go ahead and get

3 started.

4 MR. CHAIRMAN: I'll call the meeting to

5 order.

6 MS. ANGIE FRANKS: Chairman Bartch?

7 MR. CHAIRMAN: Here.

8 MS. FRANKS: Commissioner Gant?

9 COMMISSIONER GANT: Here.

10 MS. FRANKS: Commissioner Hinrichs?

11 COMMISSIONER HINRICHS: Here.

12 MS. FRANKS: Commissioner Hartsfield?

13 COMMISSIONER HARTSFIELD: Here.

14 MS. FRANKS: Commissioner Biele?

15 COMMISSIONER BIELE: Here.

16 MR. MULLALLY: Mr. Chairman, I'll just go

17 over a couple of procedural items. We'll begin the day

18 with testimony from the various public officials that

19 have jurisdiction over the proposed applicants, and

20 then we will move to other public officials who have

21 contacted us and expressed their desire to speak. If

22 for some reason we conclude earlier in the morning

23 than anticipated, we'll go ahead and move into the

24 pre-registered testimony this morning to try to get as

25 much of that out of the way before noon as possible.

1 Just for the audience's benefit, we are

2 only going to take forty-five minutes for lunch. If

3 you are up early in the afternoon, you may want to

4 start making plans to find the nearest drive-through

5 restaurant, or something, because we will start back

6 forty-five minutes after we adjourn in the morning.

7 Also, if you did not see your name on the

8 list -- agendas are available in back. If you do not

9 see your name on the pre-registered public testimony

10 list, you need to sign up. If you do see your name on

11 the list, we are handing out speaker cards with your

12 number on it to make sure we can keep track of who is

13 here and who did not show up. With that, Mr. Chairman,

14 we're ready for the first presentation from the City of

15 St. Louis.

16 MR. CHAIRMAN: Thank you.

17 MAYOR FRANCIS SLAY: Good morning. Members

18 of the Gaming Commission, Gaming Commission staff, ladies

19 and gentlemen, I appreciate the opportunity to be here this

20 morning. I'm going to start it off with an

21 introduction. We will have Rodney Crim, who is the

22 director of development for St. Louis Development

23 Corporation, and he'll talk about our process and why

24 Pinnacle. We will have three representatives from the

25 business community downtown to talk about the impact we

1 believe this will have on downtown.

2 I'm real pleased to be talking with you

3 this morning to share with you what we've accomplished

4 since the last time I spoke before this Commission

5 about two years ago. I want to thank you for offering

6 me this time. First, on behalf of the citizens of St.

7 Louis and across the state, I want to tell you that we

8 sincerely appreciate the work that you do to ensure

9 that we can all be proud of the gaming industry in the

10 state. It is well regulated, economically viable, and

11 provides for ongoing related development.

12 In May of 2002, I stood before the

13 Commission and expressed the city's desire for a new

14 quality gaming destination in downtown St. Louis. I

15 stated that we have tens of thousands of people working

16 downtown every day and millions of people who visit

17 downtown as tourists, conventioneers, baseball fans,

18 and hockey fans, all of whom provide a base for further

19 economic growth, activity, and innovation.

20 I said that we already have a unique

21 combination of attractions, the Convention Center,

22 major league sport venues, historic Laclede's Landing,

23 the Gateway Arch, the new Washington Avenue loft

24 district, to make downtown a magnet for tourists

25 throughout the region, across the nation, and even in

1 the world. I said that we are trying to build on that

2 base and make the most of downtown's enormous potential

3 as a center for tourism. I said that we wanted a new

4 quality gaming development that could and should not

5 only contribute to the variety of excellence of

6 downtown attractions, but also make use of the volume

7 of existing downtown activities to generate the level

8 of state and city revenues that such a great location

9 should have.

10 We firmly believe downtown St. Louis

11 Riverfront is the best site in the state for a first

12 rate gaming facility with a hotel, quality restaurants,

13 and other entertainment attractions. We were very

14 pleased to see and report in public presentations that

15 the Gaming Commission shared our desire to make St.

16 Louis a priority. Thanks to you and to a growing

17 interest in downtown, we now have an opportunity to

18 create a destination attraction that will successfully

19 compete with projects, not only in the adjacent State

20 of Illinois, but will also attract people from around

21 the country and around the world.

22 Over the past three years, we have, through

23 teamwork, made a great deal of progress on our mission

24 to make St. Louis a great city again. I am pleased to

25 say that together we have achieved a number of major

1 successes. I am even more pleased to report that

2 attitudes about the City of St. Louis have improved

3 significantly. Businesses and residents alike are

4 encouraged by our progress on a variety of fronts.

5 Washington Avenue, which provides a connection to

6 Laclede's Landing, is now a hot spot with the

7 residential loft development, creative business

8 development, and entertainment for all ages.

9 Significant residential and business development is

10 occurring not only in downtown, but in nearly every

11 neighborhood in the city. Office businesses are

12 renewing their leases and recognizing that downtown is

13 the place to be for energy, workforce diversity,

14 culture, and competitive business advantages. Retail

15 businesses are recognizing that the city is a great

16 market for their products. Thanks to a partnership

17 among St. Louis County, the State of Missouri, and the

18 St. Louis Cardinals, a new four hundred million dollar

19 Cardinals ballpark is under construction. This is a

20 major sign of hope for downtown and for the city.

21 All of this activity makes this a great

22 time to take the steps necessary for a bright future

23 for gaming in the City of St. Louis. I am pleased to

24 report that in response to a request for proposals, we

25 have achieved two quality gaming and related

1 development summations. We established a comprehensive

2 process to determine which of those would be the best

3 solution for the City, recognizing and respecting, of

4 course, that the Gaming Commission has its own process

5 and will make the final decision on which gaming

6 company, if any, gets its license.

7 We took great pains to ensure their

8 process was professional, gathered broad support, and

9 would result in a selection of the proposal that has

10 the best capacity to result in the quality destination

11 that would most benefit the City of St. Louis. In a

12 few minutes, Rodney Crim will talk to you about that

13 process.

14 Through the selection process, we

15 concluded that the Pinnacle Entertainment proposal was

16 clearly our best opportunity for an attractive, quality

17 destination based on our RFP criteria and specifically

18 for these reasons: the Pinnacle development will be a

19 destination that we can be proud of; the quality of

20 the Pinnacle Gaming development will attract other

21 development; the Pinnacle development will be a major

22 investment in downtown; and the Pinnacle development

23 will address our goals of significant city revenues and

24 employment.

25 The Pinnacle selection was unanimous at

1 the selection committee level. The comptroller of the

2 City of St. Louis and the president join with me in

3 unanimously approving this development, and that the

4 Board of Estimate and Apportionment and the Board of

5 Alderman's vote for the proposal was also unanimous.

6 Thus, I can more than safely state that the City of St.

7 Louis government supports this proposal.

8 Further, we have received no indication of

9 opposition to this development from our constituents.

10 We believe that ancillary developers will have the

11 greatest level of interest in a Pinnacle associated

12 development. We believe that the Pinnacle development,

13 Las Vegas influence style, will set a new standard for

14 gaming in St. Louis and in the State of Missouri.

15 In summary, the proposed Pinnacle

16 development includes a large gaming facility, a Four

17 Seasons quality hotel, restaurants, entertainment, and

18 a fifty million dollar direct commitment for luxury,

19 residential, or retail development. It also brings a

20 product that is not currently available in the St.

21 Louis market or in the State of Missouri. The quality

22 of the gaming facility will compete with the best of

23 the country and the luxury hotel will attract the type

24 of gamer new to the Missouri landscape, and the

25 addition of a Four Seasons hotel will attract meeting

1 and business travel that St. Louis is now losing to

2 other cities.

3 Finally, the Pinnacle proposal includes a

4 variety of public works that will significantly improve

5 the physical relationship between Laclede's Landing and

6 our Convention Center and the rest of downtown.

7 Businesses already located in Laclede's Landing are

8 excited about the Pinnacle proposal. They believe, as

9 do we, that the two hundred and fifty-seven million

10 dollar Pinnacle project will spark other development in

11 the riverfront area.

12 Pinnacle is eager to work with other

13 developers to ensure that their investment has good

14 neighbors, and that the value of their investment rises

15 with improvement in the area. Pinnacle Entertainment

16 has already made a great deal of progress turning their

17 proposal into reality in the hopes that this Commission

18 will agree with the City of St. Louis that theirs is the

19 best proposal and makes our mutual goals reality.

20 The company has already acquired the land.

21 The company is well along its negotiation process with

22 the Four Seasons, and is committed to delivering a Four

23 Seasons quality, luxury hotel. The company has agreed

24 to invest fifty million dollars in luxury residential

25 or retail development, and the company has committed to

1 comply with the mayor's executive order objectives for

2 twenty-five percent already participating and five

3 percent women business participation.

4 As Rodney Crim will tell you again in a

5 minute, we have a couple of requests for the

6 Commission, in addition, of course, to asking that you

7 select the Laclede's Landing Pinnacle proposal for

8 licensing investigation. The first request we make

9 along with Pinnacle. This request is that the

10 Commission pass a resolution expressing its intention

11 to refrain from issuing any additional gaming licenses

12 within the twenty-five mile radius of the City of St.

13 Louis limits for a period of seven years after the

14 Pinnacle casino is licensed with the exception of a

15 license for the Pinnacle development in St. Louis

16 County.

17 The second request that we make is with

18 Pinnacle's agreement, and this request is that the

19 Commission refrain from licensing the Pinnacle casino

20 in St. Louis County, if it was chosen to do so, until

21 the casino in St. Louis has been opened and operating

22 for at least one year. The Commission has expressed

23 its desire to see a quality downtown St. Louis facility

24 -- a gaming facility succeed and prosper. The one year

25 lag is, we believe, the minimum necessary to stabilize

1 the downtown casino's customer base before completion

2 from a county casino -- before competition of a county

3 casino grows at base. We also understand that this has

4 been the practice of the Gaming Commission to allow

5 enough time for the casino to get up and running before

6 opening another, and this practice has worked well in

7 the past.

8 It is our understanding that St. Louis

9 County has no problem with this request. With Pinnacle

10 Entertainment and the Missouri Gaming Commission as our

11 partners, we can add a new quality gaming development

12 to the list of reasons why the St. Louis region is a

13 wonderful region and why St. Louis is becoming a great

14 city again.

15 I thank you for giving me this time to

16 speak with you and for your consideration of the

17 Pinnacle proposal. I thank you in particular for your

18 support for the priority of a new, quality gaming

19 development in the City of St. Louis. You are all our

20 valued partners as we take the steps necessary to make

21 this a great city. Rodney Crim will now take you

22 through the process that we used in selecting Pinnacle,

23 and then he will introduce Tom Reeves, Jim Cloar, and

24 Dick Fleming who will make brief remarks in support of

25 the Pinnacle proposal. Once they're finished, we'll be

1 happy to answer any questions that you may have. Thank

2 you.

3 MR. MULLALLY: One announcement. You can

4 tell the mayor is an experienced speaker. For those

5 who follow, this microphone is voice activated and very

6 sensitive. So that people can hear you, please get as

7 close to it as possible.

8 MR. RODNEY CRIM: Thank you, Kevin. Thank you,

9 Mayor. As the mayor said, I will now briefly walk you

10 through our process and reasons for selecting Pinnacle

11 Entertainment. Also, as the mayor said, we know that

12 you have your own process and that the final decision

13 rests with you.

14 In August of 2003, we issued a request for

15 proposals for gaming and related issues of development

16 along the downtown riverfront. Our request indicated

17 our desire for a destination spot for gaming, but also

18 a destination for entertainment, retail with

19 appropriate parking, and residential, as so many other

20 cities along the riverfront are experiencing. We then

21 put together an eight member selection committee with

22 all the key stakeholders operating downtown: the

23 mayor's office, the comptroller's office, president of

24 the Board of Alderman's office, the alderwoman for the

25 area, the Port Authority Board chair, the Land

1 Clearance for Redevelopment Authority Board chair, the

2 Downtown Partnership president who you will hear from

3 shortly, that's Jim Cloar, and myself as the St. Louis