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1 BEFORE THE MISSOURI GAMING COMMISSION

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5 June 29, 2005

Missouri Gaming Commission

6 3417 Knipp

Jefferson City, Missouri

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COMMISSION MEMBERS: Floyd O. Bartch, Chairman

9 Ralph Biele, Member

Judith Sutter-Hinrichs, Member

10 Darryl T. Jones, Member

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REPORTED BY:

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JENNIFER L. LEIBACH, RPR, CCR(T)

17 MIDWEST LITIGATION SERVICES

714 West High Street

18 JEFFERSON CITY, MISSOURI 65101

(573) 636-7551

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1 PROCEEDINGS

2 CHAIRMAN BARTCH: Would you call the roll?

3 MS. ANGIE FRANKS: Chairman Bartch?

4 CHAIRMAN BARTCH: Present.

5 MS. FRANKS: Commissioner Hinrichs?

6 COMMISSIONER HINRICHS: Present.

7 MS. FRANKS: Commissioner Hartsfield?

8 (No response.)

9 MS. FRANKS: Commissioner Biele?

10 COMMISSIONER BIELE: Present.

11 MS. FRANKS: And Commissioner Jones?

12 COMMISSIONER JONES: Present.

13 MR. KEVIN MULLALLY: Mr. Chairman, I believe the

14 first item on the agenda is a matter for the Commissioners to

15 decide.

16 CHAIRMAN BARTCH: What happened concerning

17 this -- there was a request by the Missouri State

18 Governmental Review Commission to all parts of the state

19 government to answer certain questions as far as their

20 organizational structure and so forth. In doing that, the

21 Department of Public Safety made some comments in there

22 that gave us pause as to what should be done with the

23 Missouri Gaming Commission and what should not.

24 You need to understand that the way the state

25 law is written, we are under the Missouri Gaming Commission;

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1 however, or we're not -- excuse me. I said

2 that wrong. The Missouri Gaming Commission is under the

3 Department of Public Safety in the organizational structure,

4 but they have no responsibility for us, nor do they have any

5 say so as to what is done. And that is according to state

6 law. The comment was made that perhaps the Missouri Gaming

7 Commission was under the Department of Public Safety in a

8 technical sense, should have some responsibility to report

9 what we're doing, where things are going, and so forth. And

10 we, quite frankly, disagreed with that.

11 There was a meeting in Kansas City of this

12 review commission. Myself and Ralph attended that meeting,

13 and we told them that, really, that that was a bad idea, that

14 the Missouri Gaming Commission is an independent commission,

15 and that it should stay that, and all the reasons why that

16 should be. They took that under advisement. They asked some

17 questions. I wouldn't venture to say that they have

18 agreed one way or another, but they listened to us very

19 closely, and they understand our point of view.

20 I believe that we are on very solid

21 ground, that we are an independent commission, and there's

22 all kinds of reasons why that's exactly the way it should be.

23 That's what state law says, and we feel like that it should

24 stay -- without any question, it should stay the same way.

25 The staff, in view of the meeting that me and Ralph were at,

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1 has prepared a resolution that talks about that entire

2 problem. And what it really does is it reaffirms what

3 I just said, that we're an independent commission, why we

4 are, and that we should stay the same way.

5 If the Commissioners would look at that and

6 review it, whether it's your wish to pass this resolution, I

7 will leave that up to you.

8 COMMISSIONER BIELE: Has everyone had a chance

9 to look at it? If so, I recommend approval of Resolution No.

10 05-051.

11 COMMISSIONER HINRICHS: Second.

12 CHAIRMAN BARTCH: Is there any other

13 discussion? If not, would you please call the roll?

14 MS. FRANKS: Chairman Bartch?

15 CHAIRMAN BARTCH: Approved.

16 MS. FRANKS: Commissioner Hinrichs?

17 COMMISSIONER HINRICHS: Approved.

18 MS. FRANKS: Commissioner Biele.

19 COMMISSIONER BIELE: Approved.

20 MS. FRANKS: Commissioner Jones.

21 COMMISSIONER JONES: Approved.

22 MS. FRANKS: By your vote, you've adopted

23 Resolution No. 05-051.

24 MR. MULLALLY: All right. Thank you,

25 Mr. Chairman. I guess we probably should mention, just for

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1 the sake of curiosity sake, that Commissioner Hartsfield is

2 not AWOL. He is on a long-planned vacation that could not be

3 rescheduled because it's in Spain, and I'm sure he is

4 enjoying himself, and along with his wife, pretty much right

5 now.

6 COMMISSIONER HINRICHS: We should have met

7 there.

8 MR. MULLALLY: Mr. Chairman, the next item on

9 the agenda is an update by Casino One Corporation on their

10 projects -- proposed projects in the city of St. Louis and

11 St. Louis County. There are a number of people from Casino

12 One here today and I think several of them will speak, but

13 Jerry Riffel will play ringmaster and come forward and make

14 the opening statements for Casino One.

15 MR. JERRY RIFFEL: Mr. Chairman, Commissioners. My

16 name is Jerry Riffel, Lathrop & Gage, representing Casino One

17 Corporation. We have some handouts to begin with for the

18 Commission, if that would be okay, Mr. Chairman.

19 The first one is a fairly detailed outline of

20 the status of the county road progress. There are -- it's a

21 very complicated development process, so there are a number

22 of different sections of that, which we will go through.

23 The second thing is a series of renderings on

24 the city project. And then I have a letter from the Air

25 Force offering the defense mapping site up as surplus

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1 property for acquisition. And I have a response dated

2 June 28, 2005, to the General Services Administration from

3 the St. Louis County Economic Council responding in the

4 favorable to that Notice and Request.

5 And what I would propose to do, we have

6 another -- a number of proprietary issues respecting an

7 alternate road route in terms of property acquisition,

8 Mr. Chairman, and we also have some proprietary issues on

9 franchises, leases, business opportunities, and an item in

10 the development agreement between LCRA, the city of

11 St. Louis, and Pinnacle Entertainment that we would

12 respectfully request we go into executive session so that we

13 can discuss those items to begin this hearing.

14 CHAIRMAN BARTCH: How long will that take, do

15 you think?

16 MR. RIFFEL: About ten minutes.

17 CHAIRMAN BARTCH: You know, as long as we can

18 hold it to a reasonable time, I don't have any problem with

19 that. If not, will somebody make a motion to close, if

20 you're in agreement?

21 COMMISSIONER HINRICHS: I move to close this

22 meeting to receive, discuss and consider the following

23 matters: Proprietary Records, Information, and Summaries

24 under 610.021(14) and 313.847.1 RSMo.

25 COMMISSIONER JONES: Second.

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1 CHAIRMAN BARTCH: Further discussion? If not,

2 please call roll.

3 MS. FRANKS: Chairman Bartch.

4 CHAIRMAN BARTCH: Approved.

5 MS. FRANKS: Commissioner Hinrichs.

6 COMMISSIONER HINRICHS: Approve.

7 MS. FRANKS: Commissioner Biele.

8 COMMISSIONER BIELE: Approve.

9 MS. FRANKS: Commissioner Jones.

10 COMMISSIONER JONES: Approve.

11 CHAIRMAN BARTCH: I apologize, we'll be back

12 as soon as we can.

13 (A BREAK WAS HELD.)

14 CHAIRMAN BARTCH: Call us back to order.

15 Jerry?

16 MR. RIFFEL: Yes, sir. Jerry Riffel again.

17 Now, we're going to give an update of what we call the

18 primary or the preferred access route. This is the

19 Mississippi River. Again, this is the defense mapping site.

20 This is Lemay Park, and I-55 is up here. Okay. So there's

21 Alabama, and there's Lemay Ferry Road.

22 So the preferred route, which has been

23 selected through a process that's been led by the Economic

24 Council of St. Louis County -- and they'll speak to this in a

25 moment -- is this route. And in our mind, there are two very

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1 definite segments to get this built and to define an approach

2 to the resolution requirement that we have all permits done

3 by September 1st, we have to break it down that way.

4 And there are, really, at the end of our

5 analysis, two sets of the most basic issues, and one relates

6 to Lemay Park, which is all in green, and the other relates

7 to this surplus property owned by the Air Force called the

8 defense mapping site, which is all between Broadway and the

9 casino site. As you can see, we encroach upon the northerly

10 piece right through here of Lemay Park.

11 These properties are restricted. To do the

12 preferred access road, there are five different major

13 entities you have to work with, so there is MSD, the

14 Metropolitan Sewer District, the Metropolitan Sewer District

15 owns, believe it or not, in fee simple interest, the Des

16 Peres River, which is right here, which was acquired in

17 1920's and 1930's through the city through eminent domain and

18 fee simple interest, then upon creation of the Metropolitan

19 Sewer District, was transferred to the MSD and accepted in

20 their original charter in fee simple.

21 That's a very important, lucky for us, event

22 because that means that they can transfer a road easement.

23 They're not limited to the purposes of the utility, drainage,

24 et cetera, to us, in that fee simple interest area, which is

25 the Des Peres River right-of-way. So if we build the

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1 preferred route, we will need easement interest from MSD.

2 That's a given.

3 Secondly, a large part of the preferred route

4 is where? It's in the city of St. Louis. And a lot of

5 people think the boundary is the Des Peres River. It isn't.

6 It's -- the boundary is the center of the old Des Peres

7 River, which the city moved after they acquired this in fee

8 simple interest. So the defense mapping site, for example,

9 if you see this line, you'll see that at least half of the

10 defense mapping site is within the city limits of the city of

11 St. Louis.

12 And again, you see that a large part, all but

13 this little corner, and right here, is in the city, clear up

14 to Lemay Ferry Road. So the city of St. Louis owns a portion

15 of Lemay Park, the 15 parcels that we would need to have the

16 road easement over. The county itself actually only owns

17 four parcels that we will need an easement interest in, so

18 much less. So the SEMA, FEMA issues are our most difficult

19 regulatory problem. We have dealt with that significantly.

20 We have researched, in detail, the FEMA

21 issues. We believe, based on that research, that the

22 community block grant funding was used for the acquisition

23 of all -- not all of the parcels. Many of these parcels back

24 here were FEMA funded, but we believe it was used for all the

25 key parcels we have an interest in. We have developed that

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1 evidence. We've discussed that with SEMA. We have discussed

2 that with the Department of Housing and Urban Development.

3 We believe, based upon our discussions with

4 the Department of Housing and Urban Development, we have a

5 very good chance of not getting rid of those restrictions,

6 but getting a modification of those to permit this limited

7 construction of this roadway in this area. So that's where

8 we are on that. Okay. So who else do we need -- who else's

9 cooperation do we need to build a roadway and how are we

10 going to get that by September 1st?

11 And this is how it works: We've stated MSD,

12 the city of St. Louis, the county of St. Louis, the Port

13 Authority of St. Louis County, which owns the site, as you

14 know, and is leasing the site to us, and then the city of St.

15 Louis has an agency we call LRA, which takes title to tax

16 foreclosed properties and acts as an agent to hold title for

17 the city of St. Louis, and it owns two parcels.

18 So what we have done is we've worked with the

19 county counselor and we've written an intergovernmental or

20 cooperative agreement. And all of these parties, all of

21 these local governmental entities are parties to this

22 agreement. It's been introduced to the county council.

23 We are working with the city attorney, the city mayor's

24 office and others at the city, Councilman Villa, whose ward

25 is affected by the road, for example, in getting introduction

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1 of an ordinance to approve this intergovernmental agreement

2 with the city.

3 It's been approved -- introduced and approved

4 by the Port Authority. It's been introduced at MSD. It's

5 been discussed in some detail at one MSD meeting. It will

6 again be considered for approval on July the 14th. So that,

7 we believe, assuming that things go well at the city and

8 there are some pieces of the contract that are not completed

9 at the city that we will, before September 1st, have the

10 intergovernmental approve -- intergovernmental agreement

11 approved by all of these parties.

12 And what it does is this: a) All of the

13 parties agree to convey interest in the real property

14 as-needed for the preferred route; b) The permitting process,

15 the timelines for the permitting process are set. The county

16 will take the lead on permitting both in the city and county;

17 3) [sic] There are four parcels that are privately owned.

18 The city will -- this is kind of tricky, but the city will

19 appoint or agree that the county will be the city's agent in

20 the city limits for purposes of exercising power of eminent

21 domain of the city, not the county, in the city limits.

22 It also states that Pinnacle will contract and

23 will pay for, subject to a couple of conditions in the lease

24 agreement with the Port Authority -- just a couple -- that

25 they will act as developer working with the county and that

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1 the county and Pinnacle will take the lead in building the

2 road. And then it also states that the city will grant a

3 road easement on their properties, LRA will grant a road

4 easement, the city-related agency. It also states that.

5 And then it finally states that the county

6 will maintain the completed road, and that any of the surplus

7 properties now in Lemay Park, which is now administered as

8 the county park, will remain with the county and the county

9 will own that property within the city and administer it on a

10 park basis. And then finally, if the county should ever

11 change its mind and not have Lemay Park located there, all

12 that property in the park would revert to the city.

13 So every element -- every important element of

14 getting this designed and constructed is controlled by this

15 document, except two, and Denny Coleman will speak to one of

16 those in a moment. One is what I've already spoken about,

17 the FEMA regulation. We have to have an approval permitting

18 the construction of the road, too; and secondly, the

19 acquisition of the defense mapping site. All the other

20 important issues are controlled to that intergovernmental

21 agreement, which we believe will have in place by September

22 1st.

23 One final thing. On the preferred route, the

24 surveying on that route is finished. We have given

25 conceptual plans to the railroad for the railroad overhead

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1 viaduct, over Union Pacific at this location. Their

2 attorneys have provided us their usual form of agreement.

3 The conceptual plans have been reviewed by the county and by

4 the UP.

5 Right after the first, we'll be giving them

6 30 percent design plans, and we'll expect, before

7 September 1st, that the UP will have given us an approval of

8 that 30 percent design plans. We believe that the

9 engineering team, David Mason's firm and Horner & Shiffrin,

10 will have completed design plans and specifications by

11 August 1st. They have committed to do that. And those will

12 be provided to the county at that time for review for

13 purposes of permitting. So now, Mr. Chairman, I would like

14 to ask Denny Coleman, if that's all right, to come up.

15 CHAIRMAN BARTCH: Absolutely.

16 MR. RIFFEL: And he will speak to several

17 other issues. Denny.

18 MR. DENNY COLEMAN: Mr. Chairman and Commissioners.

19 Thank you for the opportunity to spend a few minutes with you

20 this morning, updating you on the activities we've been

21 involved with regarding this process, and particularly the

22 Pinnacle road.

23 I'm really here to give you three very quick

24 items: Updates on where we are relative to the economic

25 development component of what we hope to do not just with the

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1 Pinnacle deal, but with the resources we would receive from

2 the Pinnacle deal. Secondly, talk about some of the

3 activities of our road committee, and particularly as it

4 relates to the county permitting system. And finally, talk a

5 little bit about the defense mapping site, as Jerry alluded

6 to, relative to that component piece of the road that is very

7 critical.

8 The economic development component piece,

9 which is very important to us as I know it is to you, has

10 been moving forward. We have not waited for the ultimate --

11 the construction to begin. As you know, our redevelopment

12 agreement called for the placement of two and a half million

13 dollars of sort of prepaid rent into an escrow account.

14 Pinnacle did do that immediately after your approval of its

15 docking proposal, and so that is in place. We can't touch

16 that yet, but it's in the account.

17 What we have been doing in the interim is

18 working on a comprehensive plan for Lemay community that our

19 planning department has engaged in that deals with housing

20 and infrastructure and so on. What we have done specifically

21 through the economic council is to work on a market

22 feasibility for the plan; in other words, the key economic

23 development areas. And I'll go over to the map here, if you

24 don't mind, and just point out a couple of those areas that

25 we've concentrated on.

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1 I'm sorry about the orientation of this. This

2 is the only map I've ever seen that up is northeast, but

3 that's the way it is. Our consultants, ERA Associates, have

4 done this. We raised some money from a regional foundation

5 to pay for this component piece of the master plan of Lemay.

6 This, again, is the Mississippi River, River Des Peres, and

7 this, of course, is the preferred route of the road into the

8 casino site.

9 What we have here are designations called

10 revitalization areas. Revitalization areas one, two, three,

11 and four. It doesn't necessarily mean prioritization of

12 numbers, but just to designate the different areas.

13 Revitalization Area 1 is what the consultants feel could sort

14 of be the new mini downtown for the Lemay community. It's

15 the only corner at the intersection of Bayless and Lemay

16 Ferry Road that does not have some kind of new development.

17 The older, more obsolete kinds of structures, they feel

18 there's enough traffic here to truly support new retail

19 development.

20 RDA-II is a larger area in which they feel

21 they can provide new housing development. There's some very

22 scattered sites in here that are already vacant. There's

23 some very much older housing in -- this particular area is in

24 close proximity to the Notre Dame High School and School

25 Sisters of Notre Dame Mother House. This also could be the

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1 area that we would look to build some of the athletic fields

2 that are also a part of Pinnacle's proposal that they must

3 help us fund. And also the new community center, which

4 according to this plan, will be located immediately

5 continuous to the Lemay Childcare Development Center, which

6 is a very well-used facility in the Lemay community. So

7 we're very excited about this piece here.

8 RDA-III is around an old quarry. And what the

9 plan calls for is the acquisition of this old quarry, which

10 is partially filled with water already, and use it as an

11 outdoor recreational-type facility. It could be fishing,

12 could be swimming, could be a nature area, what have you, and

13 then to build some new housing along the edge of that quarry,

14 which would be a very attractive feature.

15 And finally, in terms of priority areas, the

16 area immediately up from the new road, which would be on

17 Lemay Ferry Road, which contains our new small business

18 incubator but has a very scattered type of development of

19 very low end, sort of retail establishments, that we would

20 either purchase or try to improve along this site.

21 We also have areas such as the Stuff Brothers

22 site, which is an old manufacturing -- bridge manufacturing

23 site, which is now under control of another developer that

24 we're working with to redevelop this site. There's a retail

25 development looking at this site at Weber and 55, all in

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1 anticipation, obviously, of the road and the casino

2 development, and the people that would be attracted to the

3 area.

4 So we're very pleased with the progress of

5 this -- the status of this plan is such that it has been

6 reviewed by several different constituent groups in the area

7 of Lemay, the chamber, the citizen's groups, and so on.

8 Charlie Dooley has been down here to help present this and

9 get feedback from the community, so it isn't finalized yet

10 but it will go formally before the St. Louis County Planning

11 Commission in the near future for adoption by the Planning

12 Commission.

13 So we've been moving forward with our efforts

14 as to ways that the Pinnacle rental payments to the

15 Port Authority would be invested in the implementation of

16 this plan. And we're very pleased with the progress here,

17 and with the participation of the Lemay community.

18 The second point I want to talk about is the

19 road committee. Immediately after your Commission meeting in

20 terms of designating Pinnacle for this site last September,

21 County Executive Charlie Dooley appointed a road committee

22 and asked me to chair that. And the importance of that is

23 every county department that has anything to say with this

24 access road was represented on this committee, either by its

25 director or by its director's designee, and was given the

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1 charge by the County Executive to not just act in a typical

2 regulatory way, but to work proactively with Pinnacle's

3 engineers and consultants to see that this project got done

4 and approved in a timely fashion. That has proven to be very

5 successful.

6 We have had -- we have met monthly starting in

7 September of last year through today. We -- our own economic

8 council and port authority staff, the parks department, the

9 highway department, the public works department, and the

10 planning department have all been involved as well as

11 Pinnacle representatives and their consultants and

12 contractors as well as a number of the Gaming Commission

13 staff. Mr. Mullally's staff has been present at all those

14 meetings as well. And the Lemay community has had a

15 representative at all those meetings. So we have kept

16 everyone informed as we progress with these various issues.

17 Now, I'm pleased to say that based upon the

18 progress that Pinnacle's engineers have made to date, the

19 highway department, I believe, has issued a letter that you

20 may have seen already, saying that they do anticipate being

21 able to issue a permit by September 1st based upon the

22 documentation and their working relationship with the

23 engineers. Now, they haven't received the full package, but

24 because they've been working with the engineers all along, by

25 the time they do get that, within the next month, they

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1 believe the review process should be able to move forward

2 pretty quickly, and the permit should be issued by September

3 1st.

4 Finally, I'll talk a little bit more about the

5 NIMA site. I'm sorry, there is a couple of different names

6 by which this site is known: NIMA, National Imaging and

7 Mapping Agency, the defense mapping agency, and there's a new

8 one here I'll mention to you in a minute. But what we have

9 concentrated on here is in direct conversations with all of

10 the federal and state agencies that are involved

11 in this process.

12 It is the Air Force, obviously, as the owner,

13 it is the GSA as the owner's agent in the disposition

14 process. It is the Environmental Protection Agency, since

15 they have some issues relating to environmental -- potential

16 environment contamination on the site as well as Missouri

17 Department of Natural Resources. We began our meetings last