INDIANAPOLIS — The Indiana Gaming Commission on Thursday approved the transfer of Majestic Star Casino licenses in Gary to Minnesota-based Wayzata Investment Partners, a private equity firm that’s one of the top creditors in the casino’s 2009 bankruptcy.
The Gaming Commission gave its approval, specifying that Majestic continue its negotiations with the city of Gary to settle a 2005 local development agreement signed by the late Don Barden, Majestic’s founder, and former Mayor Scott King.
Introducing himself to the commission, Wayzata CEO Patrick J. Halloran said he and another Wayzata executive will sit on the five-member new Majestic board of directors as it emerges from bankruptcy.
“We want to get the company out of bankruptcy and improve morale,” Halloran said.
Representing the city of Gary, attorney Michael W. Hile, of Indianapolis, said the city and Majestic were still wrangling over $14 million the city maintains it is owed by Majestic as part of the local development agreement.
The city is continuing to build an access road to the casino, Hile said.
In 2005, Barden stopped making payments to the city because he said the city breached the agreement by failing to construct the access road from Cline Avenue and conduct environmental remediation on the casino property, as promised. Barden sued the city and began withholding payments and placed them in a separate bank account.
Majestic attorney Peter Rusthoven said the casino is keeping the money in an interest-bearing account. He said talks were proceeding and as of this week, “there has been movement on both sides.”
The city might avoid its environmental remediation promise, if legislation moves forward on a land-based casino for the city.
The General Assembly is expected to consider a land-based casino bill for Gary next year and Wayzata could now play a role in the venture. The Legislature declined to hold hearings on the bill last year because Majestic’s ownership was in doubt.
Gary Mayor-elect Karen Freeman-Wilson has said a land-based casino is one of her top priorities to help shore up the city’s revenue base that has shrunk from a budget of $66 million to $33 million by the impact of property tax caps.
Gary’s corporation counsel Susan Severtson said she held an informal meeting with Wayzata officials in which they expressed interest in a land-based venture.