By DERRICK GINGERY, Greater Fort Wayne Business Weekly
A local company that calls itself Summit City Grand Resort and Casino Holdings Corp. is showing a concept around Fort Wayne that would create a water park, casino, Imax theater, hotel and retail and office space on OmniSource's old North River property.
But the plans of the publicly traded company, which was created through the purchase of an unrelated business, Exit Only Inc., aren't all that they appear to be, according to other sources.
Summit City Grand's business plan for the project, estimated to cost $162.7 million, is available online for inspection by the public and potential investors. It indicates an agreement has been obtained in principal to acquire the property north of downtown.
But one of the owners of the property, Daniel Rifkin, said he has not spoken to representatives of Summit City Grand in months. No definitive agreement was in place, as the business plan indicated, after that last conversation, he said.
Fort Wayne's development director also has yet to receive any plans for review.
Legacy Lending, which specializes in brokering and consulting on commercial mortgages, is the Fort Wayne firm providing the financing package for the project. President Ryan Goldacker said the company is in the beginning stages of the fundraising effort, and the proposal is moving forward despite the depressed economy and tight credit markets.
He said the nearly $600 million Summit City Grand projected it would need would be much less if a casino were not included in the project.
But for now, the controversial casino proposal remains in the plan even though Mayor Tom Henry has offered no public support for the construction of a casino, no citywide referendum on gambling has been held or scheduled as Henry said he would require before making a decision and the Indiana Legislature did not act to establish a gaming license for such a facility in Fort Wayne.
Media reports of a recent meeting between Wells Street business owners and Summit City Grand executives renewed discussion of the proposal. City Community Development Director John Urbahns said Summit City Grand representatives have talked with him a couple times about it - most recently in early June - but the development has not progressed beyond the concept stage.
"I have never seen anything on paper like a plan," Urbahns said.
Summit City Grand's plans on its Web site, www.summitcityholdingscorp.com, include a cost estimate for each of the six pieces of the development. Among the elements are:
• A casino with a 42,000-square-foot gaming floor, smoking area, bar, spa, poker room, keno and high-stakes gaming areas, at $26.8 million;
• A partially enclosed water park with a capacity for 550 people that also includes a bar, snack area and locker room, at $56.4 million;
• A hotel with 126 rooms, four penthouses and 20 suites that also would have a restaurant, buffet, coffee shop, arcade, night club, meeting room and gardens, at $28.3 million;
• A 3,000-seat theater for live performances, at $28.9 million;
• An Imax theater with 242 seats, $13.9 million; and
• A 50,000 square-foot retail space and 15,000-square-foot office space, as well as parking for all venues, at $8.5 million.
Summit City Grand said its development would generate more than 1,500 jobs and $15 million to $20 million in yearly tax revenue for the city. In the business plan, about $443.4 million would go toward construction costs, equipment purchases, state licensing fees and operating costs for the first year. After Year 3 of operations, Summit City Grand expects to have spent $583.4 million.
Annual revenue was projected at $367 million the first year of operations, $369 million in Year 2 and $422 million in Year 3, the company said.
Nathan Stephens, marketing director for Summit City Grand, said company officials are no longer talking to the press. He said all public communications would come through press releases on the MarketWire service. Todd Smith, president of Summit City Grand, did not return a call seeking comment.
Much of the project reflects what a city committee decided in 2007 would be the ideal use for the North River property. A regional attraction - perhaps a water park - was suggested, surrounded by retail space, townhouses and a river landing.
The city of Fort Wayne bought an option to purchase the property and through 2007 and most of 2008 negotiated with the Rifkin family, the property's owners and former owners of OmniSource, to purchase the parcel and hold it for future private development.
The city abandoned those talks and Urbahns said there have been no recent discussions with the Rifkins about the property.
Summit City Grand's business plan notes that environmental studies support the site's use as a resort and casino and claims its representatives have "secured utilization" of the property in principal.
"That sounds to me a lot more definitive than I would characterize it," said Daniel Rifkin, one of the family members marketing the property.
Rifkin said he was approached by the group initially and asked to become an investor in the project. When he refused, the group asked him if he would sell the property, which he said he would.
"It's been several months since the discussion," Rifkin said. "I'd hardly characterize it as an agreement of any type."
Rifkin said marketing the property has been difficult because of the down economy. There has been little interest and no one has approached him to negotiate a purchase agreement or option since the city's option expired.
"They (Summit City Grand) have no more agreement than anybody else that says they're interested in the property," Rifkin said. "A lot of people called and said they were interested. No one followed through."
Stephens and Smith also work for Piere's Entertainment Center, a popular night club and concert venue in Fort Wayne. Summit City Grand CEO H.S. Liddell, Piere's owner, is part owner of the Sosua Bay Grand Casino and Resort and Hotel Villa Chessa in the Dominican Republic, according to the Summit City Grand Web site.
Summit City Grand has not named a chief operations officer or chief financial officer, according to the Web site.
The company announced in November it would merge with Santa Monica, Calif.-based Exit Only. The stock is traded on the pink sheets, meaning it is not listed on a major exchange like the New York Stock Exchange or Nasdaq. On July 28, the stock, which is still trading under Exit Only's ticker symbol, EXTO, closed at 1.6 cents per share.
There were about 240.9 million shares outstanding at the end of 2008, according to Exit Only's annual report, submitted in February. That would place the company's total market capitalization, an indicator of the its value, at $3.85 million.
In the last year, the stock has traded as low as four-hundredths of 1 cent per share and as high as 5 cents per share.
Goldacker said the company is looking for nontraditional monetary sources, like private investors and sovereign funds, to finance the project. He said so far there have been verbal conversations with potential investors, and he is hoping a deal could be completed by the end of the year.
"We're still finalizing the package," he said. "Projects like this are still being funded every day in the U.S."
Goldacker is working with two others, including a New Jersey-based financier, to find project funding. Even in one of the worst recessions on record, where loans for any project remain difficult to find, Goldacker said money is available.
"Believe it or not, there still are wealthy people in this country and world that feel very comfortable investing in a project like this," Goldacker said.