High Stakes Battle: Part Three

By KBJR News 1

November 24, 2011 Updated Nov 24, 2011 at 1:40 AM CST

Duluth, MN (Northland's NewsCenter) - Over the past 25 years the Fond du Luth Casino in downtown Duluth has paid off "big time" for the city.

From paving streets, to pulling the city out of a major disaster with unfunded promises to retired city workers, casino money has made its mark.

A Federal judge's decision on Monday took away that lucrative revenue stream for the city but the partnership has already made a major mark.

From a technology village to a high rise hotel to a theater and arts center, Duluth's old downtown district has undergone dramatic changes over the last 25 years.

The block now inhabited by the Fond du Luth Casino was once home to an empty Sears Building and several adult book stores. The casino replaced them and served as an anchor in the revitalization of the district bringing vitality and jobs.

“There are over 300 employees at Fond Duluth and we try to be a good employer to them by offering good wages and benefits and we really look at how those look combined,” Said Fond Du Lac Band Chairwoman Karen Diver.

In addition to those jobs, through its contractual agreement to support an Indian run casino within the city limits, the city has received some $80M dollars.

Mayor Don Ness says the gaming proceeds have been used through his administration and the Doty administration exclusively for road construction.

But according to figures provided by city administration, less than half of the city's share of gaming proceeds has actually gone to street improvements, including repaying street improvement debt.

While $32,272,407, the largest single payout, has gone to city streets...more than half of the money has gone to a laundry list of spending projects.

$25,409,336 went into the general fund to pay for everything from citywide police and fire protection to funding libraries.

$11,200,000 went to pay off promised, but unfunded, retiree health care costs.

The rest of the city's share was used to pay off the casino parking ramp bonds, programs to combat gambling addiction, citywide capital improvements like replacing roofs on city buildings and to bringing the old Duluth Armory up to building and safety codes.

Funds were also used to improve low income housing, to finance the Heritage Sports Center, the clean and safe program and legal costs associated with the current litigation with the band.

“Both parties were benefiting greatly from the existence of a casino in downtown Duluth,” Said Mayor Ness.

The band stop making payments in 2009 claiming any debt due the city of Duluth has been paid in full.

Tribal Chair Diver says the decision not to share revenue with Duluth will give the band the opportunity to make improvements to the Fond du Luth Casino.

“It needs it; most casino properties do a major upgrade every 20–25 years. So it is past due. We would like to continue and increase employment in the city of Duluth,” Said Chairwoman Diver.

Continued "growth" in employment is one area where the band and the city can find common ground in their efforts to resolve their differences.

“Let's work together to make downtown the arts and entertainment district north of the twin cities and that becomes a draw and then bring those tourism dollars to the casino,” Mayor Ness said.

While a judge has ruled that the band doesn't need to negotiate a new contract with the city for the next 25 years there is still an issue over some $14M owing on the first 25 year contract.

Tribal Chair Karen Diver says that money is still in dispute because she feels it violates the Indian Gaming Regulatory Act.

But the judge's ruling was not retroactive, so that dispute continues and may lead to further court action.

Barbara Reyelts
breyelts@northlandsnewscenter.com