Isle to go with Mississippi company to build Cape casino

Four days before Cape Girardeau voters gave the go-ahead to a $125 million Isle of Capri casino, company executives made a pledge to some 60 local contractors that they would do all they could to employ local building firms.

Now, with the bidding of the first major contract, it appears that the casino company is looking elsewhere for its builder.

Isle has rejected two local bids in favor of a company with headquarters nearly 500 miles away, a key local contractor who bid on the project said Friday.

Phil Penzel of Penzel Construction said he was informed last week that Isle was going with the Roy Anderson Corp., which is based in Gulfport, Miss. Penzel, of Jackson, and Kiefner Bros. of Cape Girardeau were two of the three finalists for the high-dollar contract along with Anderson. Anderson is partnering with St. Louis-based S.M. Wilson General Contractors.

"I'd be lying if I said it didn't disappoint me," Penzel said.

Dick Meister, Isle of Capri's vice president of construction and design, and a company spokeswoman did not return repeated calls Thursday and Friday seeking comment.

Meister and other executives have repeatedly said they were committed to using local contractors as much as possible. The subcontract work could still constitute as much as 80 percent local employees, Penzel estimated, but added that there's no way to be sure how much it will turn out to be. Isle pledged to use local contractors "multiple times," said Penzel, whose company spent $50,000 to prepare its bid.

The contract, which he would only say was somewhere between $50 million and $100 million, would have been the largest in his time at the 100-year-old company, Penzel said. Penzel was told that Isle went with Roy Anderson because "at the eleventh hour" the company came up with a way to shave two months off the construction schedule, he said.

"I think something could have changed," Penzel said. "But I will tell you that our team, putting it in terms of a basketball game, we left everything out on the court."

Mayor Harry Rediger said he had not heard anything official from Isle about a contract being awarded. When he asked company executives Thursday, he said, they told him an announcement was forthcoming but that they did not want to make it at the same time that their quarterly earnings report came out. The report shows that Isle's net income more than doubled from the previous year to $10.9 million for the three months that ended April 24.

"But I know they are committed to using as much local as they can and they've proven that," Rediger said. "Everything they've done so far has been local."

Even if Isle has opted to hire outside the area, Rediger said, it may come down to what's best financially for a publicly traded company that has to answer to its stockholders.

"That's the whole purpose of the bid process," he said. "I understand and everybody has to understand they have a budget. They have to marry the right contractor with the right project. That's what they're doing, and you can't argue with that."

Area economic developers said their position hasn't changed and that they remain optimistic much of the workforce to build the casino will be hired locally.

"If the general contractor isn't local, we sure hope whatever contractor they use will use an awful lot of subcontractors from here," said John Mehner, CEO of the Cape Girardeau Area Chamber of Commerce. "Our position remains the same -- use as many local contractors as possible."

Mitch Robinson, the director of Cape Girardeau Area Magnet, said Isle's intention all along was to pick the best company that can provide a quality product within a certain time frame.

"Based on what's been said, I think the time issue became a major decision point for the company," he said. "That seemed to be the tipping point in this one company's favor. ... I think it's unfortunate, but the company made a decision and went with another choice."

Still, Robinson said, he has no doubt that local laborers will be involved in the casino's construction.

Like the other two bidders, Penzel said he had a partnership with another company as part of the bid. For Penzel, it was McCarthy Building Cos., which is based in California but has operations in St Louis. McCarthy has built $1 billion worth of casinos, Penzel said. Penzel's company also built Casino Aztar in Caruthersville, Mo., and did the renovations when that casino was bought by Isle.

Anderson, too, has also worked with Isle before.

"We figured the company that had been around the block a little bit would probably be the last one standing," Penzel said. "I guess I understand it. But that doesn't make it any easier to swallow."

smoyers@semissourian.com

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Pertinent address:

Gulfport, MS