LADY LUCK, DRAINAGE DISTRICT TO COMPLETE PACT NEXT YEAR

SCOTT CITY -- Only some minor wording changes remain to be finalized in an option to place a gambling boat in the Diversion Channel at the northern city limits of Scott City.

Larry Dowdy of Cape Girardeau, executive vice president of the Little River Drainage District, said his board of directors essentially agreed to a contract this week with Lady Luck Gaming Corp. of Las Vegas.

The lawyers for the district and Lady Luck will handle the minor changes, Dowdy said. He expects the final agreement to be signed by Lady Luck officials and his board shortly after the first of the year.

Dowdy said the contract gives Lady Luck a one-year option to place a riverboat and associated docking facilities in the Diversion Channel if the company receives a license from the Missouri Gaming Commission.

Lady Luck is also purchasing the right to show on its application to the gaming commission that the riverboat will be moored on drainage district property, Dowdy said. For that right and the one-year option, Lady Luck will pay the district $50,000.

Lady Luck has said the preferred site for a riverboat in the channel is just northeast of the Nash Road and Interstate 55 interchange. At that point the Diversion Channel is nearly three miles from its junction with the Mississippi River.

After Lady Luck's application is submitted, the gaming commission will decide if the Diversion Channel site meets the law's requirements for being part of the Mississippi River.

Members of the city's gambling committee have said that Corps of Engineers' records indicate the Diversion Channel is considered part of the Mississippi River. Some of that documentation is expected to be submitted by Lady Luck with its application to the gaming commission.

"Only the gaming commission can answer how long it will take to decide whether the site meets the requirements," said Leah Christopher, a Lady Luck spokeswoman who works for the Tretter-Gorman Inc. public relations firm in St. Louis.

"In general, we feel the location will meet the requirements and we wouldn't be making the investments that we'd made to date if we didn't believe that," Christopher said.

Christopher also said this week that she didn't know how long it will take Lady Luck to submit its application to the gaming commission after the contract is signed with the Little River Drainage District.

If Lady Luck receives a gambling license for Scott City, the contract with the district gives the company a five-year lease to moor the riverboat in the Diversion Channel. The contract also gives Lady Luck the right to renew the lease seven times for five-year periods.

Lady Luck will pay the district a base rate of $200,000 per year for the lease. This annual payment, which will be made on a monthly basis, will start six months after construction begins on the docking facilities.

The contract specifies that Lady Luck will pay the $200,000 annually for at least five years. The annual payment is expected to reach $400,000 to $500,000 as the district will receive a percentage of the gambling boat's gross revenues after a base amount has been reached.

"Regardless of how good or bad they'll do, Lady Luck will pay us the $200,000 during the first five years," Dowdy said. "If they do well, the district will receive more than the minimum payment."

Another detail in the contract says Lady Luck will not be able to leave anything in the channel that is detrimental to flood control or drainage if the riverboat is ever moved, Dowdy said.

Lady Luck projects that Scott City will receive about $3 million during the first year of operation. The gambling company has projected that more than 1,100 jobs will be created with its casino complex.