TIE VOTE WOULD COST CITY

Cape Girardeau could stand to lose more than $2 million annually in local revenue if a majority of city council members are unable to decide which riverboat casino operator ought to be allowed to operate in the city.

With Councilman David Limbaugh already declaring that he will abstain from voting on the issue, the seven-member council could face a deadlock on March 7. That's the date it's set to choose between riverboat gambling proposals by Boyd Gaming Corp. and Lady Luck Gaming Corp.

In a memorandum to council members this week, City Manager J. Ronald Fischer indicated his hope that the council will reach a consensus on the matter.

Fischer said the Missouri Gaming Commission could issue a license to either company -- or any other company interested in operating in Cape Girardeau -- if the council fails to adopt a resolution in support of either Boyd's or Lady Luck's proposal.

"If that occurs, there would be no guarantees with respect to the type and extent of any land-side development, hours of operation, revenues to be paid to the city or any other matter relating to the gaming operation," Fischer said.

The city charter stipulates that at least four council members must approve a measure for its passage. Abstentions are recorded with the majority of members voting, unless a council member abstains due to a personal financial interest in the matter before the council.

Limbaugh, a Cape Girardeau attorney, said Friday that although he has no personal financial interest in the matter, one of his law partners has been paid for work he's done for Boyd Gaming.

"Honestly I don't know if it's a personal financial interest, but it could certainly be construed that way," Limbaugh said. "(The conflict) has to be financial."

Fischer said that if Limbaugh's abstention results in a tie, the council might want to revote until a consensus is reached.

City Attorney Warren Wells said failure to make an endorsement would discard the city's "bargaining tool" with Boyd Gaming and Lady Luck.

"What cities have as a bargaining tool for getting added incentives from the gaming companies is the power to negotiate in exchange for the city's recommendation," Wells aid. "If for some reason the council is not able to reach a decision to recommend one group or the other, the competition for the gaming license would take place before the gaming commission, where the city's interests would not be represented."

Missouri law requires that $1 of each admission on a riverboat casino be earmarked for the local government, along with 10 percent of the tax levied by the state on the adjusted gross receipts of a gaming operator.

But throughout the state, gaming operators have offered additional financial incentives to the home dock city in order to secure the city's endorsement. In Cape Girardeau, those incentives total more than $2 million annually with either company.

Fischer said the city's endorsement is crucial to securing those added incentives.

"We assume that, all other things being equal, the Missouri Gaming Commission will give a significant amount of deference to the proposal favored by the council," he said in his memo. "The purpose of those additional incentives presumably is to persuade the council to select one of the proposals by adopting a resolution in support of that proposal."

But as Wells said, neither Boyd nor Lady Luck would be held to their proposals when applying to the gaming commission without a city endorsement.

"There also would be a question as to who is going to bear the cost of infrastructure improvements," Wells said. "This is the city's only chance to have a real say as to who's going to be selected and nature of what the development's going to be."

Ken Hoelker, an investigator for the Missouri Gaming Commission, said if all things are equal between riverboat operators, the city's endorsement likely would strongly influence the commission's choice.

He said that without a city recommendation, the gaming commission would not address incentives that might have been included with a proposal in an effort to garner the city's endorsement.

"That really wouldn't have anything to do with the commission," Hoelker said. "We would only consider the proposal they submitted when they applied with the state."

Wells said that means the city's interests, which have been addressed in both Lady Luck's and Boyd Gaming's proposals, would fall by the wayside.

"There would be no good reason for the gaming commission to ensure that either gaming company abide by their original proposal," he said. "If the city doesn't make a recommendation, they're going to look at the state's interests first."