Grand Station, Riverwalk are sold

Published 11:13 am Wednesday, October 24, 2012

Two Vicksburg casinos changed hands officially Tuesday, one by court order and another in the closeout of sale.

A $400,000 bid on Grand Station Casino was approved by U.S. Bankruptcy Judge Neil P. Olack, which completed a six-month Chapter 11 bankruptcy case. The lone bid on the 36,000-square-foot facility on Mulberry Street was M Street Investments Inc., which had owned the casino’s adjacent hotel before a separate deal for that property announced less than a month before the bankruptcy filing.

Also, Churchill Downs Inc. said in a release that it had completed a $141 million acquisition of Riverwalk Casino, first announced Oct. 5. The Louisville, Ky.-based racetrack and casino operator was approved Thursday by the Mississippi Gaming commission to take over the Warrenton Road casino’s business operations.

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Olack’s order shows the new ownership group is led by Jeffrey Parlin, of Texas, who had headed Great Southern Investment Group Inc., overseer of the casino’s hotel when it and Delta Investments and Development bought the complex from Tropicana Entertainment in 2011 for $3.25 million. He also heads up 1311 Inc., formed earlier this month to develop a restaurant and bar at that address on Washington Street. The two developments will be managed independently of one another, said the planned eatery’s owner/manager, Alex Vickers.

The hotel was purchased earlier this year by Kenneth Bickford, also a shareholder in M Street.

Tuesday’s sale includes the casino vessel and 265 games and equipment, consisting of older games from before Delta took over in March 2011.

Bally Gaming, the casino’s most significant creditor, receives more money in the deal than Delta. The gaming systems maker gets $212,040; it had sought $3 million in funds intended for future improvements in a civil action filed before the bankruptcy. Delta also must pay $75,000 of the sale’s proceeds to pay down past due or current property taxes. Any amount of property tax debt exceeding that amount must be paid by M Street, the order said.

Equity Partners CRB, an investment banking firm hired to find a buyer, will collect $28,000, according to part of the order.

Interests in the casino held by the City of Vicksburg — specifically, the lease payments owed the city for 2.95 acres of City Front — were held intact in the order. Terms of a 1993 deal with Harrah’s, the casino’s first owners, call for the city to receive $562,940 annually, plus 1.5 percent of net revenues until Oct. 13, 2033. Payments have slowed in the years since Harrah’s sold the casino in 2003. Delinquencies are said to run in the hundreds of thousands.

Licensing a new casino on the property is subject to approval by the gaming commission.

Harrah’s sold the casino and hotel to Columbia Sussex, which renamed it Horizon. Tropicana Entertainment, which was part of Columbia Sussex, took over the former Horizon’s operations and tried unsuccessfully to sell the casino in 2007.

In 2010, Delta bought the casino for $3.25 million in cash plus liabilities, one of which is the lease with the city.

Reports collected by the gaming commission show Riverwalk with 392 employees, none of which will be lost in the transition, officials with the new and former ownership groups have said.

Built in 2008, the 22-acre Riverwalk site consists of the 25,000-square-foot main gaming hall, a five-story, 80-room hotel and a multifunctional event center overlooking the Mississippi River.

With the transfer of Riverwalk, the Vicksburg property joins a list of assets held by Churchill that includes Churchill Downs Racetrack — home of the Kentucky Derby — the Fair Grounds racetrack in New Orleans and Harlow’s Casino Resort & Hotel in Greenville, among other properties.

The city’s other three casinos are Ameristar, the largest; DiamondJacks, formerly the Isle of Capri; and Rainbow.