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Kelly Stutes is a homemaker, mother of two, and, lately, a political activist. She’s partly responsible for the “No New Casino” signs popping up around Baton Rouge over the past several months. Stutes doesn’t have an estimate of how many people have joined her anti-Pinnacle movement, but says her e-mail list numbers about 1,500 parish-wide and says about 1,500 signs were distributed just over a two-week period in January.

“I’m doing everything I can,” she says. “Whether this will have an effect on the election [Feb. 9], I have no idea.”

The reasons for the opposition vary widely; in her case, it’s mostly about location. She moved to the Spring Lake subdivision near River Road more than five years ago, and likes to take her 2- and 5-year-olds sliding on a piece of cardboard down the levee near where Pinnacle wants to build Baton Rouge’s third casino.

“I would love to see them downtown,” Stutes says. “We’re not against gaming, but I do feel there’s a more appropriate place they could be.” She would also like for her mayor to take a stand one way or the other. Mayor-President Kip Holden did not return two phone calls to his office seeking comment.

The actual substance of Pinnacle’s proposal has been the subject of some controversy. For the record: Riviere, as the $250 million project has been dubbed, would include a “riverboat” casino with about 1,500 slot machines and 50 table games. There would be a 1,000-seat entertainment venue upstairs along with restaurants and an adjacent 100-room boutique hotel.

The Louisiana Gaming Control Board has already cleared the project, which Pinnacle calls Phase One. If voters approve the addition of a third gaming license to the parish on Feb. 9, the casino could be opening its doors within two years, the company says.

Betting on the future

The company’s long-term plans for the roughly 550 acres they own include the possibility of a golf course, a mixed-use housing development, even a horse trail. But Pinnacle isn’t committed to any of that, regardless of how the vote turns out.

Pinnacle’s economic impact study, dated July 2007, says Phase One of Riviere will provide about 1,070 permanent jobs with an annual payroll, including benefits, of $35 million, not counting about 700 or so construction jobs. More broadly, they claim the project will produce $15 million in new annual tax revenue, and say they expect to purchase $23 million in goods and services from Louisiana businesses, $13 million of which would come from area firms.

It’s hard to say how much of the economic activity generated by a new casino represents a net gain for the local business community, if any. Disposable income is finite, so if someone spends $50 at a casino, it might just represent a $50 loss to the spender’s favorite bar or restaurant. Further complicating matters is that researchers have yet to come up with an agreed-upon formula to weigh the economic benefits of gambling against its economic and social costs. Sue McNabb, a former assistant attorney general who developed Louisiana’s gambling treatment referral program, says there is usually a spike in problem gambling when a new casino comes into a market, but it typically settles down in less than a year.

But if Pinnacle runs off the competition, we could end up more or less breaking even. In other markets, Pinnacle has created a reputation for investing heavily in its properties, the newest being the $507 million Lumiere Place in St. Louis.

One Wall Street analyst, who was not authorized to be quoted, says Pinnacle has a reputation for providing the level of service and amenities that attract higher-income patrons. Penn National Gaming, which owns and operates Hollywood Casino, is considered more of a mid-level player, while Belle of Baton Rouge parent company Columbia Sussex is widely regarded as something of a bottom feeder. A spokesman for Columbia Sussex Corp. and Tropicana Casinos & Resorts, affiliated companies owned by William J. Yung, declined to comment for this story.

In December, the New Jersey Casino Control Commission decided not to renew Columbia Sussex’s license to operate the Tropicana Casino and Resort in Atlantic City, N.J., citing a spotty record of regulatory compliance, poor customer service and layoffs of a quarter of the casino’s staff. It was only the second time in 29 years of legalized gambling in the state that the commission had turned down a renewal request. The casino remains open as the company appeals the ruling. While the New Jersey decision has no direct effect on the company’s Louisiana holdings, company officials say the loss of their Atlantic City property could force them to declare bankruptcy. Columbia Sussex has talked about building a new riverboat for the Belle, but has delayed unveiling the plans.

Photo by Marie Constantin

JUST SAY NO: Kelly Stutes, who lives in the Spring Lake subdivision off Bluebonnet Boulevard, is one of the leading opponents of Pinnacle’s planned Riviere casino. Stutes says she isn’t against gaming, just the location of the planned resort.

Penn National admits Hollywood Casino, built in the early 1990s and opened in 1994, is outdated. But the company has spent about $9 million on renovations over the last two years, Hollywood general manager Jon Zimmerman says. Penn National has made noises about replacing the Hollywood boat with a newer one, although Zimmerman says the investment of moving and renovating what is now called the Argosy Lawrenceburg becomes less likely with Pinnacle in the market. New York firms Fortress Investment Group and Centerbridge Partners are in the process of acquiring Penn National.

A Penn National study commissioned by economist Loren Scott indicates that Pinnacle would likely push one—and possibly both—of the new boats out of the market, meaning that Pinnacle’s arrival could actually decrease the amount of gambling revenue produced here. Pinnacle’s own study disputes that claim, insisting that while Riviere would certainly take significant business from the other two boats, it would grow the market enough so that all three would make money.

“If you have three different analysts, and they each do their own study, you would probably get three different answers” as to whether Baton Rouge can support a third casino, says Alan Silver, director of casino resort studies for Tulane University. Currently, more than 90% of the gamblers at the existing Baton Rouge boats are local residents, even according to Pinnacle’s own study. But Silver says if Pinnacle “builds something spectacular,” including the golf course and other amenities, they could draw from a wider area.

“Gambling is really supposed to be a catalyst for tourism, not the sole tourist attraction,” says Len Blackwell, the former chairman of the Mississippi Gaming Commission. “What we find is the higher caliber the company, the better off you are.” The gaming industry is moving to a business model whereby half the revenue or more comes from the amenities, not gambling, he says.

Location, location, location

The proposed Riviere property is zoned rural, in what Metro Councilman Pat Culbertson, who represents the area, calls the “last unspoiled corridor in the city.” The official land use, according to Culbertson, is “residential estate agricultural,” meaning only one unit per acre. The idea, he says, was to preserve the character of River Road. City-parish planning commission director Troy Bunch did not return a phone call seeking comment.

“This is a quiet area. I have to hand it to the city-parish; they put a little planning and thought into this,” Stutes says. “[A casino] sticks out just as bad as a strip club.”

Pat Fellows, a triathlete and the owner of Fresh Salads and Wraps in the Main Street Market, regularly bikes 100 miles between Ben Hur Road and St. Gabriel, and says River Road is one of the only places to ride in the area. Fellows helps to organize races that incorporate River Road; in July, one race drew 400 people, he says. He argues cities like Austin, Texas, Raleigh, N.C., and Portland, Ore., draw the young and motivated in part because they are cycling and fitness meccas.

“Did these cities become successful through casino revenue? I won’t bother to answer that,” he says. “The Pinnacle project may bring in some jobs and some tax revenue, but at what cost? Short-sighted, I think.”

“Overall, I think it’s good when we have competition, because it breeds opportunities,” says Eric Lewis, owner of Ephod Business Solutions and president of the Baton Rouge Black Chamber of Commerce, who says he’s leaning toward voting for the new casino.

Lewis attended a January meeting in Baton Rouge with Pinnacle President Wade Hundley and a number of minority business owners, in which Pinnacle pledged to work with small and minority-owned businesses if the casino is approved. Lewis says it was the first such outreach attempt by a large business that he could remember, and says the project could potentially benefit the poor areas near Gardere Lane.

From a land-use perspective, many people would argue that the logical place for a new casino is downtown near the other boats, where the city is laboring to create a viable entertainment district. Hundley says Pinnacle was never interested in downtown, not because they couldn’t find enough land, but because they didn’t want to be associated with the existing boats.

Photo by Marie Constantin

STANDING PAT: Metro Councilman Pat Culbertson describes the area in which Pinnacle plans to build its resort as 'last unspoiled corridor of the city.'

“We think what’s great for the city is great for downtown as well,” Hundley says. When viewed from above, it’s clear that the growth of the city is in south Baton Rouge, and Pinnacle would fit into that growth, he says.

David Kees, owner of The Buzz Café downtown and an arts and entertainment district board member, says he has mixed feelings about the existing boats. While Hollywood has “spent big money” upgrading its facilities, he says he hasn’t seen much from the Belle. Still, both contribute to his bottom line. More importantly, an entertainment resort in south Baton Rouge will draw people away from downtown and hurt the city’s efforts to promote downtown as a destination in its own right, he believes.

“Downtown already has the infrastructure to support it,” Kees says.

River Road does not have the infrastructure downtown has, and traffic, as with any development of any size, is a major issue. Pinnacle’s preliminary traffic study, prepared by ABMB, says the development would generate about 485 trips per day between 4:30 p.m. and 5:30 p.m., the peak local drive time. About 63% of that traffic is expected to use Bluebonnet Boulevard, as it provides the most direct route from the interstate, with the rest spread across Highland Road, Burbank Drive, Nicholson Drive, Gardere Lane, GSRI Avenue and River Road. The study does not include an estimate of how many trips will be created by the casino during its peak times, which are basically weeknights from about 7 p.m. until 10 p.m. and all weekend, Hundley says.

The study’s executive summary says “several off-site improvements” are needed, but the only specific improvements mentioned are a westbound left-turn lane and eastbound left- and right-turn lanes on Gardere at Nicholson. The study accounts for plans to widen Burbank from two to four lanes, but not for the residential and commercial projects already in the works along Bluebonnet because traffic counts for those projects were not available. If the casino is approved, Pinnacle would have to do a more substantive analysis, sit down with the city, and discuss what improvements are needed and who should pay.

“We are prepared to pay our own way,” in terms of traffic, general infrastructure improvements and even fire protection, Hundley says. “We’re not asking the city to pay for our improvements.” In Lake Charles, where Pinnacle has built the $370 million L’Auberge du Lac Hotel & Casino resort and is in the process of building Sugarcane Bay next door, the company spent $6.5 million on a “Texas turnaround” to manage the traffic flow.

“We are dependant on repeat business,” Hundley says. “Anything we can do to mitigate traffic, we pay for.”

Zimmerman doubts Pinnacle would invest as much as they have in Lake Charles just to serve the state’s smallest gambling market, and questions Pinnacle’s commitment to pay their own way. Say they buy a new fire truck for a local department; are they going to pay the salaries for the firefighters that drive it?

“I’m not afraid to compete with Pinnacle,” he says, “but I don’t see much in terms of net positives for the city or East Baton Rouge Parish.”

Click here for a summary of the case for and against.

Click here for a by the numbers breakdown of each casino.