Pinnacle Entertainment, appearing before the Louisiana Gaming Control Board this morning, asked for and received a 90-day extension to submit a construction contract for its planned $350 million gaming complex on 560 acres along the Mississippi River in Baton Rouge. The vote was unanimous.
Tomorrow was the original deadline for submitting the contract, but Pinnacle officials told gaming board members that the lending market was effectively shut down as a result of the country’s economic situation. Jack Godfrey, Pinnacle’s executive vice president, general counsel and secretary, says the casino industry historically has had easy access to financing for projects, but the current market conditions were “unprecedented.”
The gambling industry market has been hit particularly hard compared to other sectors, with at least $33.5 billion in projects being cancelled around the country, including Las Vegas. Carlos Ruisanchez, Pinnacle’s executive vice president of strategic planning and development, says the company is one of the few solvent casino operators in the industry. Godfrey says the company hopes the lending market returns to some sense of normalcy between now and May 19, when the 90-day extension expires. If not, Pinnacle may be back in front of the board again asking for another extension, he says.
Godfrey says the company considered it prudent to wait on submitting a construction contract until it was clear that financing would be available to pay for the Baton Rouge project, which was approved by East Baton Rouge voters one year ago but is still awaiting a permit from the Army Corps of Engineers.
In approving Pinnacle’s Baton Rouge deadline, the board also granted another 90 days for the company to begin construction on its Lake Charles Sugarcane Bay project, on which Pinnacle has already spent about $45 million. Pinnacle officials stressed that the company fully intends to build both projects, noting that Louisiana is an extremely important market for the company in terms of profitability. “We still love the projects and still love the excitement of the projects,” says Cliff Kortman, Pinnacle’s senior vice president for construction and development.—Steve Clark