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BY STEVE ZABROSKI
Times Correspondent | Sunday, October 14, 2007 | (4 comment(s))
EAST CHICAGO | A favorable ruling from a downstate court this week could nearly triple the city's annual casino revenue, and the city wants to be ready.
The City Council met in special session Friday to pave the way for the receipt of an extra $8 million per year in gambling taxes previously paid to a private development firm and a nonprofit foundation.
State lawmakers approved a measure in April that would direct all payments from the lakefront casino to the city, instead of the other organizations, if the casino was sold.
RIH Acquisitions Indiana LLC transferred ownership of the Resorts East Chicago casino to Nevada-based Ameristar Casinos Inc. last month.
Foundations of East Chicago Inc., recipient of 2 percent of annual casino revenues through a decade-old funding agreement, filed a complaint in Marion County Superior Court in May for a permanent injunction against the state law, which attorneys for the foundations claim is unconstitutional.
A hearing on the injunction is scheduled for Thursday in Indianapolis.
"We want to be ready when and if the judge signs the order," Corporation Counsel Carmen Fernandez said. "We want to be a step ahead of the game."
The original agreement -- drafted when legalized gambling was first introduced to East Chicago -- provides 1 percent of annual casino revenues to the city, 1 percent to the Twin City Education Foundation, 1 percent to the East Chicago Community Development Foundation, and 0.75 percent to East Chicago Second Century, a private group.
Earlier this year, the two nonprofit foundations merged their management structures and boards of directors into a one entity called Foundations of East Chicago Inc.
With the city's current 1 percent annual share of gaming money bringing in about $3 million, the new measure would increase yearly payments by $8.25 million.
City ordinances preliminarily approved Friday would create a pair of unpaid advisory boards appointed by Mayor George Pabey -- one for education and one for economic development -- to determine how the casino money would be spent.
"We have all these projects ready to go," Fernandez said. "But right now we don't have the money."
Not all council members approved of the funding ordinances, which passed first and second readings on a 5-3 vote.
"I think the foundations do a good job," said Councilman-at-large Jesse Gomez, a foundation director for seven years before his election to the council. "I have problems turning over this money to the city."
Gomez was joined by Chinita Lindsay, D-3rd, and Anthony Copeland, D-at-large, in opposing the redirection of the gaming funds.
An emergency meeting of the City Council will be Monday afternoon for final passage of the new ordinances after Lindsay opposed suspending the rules to hear a third reading of the measures on Friday.
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N. Mangual wrote on Oct 17, 2007 1:16 PM:
EC Friend wrote on Oct 14, 2007 2:41 PM:
Archer wrote on Oct 14, 2007 10:39 AM:
Where does it go wrote on Oct 14, 2007 10:29 AM: