TOPEKA — The long-awaited hearing in front of the Kansas Supreme Court for the lawsuit over Kansas Crossing Casino and Hotel has finally been scheduled.
At 9 a.m. Jan. 25, 2017, 30 minutes of argument are scheduled in the case, which began when Kansas Crossing was awarded the Southeast Zone license, for the final of four state-owned casinos by the Kansas Racing and Gaming Commission in July of 2015.
Losing bidder Castle Rock and the Cherokee County Commission immediately filed suit against the State of Kansas and Kansas Crossing. Kansas Crossing was scheduled to be completed in June of this year but the lawsuits three times delayed commencement of construction. The extensions granted to Kansas Crossing have delayed the opening date to March 31, 2017.
The review board awarded the contract to the Kansas Crossing proposal, which totaled some $70.2 million, in 2015. It was the smallest of three competing proposals.
Castle Rock's bid was for a $145 million project for U.S. 400 near Interstate 44 in Cherokee County, and was the largest proposal.
Castle Rock's proposal was not only more than twice the size of Kansas Crossing's but was expected to bring in nearly 1 million visitors per year — mostly from out of state — about double the expectations from Kansas Crossing.
However an independent review questioned Castle Rock's ability to meet its debt service and to remain viable long-term.
In an April decision — the fourth such defeat for Castle Rock — Judge Larry D. Hendricks deferred to the gaming commission’s judgement noting that “to subvert that judgement in favor of a straight mathematical test of ‘best’ based solely on projected estimates would transform the entire … process into a mere numbers game, one in which the house — in this case, the State of Kansas — is far from certain to win.”
Hendricks also noted that Cherokee County argued that the state acted “arbitrarily, capriciously and otherwise unreasonably when they selected Kansas Crossing over Castle Rock.”
Hendricks rejected this, saying that while it was clear Castle Rock could obtain funding in any one of a number of ways, but that “the board’s concern with Castle Rock does not seem to have been that it could not be funded, however, but that it would fail even if it was funded.”
In the end, Hendricks said it didn't matter if he agreed with the board’s decision or not, but rather whether the board acted in an arbitrary, capricious or otherwise unreasonable manner, which he said was not the case “in light of the market uncertainties and the evidence before it.”
Russell Jones, one of the attorneys for Castle Rock said the appeal to the state supreme court is an “opportunity to put on evidence showing the decision … should be reversed.”
“We are looking for an opportunity to have a fair hearing,” he said in a telephone interview Wednesday, adding they are asking the court to reverse Hendricks’ decisions and grant the license to Castle Rock.
What would happen to the nearly-completed Kansas Crossing Hotel, he said, was not his clients’ concern.
“That would be up to the developers what they would want to do with it if the license were overturned,” Jones said.
Jones declined to comment on whether or not the case would be dropped or an appeal to a federal court would be made, should the Kansas court decline to reverse Hendricks.
Kansas Crossing Spokesman Garion Masterson said they were pleased the Kansas Supreme Court took jurisdiction of the matter, saying they hoped it would lead quickly to a resolution.
Masterson said they are hopeful the matter will end in January.
“I think we’re going to get a conclusion of a lawsuit we feel never had merit, and start generating revenues for the counties and the state of Kansas,” he said.
In April, a state-hired firm estimated the losses caused by the delays exceeded $5 million.
— Patrick Richardson is the managing editor of the Pittsburg Morning Sun. He can be emailed at firstname.lastname@example.org, or follow him on Twitter @PittEditor.