Engelstad says tideland lease being applied unfairly

Saturday, Aug. 23, 1997 | 3:54 a.m.

Engelstad, who is building a $300 million casino resort in Biloxi, said casinos - particularly his - are being singled out in a lawsuit filed by Secretary of State Eric Clark.

Clark sued a year ago claiming his office has the right to negotiate a tidelands lease with the casino, not the Biloxi Port Commission. The lawsuit was filed in Harrison County Chancery Court and a hearing is scheduled for Sept. 8.

Clark wants the court to stop Imperial Palace's project until the tidelands lease issue is resolved.

Imperial Palace has said it would rather discuss the lease with the Port Commission, which wanted to build a 200-slip marina. Port Commission executive director Larry Manuel filed an affidavit this week with the court, saying the commission will have no further talks with the gaming company unless Clark is involved.

The Gaming Commission has issued Imperial Palace a two-year license but has not granted the casino an opening date.

Tidelands are the earth underneath the water in which the dockside casinos float.

Records show Imperial Palace's annual lease has been appraised at $500,000.

Engelstad met Thursday behind closed doors with the Gaming Commission to discuss the lawsuit.

Engelstad said if Clark wins the lawsuit, "it will be the greatest miscarriage of justice that any court has ever ruled on."

"Why should we pay it and other people don't pay it. The law says it should be equally applied. He (Clark) is not equally applying it," Englestad said.

The Imperial Palace resort just off Intestate 110 would include the casino, a 1,000-plus room hotel, showroom and multi-screen movie theater. The casino has set a Dec. 15 opening.

Records show the seven Biloxi casinos contributed $3.8 million of the $4.5 million the state received from tideland leases last year.

In Tupelo on Thursday, Clark said Imperial Palace has "zero authority to be on public property.

"They're trespassing pure and simple. They don't have a lease with anyone (on the tidelands)," he said.

Clark said the Gaming Commission ignored its own regulations by allowing Imperial Palace to proceed with its pre-opening schedule without holding a lease on the tidelands.

"The Gaming Commission's position to this point is that it's my problem, not their problem. It appears to me the Gaming Commission is much more interested in promotion than they are regulation," he said.

Gaming Commission deputy director Chuck Patton said regulators will let the court decide what was fair for the state.

"I think it is the Gaming Commission's responsibility to see that the state of Mississippi will not be harmed," he said.

In that light, Patton said the commission had been assured by Imperial Palace that it would post sufficient bond before it opens to cover any costs the courts determine it owes the state.