Former Station executive, partner trying to buy Kansas City riverboat

Eric Palmer

Monday, Dec. 20, 1999 | 10:53 a.m.

KANSAS CITY, Mo. -- An investor group led by casino operators William Grace and Joseph J. Canfora is still interested in buying the Flamingo Hilton Casino in Kansas City. The group will make a bid now that Station Casinos Inc. has pulled its $22.5 million offer.

Grace said Friday -- the day after it was announced the Station offer was off -- that his group would soon get in touch with Hilton Hotels Corp. and the Missouri Gaming Commission about its intents. He said it was premature to disclose any information about what the group's bid might entail.

In September, Canfora said the group was prepared to pay more than the $22.5 million Station bid.

Grace, principal owner of the St. Jo Frontier Casino and The Woodlands racetrack, is president and chief executive of W.M. Grace Cos. He said W.M. Grace Cos., which recently had its gaming license renewed by Missouri, would hold the license for the Flamingo if the group were to acquire it.

"I think we are a logical purchaser, since we are here and already licensed," said Grace. "That would make it easy for the Gaming Commission."

He said he had heard there was another party within the industry that was interested in bidding on the Flamingo, but he had not heard who.

Officials with Park Place Entertainment of Las Vegas, which is selling the casino for Hilton, were unavailable for comment, as were commission officials.

Park Place was created when Hilton spun off most of its gambling properties.

Canfora, who recently became president of Horseshoe Gaming, was the first general manager of Station Casino in Kansas City. Executives who worked with Canfora at Empress Entertainment, where Canfora previously was president, would be investors, as would five local investors.

They are Georgia Buchanan, president of All Pro Construction Inc. and widow of Kansas City Chiefs player Buck Buchanan; Roger Cohen, co-executive chairman of Cohen-Esrey Real Estate Services; Rafael Garcia, president and chief executive of Rafael Architects Inc.; Mary Jane Kelly, president of J.P. Kelly Properties and a Northland political activist; and Tula Turner Thompson, president of Supreme Insulation Inc.

Station, based in Las Vegas, owns two casino boats in Kansas City, which hold the largest share of the market. Its bid for the Flamingo apparently had been held up by an investigation into a substantial payment it made to a St. Louis lawyer, Michael Lazaroff, after gaining its license for its Kansas City casino in 1997.

Station said in an announcment that its deal with Hilton had required it to close the transaction by Friday, and that an extension could not be reached.

The payment to Lazaroff came to light during an audit of Station's books as part of its bid for the Flamingo. Station had denied doing anything wrong.

Lazaroff has declined to comment.

This was the second deal for the Hilton Flamingo to fall apart. Earlier this year, Trump Hotels & Casino Resorts withdrew a $15 million offer. There were indications that the commission would not approve that sale over concerns about the strength of Trump Hotels' finances.

Hilton put the Flamingo on the block after it ran into problems with the commission over accusations that it had funneled $250,000 to Elbert Anderson, chairman of the Kansas City Port Authority in 1993 when the agency selected Hilton to build on city property.

Hilton last year paid the federal government about $650,000 to avoid criminal prosecution over the allegations. A former Hilton senior vice president faces charges related to the case. Anderson is serving a two-year sentence after being convicted of separate charges relating to bribing public officials to steer public money to his companies.

The scandal put Hilton to the brink of being fined, suspended or stripped of its Missouri gaming license.