Lucrative deal for Rosemont detailed in lease

Monday, Oct. 2, 2000 | 8:36 a.m.

Details contained in a 120-page lease and other documents show the village would receive at least $5.5 million annually in rent and other payments from Emerald, plus an estimated $6.4 million each year from a 5 percent gambling tax, the Chicago Sun-Times reported in its Sunday editions.

"It smacks of ownership," said Sterling "Mac" Ryder, a member of the Illinois Gaming Board.

Under the proposal, the casino would sign a $1.5 million lease and pay $2 million a year to an economic development fund. The casino would pay another $2 million to help establish a new tourism board, of which two of the three members would be appointed by Rosemont Mayor Donald Stephens.

Stephens said money for the two village boards are well within the spirit of state law.

"It's always been the position of the gaming board that they wanted these casinos to help the local communities," Stephens said. "I said I wanted a fund for tourism, and I wanted a fund for infrastructure because I feel they are going to impact greatly on it."

The gaming board is concerned about another stipulation in the lease in which Emerald would compensate the village for a $43 million parking garage that would feature a 25,000-square-foot automobile museum.

Stephens is an avid car collector who has 32 classic cars at his Wisconsin estate. He said he has spoken with two collectors and said none of his cars would be on display at the museum.

Work on the 3,000-space parking garage and museum will be overseen by Degen & Rosato Construction Co. Isaac Degen, Ray Rosato and Stephens were acquitted of 1995 federal mail fraud charges, in which they were accused of a kickback deal in which Stephens would get a hidden interest in a land deal stemming from construction of the Rosemont Horizon sports and entertainment complex, now called the Allstate Arena.

Degen & Rosato also will oversee construction of the casino with Power Construction Co. The gaming board is concerned that the arrangement would stifle competitive bidding on the project.

"We wanted to use Degen & Rosato on the parking garage; the garage and the casino are tied together," Stephens said. "Emerald wanted to use Power, so the two of them got together."

Degen & Rosato has regularly donated to Stephens' campaign fund.

Stephens compares the casino lease to the one between Elgin and the Grand Victoria casino.

The Grand Victoria pays Elgin 3 percent of its net operating income each year. Elgin will make about $3 million this year on the lease, city officials said.

The Rosemont casino deal is being challenged by Lake County Riverboat L.P, a group of investors who say the Illinois Legislature crafted an unconstitutional law that allows only Emerald the right to open a casino in Cook County.

"There's nothing devious or sinister about the whole thing," Stephens said. "To this date, the gaming board has never asked me a question. Everything everybody wants to know is in the press. This agreement they want to know about, they've had it since February."

The gaming board could vote as early as Oct. 17 on Emerald's request to renew its casino license and move operations to Rosemont.

Emerald, formerly H.P. Inc. shut down its failed Silver Eagle casino three years ago in the face of tough Iowa competition.