Lawsuit talk heats up after failed deal

Mike Robinson

Monday, March 25, 2002 | 9:50 a.m.

CHICAGO -- One lawsuit has been filed and another is being contemplated now that the Illinois Gaming Board has rejected a plan under which Las Vegas gambling giant MGM MIRAGE would pay $600 million to operate the dormant but potentially ultra-lucrative Emerald riverboat casino.

The board, which in January 2001 denied a license to the planned casino, which was to be located in suburban Rosemont, said it was interested in floating its own proposal for attracting investors.

Friday's decision came as Rosemont, a tiny village next door to O'Hare International Airport, sued the Emerald, declaring that it has lost more than $20 million as a result of the planned casino being put on ice.

Gaming Board administrator Philip Parenti issued a one-sentence statement confirming reports that the MGM plan had been scuttled.

"The board has rejected the current MGM proposal and is considering its own counter-proposal, which is encouraging a process in which candidates can participate as part of the settlement agreement," he said. Details of the counterproposal were not available immediately.

A board spokesman, Gene O'Shea, said the decision in no way precluded Las Vegas-based MGM MIRAGE from participating in some new proposal to restart the long-stalled casino project.

The board's denial of a license 14 months ago said that the father-son team of Donald and Kevin Flynn, who were the chief investors in the casino, had made false statements and that some investors as well as a contractor hired to haul trash at the site had ties to organized crime.

Parenti had floated the MGM MIRAGE plan as one that would restart the project, which has long been the dream of Rosemont Mayor Donald Stephens and is also eagerly awaited by politically connected investors.

Under the MGM MIRAGE plan, investors would have reaped an estimated $455 million in payments and in turn would donate $160 million to the state.

The board's decision set off immediate speculation that MGM MIRAGE, which has a contract with Emerald, would sue to enforce it.

Attorney Lawrence Suffredin, who represents MGM MIRAGE, could not be reached for comment on the decision.

Before its planned move to Rosemont, Emerald had operated the Silver Eagle riverboat gambling casino in East Dubuque on the Mississippi River. It closed that casino after it ran into financial trouble and went shopping for a more rewarding venue.

The Rosemont deal was forged at the Legislature and attached to Gov. George Ryan's massive Illinois First public works legislation.

Rosemont said in its lawsuit that its deal with the casino "obligates Emerald to obtain the Gaming Board's approval of relocation of its casino to Rosemont and for Emerald to maintain its owner's license ..."

It said the Flynns were under obligation to give their "best efforts" to get and maintain the license but cited the board's finding that in sworn depositions they had departed from the facts.

"By providing false and misleading information to the Gaming Board and its staff, Emerald breached the Emerald agreement," the lawsuit alleged.

Calls left at Emerald offices and at the office of Emerald attorney C. Barry Montgomery on Friday night were not returned immediately.