INDIANAPOLIS | Gary has lost its latest attempt to force Majestic Star Casino to resume paying a $600,000 monthly subsidy to the city.
The Indiana Court of Appeals on Thursday upheld a lower court decision that denied Gary's request for an injunction forcing Majestic Star to continue paying the subsidy while the two sides fight a court battle over an unbuilt access road to Buffington Harbor.
"The city's request to force us to continue payments while all of these disputes were going on was not well grounded, and the Court of Appeals has affirmed that unanimously," Peter Rusthoven, an attorney for Majestic Star, said Friday.
Gary Corporation Counsel Susan Severtson declined comment on the ruling Friday afternoon, saying she had yet to receive a copy of the appellate court opinion. The city has 30 days to appeal to the Indiana Supreme Court or ask the appellate court for a rehearing.
The dispute centers on a modification to the 1996 agreement in which Majestic Star agreed to pay 3 percent of its gaming profits to Gary, a deal similar to those negotiated by other casino host communities. Majestic Star argues that a 2005 amendment to the deal allows the company to withhold the subsidy until the city builds an access road to the casino harbor.
In March 2008, Gary Controller Celita Green told a Marion County judge that Majestic Star's withholding of the subsidy -- originally intended for economic development -- would prevent the financially troubled city from paying police and firefighter overtime.
Majestic Star owner Don Barden released $4.4 million to the city in September, while the two sides were pursing settlement. Rusthoven estimated that at least $3 million has gone into escrow since those negotiations dissolved.
As the dispute lingers, Northwest Indiana legislators are pushing legislation to move at least one of Barden's two lakefront casinos to the city's south side, either to a riverboat on the Little Calumet River or to a land-based facility near Interstate 80/94. Region lawmakers hope to revive the issue when the General Assembly convenes next month for a budget-writing special session.
