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appendix 4

gov. edwin edwards era and
harrah's jazz company's
falling house of cards

chapter1
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annotated selected articles
Times-Picayune
6 december 1989 - 3 december 1995


by abbye a. gorin

6 December 1989
Eggler, Bruce
"Casino wouldn't survive, opponents say" B-1.

Warren C. de Brueys, former FBI agent and retired managing director of the New Orleans Metropolitan Crime Commission, claims that chances are good that a casino would go belly-up in six to nine months and that there will be an inevitable increase in crime.

7 February 1991
Eggler, Bruce
"Rivergate will close on July 1 to cut deficit" C-1.

Only the Rivergate's underground parking lot remains open. A gambling casino is considered for the site.

18 October 1991
Eggler, Bruce
"Riverfront deal near, reports say; development ideas include hotel, plant conservatory" A-1.

The Dock Board owns the Rivergate, but the city owns eighty percent of the land under it. The Dock Board is obligated by lease with the city to operate the building as a convention center for another several decades. Debt service on the bonds issued to pay for the building costs the Dock Board $700,000 a year, and the Rivergate, like most convention centers, runs a large annual deficit even when used regularly. Transferring control to the city should simplify redevelopment of the site.

22 January 1992
Anderson, Ed and Jack Wardlaw
"New Orleans casino looking like a sure bet" A-1.

Gov. Edwards supports a bill, and officials in New Orleans, who played a major role in electing Edwards in November, want a casino.

10 February 1992
Donze, Frank
"Odds in favor of a casino in N.O., Barthelemy says" A-1.

Mayor Sidney Barthelemy has advocated a gambling casino since 1985; renovate the Rivergate or tear it down and construct a new building.

19 April 1992
Bridges, Tyler
"Resort tycoon pulls out the stops; power brokers courted in N.O." A-1.

Christopher Hemmeter made his New Orleans debut at a $10,000 cocktail party at the Aquarium of the Americas. Ron Forman was the host, but Hemmeter paid the cost.

22 April 1992
Bridges, Tyler
"Palatial casino envisioned; Rivergate Trade Center would fall to wrecking ball" A-1.

Hemmeter's $1 billion plan to redevelop the riverfront includes a $400 million casino on the Rivergate site. The never-used tunnel under the Rivergate would be a job training center. The plan requires no state money, and the casino will repay the project's cost within 25 years.

1 May 1992
Eggler, Bruce
"Rivergate finally rests in N.O. pocket" B-4.

Rivergate ownership transferred from the Dock Board to the city. Most redevelopment proposals are expected to be for casinos.

9 May 1992
Eggler, Bruce
"Chamber cabinet votes for casino plan; support shows a chink in business opposition" B-1.

The executive Cabinet of the Chamber of Commerce voted to endorse a casino plan similar to Hemmeter's proposal. The motion to endorse any $1 billion economic project was backed mainly by Ron Forman, president of the Audubon Institute; William Metcalf, publisher of City Business and New Orleans magazine; and Michael Sport, president of Production Management Companies.

24 June 1992
Editorial
"The rape of New Orleans" B-6.

The governor will name the members of the gaming commission that will pick the casino operator and negotiate the deal. The details of the operator and the deal will be shielded from public scrutiny.

3 October 1992
Editorial
"Council deals the people out" B-6.

The City Council rejected Councilwoman Jackie Clarkson's proposed referendum to allow the people of the City to vote on whether or not they want any casino gambling in the city. City Attorney Bill Aaron quickly concluded that Clarkson's proposed referendum would be illegal.

6 November 1992
Bridges, Tyler
"The winner; one step closer to blackjack on the bayou; mayor chooses Hemmeter and Caesars" A-1.

Barthelemy's criteria for selection of Hemmeter: financial strength, financial commitment, realistic operating projections, benefits vs. risk, architectural design, plans to employ local residents, plans to hire minorities, and overall qualifications.

17 February 1993
Bridges, Tyler
"Forbes questions casino's financing" A-1.

City has not required casino developers Hemmeter and Robinowitz to detail their financial worth because it would be "an invasion of privacy." City has yet to demand that the developers provide a performance bond. Councilwoman Jackie Clarkson demanded that Hemmeter be required to post a performance bond. James Robert [Jim Bob] Moffett, chairman of Freeport-McMoran, said that the Business Council is satisfied that the mayor is negotiating a good deal for the city, and the mayor is acting in a business-like fashion.

25 February 1993
Eggler, Bruce
"N.O. architects attack Hemmeter's plan" B-2.

The New Orleans chapter of the American Institute of Architects, George Hero, president, urged Hemmeter not to tear down the Rivergate. A statement approved by the chapter said: "Although not presently considered an historic landmark, the building, with its unique style, open structure and position in the Central Business District, merits careful consideration as a valuable piece of modern architecture." Hemmeter has picked six local design firms: Eskew-Filson Associate, Mathes Group, Billes-Manning Architects, Hewitt-Washington and Associates, Concordia Architects, and I. William Sizeler.

26 February 1993
Editorial
"Hear the public on casino plan" B-6.

City Planning Commission should not vote today on its staff's recommendation on the proposed casino at the Rivergate site. Citizens should be allowed to comment. A coalition of nine neighborhood associations severely criticized Hemmeter and Robinowitz's proposals to replace the Rivergate. The public is already suspicious of deals made behind politicians' and developers' doors.

28 February 1993
Editorial
"Planners unworthy of name" B-6.

City Planning Commission's vote ratifying Hemmeter's sprawling downtown gambling complex ranks as a major civic disappointment. Commissioner Renna Godchaux's urging to consider peripheral parking was ignored.

26 March 1993
Donze, Frank
"Mayor refuses to hold off on casino," A-1.

Mayor Barthelemy refused a State request to put off until mid-summer leasing the Rivergate to Hemmeter. One casino board member said the whole effort "is screwed up beyond all belief."

16 April 1993
Ruth, Dawn
"Council approves casino lease; jobs, budget are expected to expand" A-1.

Hemmeter won the New Orleans City Council's blessings to build the world's largest casino at the foot of Canal Street. Councilwoman Jackie Clarkson, who did not support the demolition of the Rivergate, changed her mind after speaking to Gov. Edwards.

5 June 1993
Eggler, Bruce and Frank Donze
"Money waved as 2 firms vie for casino; millions offered to state" A-1.

Only two companies submitted bids to operate a casino -- Grand Palais Casino Incorporated and Harrah's Jazz Company.

23 June 1993
Alpert, Bruce (Washington bureau)
"Historic group: N.O. endangered by gambling" B-1.

City's downtown area is one of "America's 11 most endangered historic places."

19 July 1993
Donze, Frank
"Rivergate implosion may hurt levee, study says" B-1.

Hemmeter plans to bring down the Rivergate with dynamite. The impact of the proposed implosion could be especially critical at Woldenberg Park where the bank stability is recognized to be marginal.

7 August 1993
Cannizaro, Steve
"State casino law upheld by court unanimously" A-1.

Louisiana Supreme Court by a vote of 6-0 upheld the 1992 state law authorizing a land-based gambling palace at the Rivergate site, as well as riverboat gambling, a lottery, and video poker. According to Forgotston, the influence of Gov. Edwards would be too great for the Supreme Court to overturn the law.

12 August 1993
Ruth, Dawn
"City hall to proceed on layoffs" A-1.

State casino board rebuffing Hemmeter's elaborate plans in favor of a competitor's smaller version stunned New Orleans officials. The City already leased the Rivergate site to Hemmeter. The decision sets the stage for a disagreement between the City and the State over demolition of the Rivergate.

17 August 1993
Bridges, Tyler and Peter Nicholas
"Hemmeter wants half of the casino; Rivergate is trump card" A-1.

Hemmeter said under this 50-50 proposal Harrah's would be the casino operator, not Caesars World, his partner in the bid. He did not rule out accepting Harrah's proposal to renovate the Rivergate. Gov. Edwards urged Harrah's to level the Rivergate and build a new casino.

26 August 1993
Bridges, Tyler
"Fortune cookie gave deal a boost" A-1.7

Gov. Edwards called Wendell Gauthier who headed negotiations for Harrah's Jazz Co. Ten hours later, Gauthier and Harrah's cut a deal with Hemmeter that gave each group one-third of the casino.

15 September 1993
Donze, Frank
"Tear it down a little? Developers test Rivergate plan" B-1.

Casino developers are testing reaction to a proposal to partially demolish the Rivergate. Mayor Barthelemy and several City Council members have vowed to reject any agreement that doesn't include demolition of the Rivergate.

13 October 1993
Bridges, Tyler and Frank Donze
"Harrah's to replace Rivergate; temporary casino in auditorium, sources say" A-1.

Harrah's Jazz Company proposes to demolish the Rivergate and build a 200,000 square-foot casino to open January 1995. Harrah's officials are expected to announce that they had agreed to Mayor Barthelemy's demands to set up a temporary casino in the Municipal Auditorium.

7 December 1993
Eggler, Bruce
"Revised Rivergate lease adds up" A-1.

One of the country's largest title insurance companies has promised to provide title insurance for the Rivergate site in spite of the lawsuit challenging the City's right to lease the site for a casino. Such a guarantee would mean Harrah's can demolish the Rivergate and start building the permanent casino before the suit by lawyer Thomas Tucker is settled.

10 December 1993
Editorial
"Gambling politics a bad deal" B-6.

The Governor and the Legislature have colluded to deny most efforts at local control of the location and licensing of the New Orleans land-based casino. Government is almost by decree; political cronyism has been impossible to miss.

17 December 1993
Eggler, Bruce
"Harrah's: $677 million expected" C-1.

John Mayewski, chief financial officer for Harrah's, forecast that in 1996, the first full year the permanent casino is in operation, it will have gambling revenues of $618 million and non-gambling revenues of $59 million. The profit of $121 million is expected to be divided among the three owners. The temporary casino in the Municipal Auditorium, expected to be in operation one year, will generate $385 million. The state should realize $5.1 billion during the 30-year lease.

27 May 1994
Nicholas, Peter
"Nunez hands out checks from casino owner in Senate" A-1.

President of the Louisiana Senate, Samuel Nunez, passes out envelopes containing $2,500 campaign checks from Louie Roussell III, owner of the Star Casino riverboat and trainer of horses that race at the Fair Grounds.

29 June 1994
Bridges, Tyler
"The grand plan; wharf casino reins in glitz" A-1.

Hemmeter unveiled plans for his $192 million riverboat casino complex. The site, a 49-acre tract up river from the Crescent City Connection [dual bridges spanning the Mississippi River], is owned by Joseph Canizaro and two partners. Billy Broadhurst, former law partner of Gov. Edwards, said the financing was in place.

7 July 1994
Eggler, Bruce
"Agency knocks casino plans; keep Rivergate, city panel says" B-1.

Harrah's lease with the City for the Rivergate requires demolition. The Central Business District Historic District Landmarks Commission passed a resolution calling the Rivergate "a better example of architectural design and a better facility than the proposed casino." Because the Rivergate is not an official City landmark or in designated historic district, the Landmarks Commission has no authority over it.

16 July 1994
Meitrodt, Jeffrey
"Canizaro, Hemmeter strike a deal; developer sells riverfront acreage to casino interest" C-1.

Developer Joseph Canizaro and partners sold 49 acres of prime riverfront property to Hemmeter's Grand Palais Riverboat Incorporated and Capital Gaming International gambling interest for $37.5 million. The land is part of a 72-acre tract that they acquired for $11 million in 1991. Twenty-three acres were purchased by the New Orleans Exhibition Hall Authority for $13 million. Canizaro and partners pocketed $50.5 million for the 72 acres -- 359 percent profit.

17 November 1994
Hughlett, Mike
"Harrah's closes bond sale; deal sets the tone for casino bond market" C-1.

Junk bonds of $435 million carry a 14.25 percent coupon plus a cash sweep of 7-1/4 percent of casino's cash flow up to $350 million annually. The bonds should yield at least eighteen percent.

19 November 1994
Donze, Frank
"Casino work begins; ceremony held at auditorium" A-1.

The start of a $40 million renovation on the auditorium comes twenty-nine months after Gov. Edwards signed the state casino act into law and fifteen months after the state regulators choose Harrah's and Jazzville to operate the casino.

11 December 1994
Mullener, Elizabeth
"Requiem for the Rivergate; architectural landmark reflects its era" A-1.

Reviewed are the Rivergate's architectural and engineering achievements and the demolition that will happen despite the die-hard campaign by Friends of Rivergate to save the building. The article is based on interviews with Nathaniel Curtis and Betty L. Moss. [The Times-Picayune won the National Trust for Historic Preservation 1995 National Honor Award. This story was one of seven stories on heritage topics that won the award for the paper.]

14 January 1995
Bridges, Tyler
"Delicate touch needed for roof" A-1.

Demolition of the Rivergate will cost $4.2 million. The demolition plan, based on the original architectural plans and construction design, is described with the aid of computer graphics.

9 February 1995
Donze, Frank
"Casino owners retain right to give cash to polititians" B-1.

The State Casino Board rejected its staff's recommendation to ban owners of the City's land casino from contributing money to political candidates in Louisiana. The board also rejected a proposal that it limit the amount of "bad debts" on which the casino will not have to pay state taxes.

30 March 1995
n.n.a.
"Let the games begin" C-1.

Hemmeter's River City casino complex opens, a $207 million, two-boat venture of Hemmeter and Capital Gaming International.

4 April 1995
Donze, Frank
"Casino ready to build; underground work to begin" B-1.

Construction of the world's largest casino will begin as soon as demolition of the Rivergate is completed; only a small portion remains standing. Renovation of the Municipal Auditorium is proceeding for 1 May opening of the temporary casino. A court order that stopped the demolition of Place de France between the Rivergate and the World Trade Center may cause a change in the casino design.

22 April 1995
n.n.a.; Boyd, G. Andrew and Ellis Lucia, photographers
"Requiem for the Rivergate: building goes out a winner" B-8.

A pictorial record of the demolition of the award winning Rivergate which opened in 1968 as the City's first convention center.

26 April 1995
Donze, Frank
"Rivergate trash dumped into lake in error" B-1.

Unauthorized materials, demolition debris was dumped into Lake Pontchartrain near West End for landfill.

18 June 1995
Meitrodt, Jeffrey and Mike Hughlett
"A house of cards? Harrah's future is anyone's guess" A-1.

The boom goes bust.

18 August 1995
Bridges, Tyler, Jack Wardlaw, and Ed Anderson
"Gambling probe looks at gifts to lawmakers" A-1.

Gambling interests gave more than $250,000 to state legislators in 1993-94. Major campaign donors and major recipients are listed.

8 November 1995
Bridges, Tyler
"Hemmeter Enterprises in Chapter 11" C-1.

The filing mainly involves the riverboat casino and two small Colorado casinos owned by Hemmeter's Denver-based company and does not involve Hemmeter's one-third share in Harrah's Jazz Company's New Orleans casino. That share is owned by Grand Palais Casino Incorporated. The riverboats left $30 million in unpaid bills to vendors and are in default on $160 million owed to bondholders.

22 November 1995
Bridges, Tyler and Mike Hughlett
"Harrah's closes in bankruptcy" A-1.

Harrah's lead bank, Bankers Trust, froze money for the construction of the new casino. The temporary casino in Municipal Auditorium has not been able to generate enough revenue to cover its operating expense. Two thousand employees are out of work.

23 November 1995
Bridges, Tyler
"Holiday bleak for 3,300; city could lose millions" A-1.

When Harrah's shut down the money-losing temporary casino and stopped construction on the new casino, 2,500 casino employees and 800 construction workers were laid off. A gaping hole was punched in the municipal budget, the bankruptcy triggering what is likely to be a legal brawl with creditors.

3 December 1995
Meitrodt, Jeffrey
"Broken promises" A-1.

Negotiating the casino deal for the City with Hemmeter, later with Harrah's Jazz, were primarily Ron Nabonne, Ed Markle, and Donald Zuchelli (Markle and Zuchelli work for the Rivergate Development Corporation, the city's casino oversight board). The city did not require the promoters to buy a performance bond. While Harrah's unconditionally and irrevocably guaranteed to finish the permanent casino, part of the state's contract with Harrah's, it is subject to two conditons: off the hook in the event of a "force majeure" (nuclear war, terrorism, riots), and if the project's lenders fail to make available previously committed money. Bill Thompson, expert on gambling at the University of Nevada, said, "I think they put that in knowing full well they might want to bail out on this project. And they wanted to be able to blame it all on the bank." bottom_line.GIF 

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