Hard Rock Compliance Committee to Review Gary Casino Development After Questions Raised About Properties

Posted on: September 6, 2019, 12:53h. 

Last updated on: September 6, 2019, 12:38h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

Hard Rock International announced on Thursday that it has asked the compliance committee for its board of directors to perform “due diligence” on a proposed casino development the company is tied to in Gary, Ind.

Hard Rock International said it will have its compliance committee review a $300 million casino project in Gary, Ind., after an ongoing newspaper investigation raised questions about properties that need to be acquired for the development. (Image: Spectacle Entertainment)

The decision comes after an ongoing investigation by The Times of Northwest Indiana on properties acquired at tax sales, which are auctions the Lake County holds on properties seized due to outstanding property taxes. One article focuses on a son who purchased properties owned by his father, who was seeking to sell the land to a company tied to Spectacle Entertainment.

The son’s purchase would clear the property from its tax claim, the article stated. Other parcels were purchased by another individual, who then gave them back to the father.

Spectacle Entertainment has a letter of intent with Hard Rock to build a $300 million casino in Gary, and the Times indicated the land is in the area where the casino will be built.

In another article, the Times reported the attorney for the Gary City Council, who also serves as a consultant to Spectacle, has acquired “hundreds of tax delinquent properties” in Gary, with some of the parcels close by the proposed casino site.

The paper also reported that the attorney also performed title work for the father’s company.

In the statement, Hard Rock said it was aware of the recent articles, which were “incorrectly associating” it with the people tied to the allegedly improper sales.

Hard Rock has built a vast portfolio of gaming licenses in multiple states and countries around the world, due to adhering to our company values of honesty and integrity,” the statement read. “While Hard Rock has no relationship with the individuals identified, we have turned this over to the Hard Rock Board compliance committee for further due diligence. We intend to proceed with the proposed site in Gary as we always have, by adhering and upholding only the highest standards and principles in our business dealings.”

The planned Hard Rock Casino would replace the Majestic Star casino riverboats in Gary. Last week, the Indiana Gaming Commission (IGC) approved the plan to move the casino to a land-based site.

Attorney: Spectacle in the Clear

“All our dealings have been upfront, and we look forward to closing on the real estate,” John Keeler, Spectacle’s vice president and general counsel, told Casino.org Thursday.

Keeler said that Gary has a large number of abandoned homes and other vacant property with outstanding taxes the county has claimed. In some cases, speculators have acquired properties at tax sales, only to lose the property when they do not pay taxes.

Those speculators, Keeler said, end up recruiting a family member or using a related entity to reacquire the property. He noted Spectacle has encountered that as it tries to accumulate the property needed to build the casino.

“It’s just a game that keeps getting played up there over and over again,” Keeler said.

Project Moving Forward

Keeler said he was not aware of any reason why the matter would delay Spectacle and Hard Rock signing a formal agreement on the project.

We have a letter of intent with Hard Rock,” he said. “We still are in the process of negotiating and working out definitive documents.”

While the IGC voted to approve the move last week, the inland move won’t become effective officially until the first $4 million installment of the $20 million relocation fee is paid, Keeler said. Per the IGC order, that payment is due 15 days following the approval, which occurred on Aug. 28.