Why a casino developer got a break on rent

The City Council voted 6-0 Tuesday to reduce the rent for a casino developer who is leasing property in the Gulfport Harbor.

Councilman Ricky Dombrowski was not present for the vote.

Developer Robert Lubin, who wants to build a casino at the harbor, brought out colorful renderings of the project to show the City Council in executive session and asked for the $80,000 monthly rent for the site to be halved for August and September.

“It’s a two-month rent reduction only,” said the Virginia-based attorney, who is part of Gulfport Gaming Development.

The request was made under the name of Mississippi Coast Entertainment LP, which Councilwoman Cara Pucheu questioned.

All the other terms of the contract were extended four months.

Lubin didn’t stay for the vote that came near the end of the regular meeting, but he did talk about his other successful projects and his plans for the Gulfport casino, which he hopes to have open in 2018.

He said it will have very high ceilings, impressive escalators, colored lights, a swimming pool and great views of the water. The parking garage will be built west of the casino and have a large mural that can be seen from the pool, he said, instead of a view of the neighboring port.

He estimates the resort will cost $140 million to $160 million and said he went back over those cost estimates when people questioned how it can be built to Mississippi Gaming Commission specifications at that cost.

Scarlet Pearl Casino in D’Iberville, the only casino built since the new requirements for a 300-room hotel and other amenities were imposed, cost $290 million.

Lubin said he’s built other hotels and projects. “I don’t understand for the life of me how they spent so much money,” he said.

Under the 60-year lease with the city, the developer is required to pay $80,000 a month to Gulfport and the other two landowners until the casino opens. Lubin said he asked for the rent to be reduced for August and September until it becomes clear whether the federal EB-5 Visa program will be renewed.

The EB-5 program is how Lubin and his business partner, Kevin Preston, plan to raise the money to build the Gulfport casino. It allows foreigners to secure permanent residency in the United States in exchange for investing in projects in the U.S. The minimum investment is $500,000, Lubin previously told the Sun Herald, and he would need 120 to 140 investors.

The deadline is Sept. 30 for Congress to extend the program, and Lubin said he believes it will be extended until the new administration comes in and changes the requirements.

“It’s critical to me that this program be extended at least six months,” he said.

If the program isn’t renewed, he said, he would have to find another way to fund the casino.

Councilman R.Lee Flowers said the reduced rent and extension of the contract by four months will give the developers four months longer to recruit participants into the program.

“Of course, if the government says it’s out of the EB-5 business, who knows what will happen?” Flowers said.

http://www.sunherald.com/news/business/casino-gambling/article100201672.html

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