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There has been one development in the Harrah's situation since the company filed for Chapter 11 protection earlier in the week. Ronnie Larmarque, one of the nine local Jazzville partners and car salesman extraordinare, announced yesterday that the Jazzville group was prepared to make a proposal to Harrah's and the casino board to sub-lease the temporary casino from Harrah's and re-open it before Christmas. The T-P reported that the partners will all put up as much money as they can, then Louie Roussell, III (who is a Jazzville partner and former owner of the Star Casino) would make up the difference to get $40 million. The theory is that without all of the debt that Harrah's took on, the temporary casino should be able to make a profit. Roussell already has a credible track record with the Star, so if anyone can make a go of it, his people should be able to.
What makes this development extremely interesting is the fact that the Jazzville group are part of Harrah's Jazz, which is now bankrupt. These nine folks were unable to come up with the $33 million that was required of them to maintain a full 1/3 share of the casino corporation. This became quite a concern for many, because without the Jazzville partners in the picture, the casino would have no local ownership. The original Jazzville structure was ten local investors and Harrah's. One local investor pulled out because it was doubtful he would pass the background checks required by the casino board. This arrangement was amended to include Christopher Hemmeter, since he had the lease on the Rivergate site from the city. When Hemmeter's riverboat, the Grand Palais, went belly-up, Harrah's and Jazzville had to pick up the slack and put up additional capital. Jazzville didn't do this, and Harrah's agreed to reduce the local interest from 33% to 14%. Now the guys who couldn't come up with the money eight weeks ago say they have $40 million to re-open the casino on their own. Casino commission member Fred Cassibry (who is a former federal judge, and has a tendency to speak his mind openly) remarked today that he was very, very skeptical of Lamarque's announcement.
On another front, New Orleans City Councilwoman Peggy Wilson suggested Wednesday that perhaps the requirement that riverboat casinos actually leave the dock and cruise the waters be lifted on a temporary basis. The riverboats have always said that they can make more money (and employ more people) if they stay dockside. Wilson feels that letting the boats stay tied up will allow them to hire on some of the 2,000 Harrah's employees that have been laid off. The state police aren't overly interested in changing their stance on the sailing requirements, since they've been battling the boats left and right as it is to get them to leave the dock. Orleans Parish District Attorney Harry Connick also has come out opposing this idea. What makes the whole thing curiouser and curiouser is that Mrs. Wilson has been the most anti-gambling person on the city council since the whole thing started.
More to come, no doubt.
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