St. Louis might not have lost its gamble to award a downtown casino license to Pinnacle Entertainment in 2004—but the huge payoff first promised when the complex opened in December 2007 now seems like a long shot.
Pinnacle announced Monday that it plans to sell Lumiere Place Casino and the Four Seasons Hotel St. Louis as part of a deal to purchase Ameristar Casinos. Ameristar has a casino in St. Charles, while Pinnacle also owns River City Casino in south St. Louis County.
The Federal Trade Commission, sticklers for “the house” not owning too much of any one territory, said no dice to Pinnacle’s attempted buyout of Ameristar, arguing that the resulting company would control too much of the St. Louis gambling market. To reach agreement, Pinnacle will sell the Lumiere facility. By making this choice, the international gambling conglomerate is announcing loud and clear that it no longer wishes to be part of downtown St. Louis.
Upon receiving the license in 2004, former Pinnacle Entertainment chairman and CEO Daniel Lee said the development would far outgrow the initial $500 million investment. “We want to create a new neighborhood in downtown and persuade people that it’s safe," he said in a press release at the time. "We believe that we can make 20 acres really terrific, so that people will want to come down for gaming, dinner, shopping, and even live here."
There was talk of condominiums in a high-rise tower and street level retail development. It never happened. In 2009, Lee suddenly resigned after making a spectacle of himself before and during a St. Louis County Council meeting.
Pinnacle also pledged to make $50 million in downtown investment when it received its license. Late last year, Pinnacle announced that it would donate: $6 million to the future National Blues Museum on Washington Avenue; $5 million to CityArchRiver for the Gateway Arch Grounds; a parking lot valued at $7 million to Great Rivers Greenway; and $500,000 ($100,000 a year) to the St. Louis Police Department for “supplemental police activities.” Pinnacle also invested $2.6 million in a building on nearby Cass Avenue and spent $2 million on casino parking lots.
Some quick addition shows that those investments come up far short of $50 million. But Rodney Crim, executive director of the St. Louis Development Corporation, said that was OK with the city. In the final accounting, investments by Pinnacle's "development partners" counted toward the $50 million total, and Pinnacle avoided a $1 million fine after negotiating this sweetheart deal.
There is no word if Pinnacle will still be responsible for the investment commitments once it does not own Lumiere Place. I doubt that the buyer will want to fulfill promises made by the former owner. I’m sure Crim will try to make that part of the deal to transfer the gaming license. Somebody’s bluff will get called.
I don’t gamble in casinos, but I hear the gaming floor of Lumiere is nice—although you can still smoke. I’ve dined at two of the restaurants, and they were fine. The Four Seasons is a first-rate hotel.
Who knows what will happen with a new owner? But a long-term relationship with Pinnacle was not in the cards, and downtown St. Louis will likely lose some chips as a result.
Commentary by Alvin Reid
