Senate committee keeps Harrah's new deal alive - with big changes

BATON ROUGE, La. (AP) - - Harrah's officials are reviewing a new deal that will cost them hundreds of millions more but keeps their request for a lease extension alive.

The approval in Senate committee came over fierce objections from opponents who believe the state has not thoroughly analyzed the deal, and that there may be conflicts of interest among some involved. It was a deal that was ushered through the House by the speaker but had been stalled in the Senate for weeks until today.

"My employees deserve the assurance that their jobs will be here in eight years," said Harrah's General Manager Dan Real.

Harrah's put it's  best foot forward in Senate committee, hoping to resurrect a new long-term deal so they could begin construction on a  new $350 million hotel.

"The jobs are something we cannot ignore, and that's why I ran to make economic opportunity for all our citizens." said New Orleans City Councilman Jay Banks.

Opponents criticized the deal, accusing the state of not doing it's homework.

"We've seen this operator, bankrupt twice, cut their payments to the state from 90 to 60 (million dollars per year). If there's a new bill, would someone inject performance standards?" said casino deal opponent Randy Waesche.

After often intense debate, Sen. Gary Smith offered nine amendments that would cost Harrah's an additional $40 million a year while forcing them to spend money for the hotel within six years. And if the casino were to sell to a real estate investment trust, or REIT, the state would get more money.

"If the REIT, or sale of this casino takes place, there would  be a $40 million payment to the state and city, 75% state, 25% to the city," said Smith, D-Norco.

The bill passed with four yays and three nays, with Sen. J.P. Morrell voting no. He and other lawmakers were recently highlighted in a Lee Zurik  investigation which pointed out that Morrell works in a law firm headed by Harrah's lobbyist Ira Middleburg. On Monday, Morrell accused opponents of conflicts, too.

"Mr Ducote, you have a financial relationship. Mr Sherman, has a financial relationship. I have been bombarded by registered and unregistered lobbyists," said Morrell, D-New Orleans.

"All we're looking for is a scenario that's fair, but you don't have the proper analysis to make a decision," said casino deal opponent Joe Jaeger.

Some question whether Harrah's can live with the new deal.

A Harrah's spokesman said they're pleased the extension bill is still alive, but they're reviewing the terms.

Harrah's said if the deal goes through, the new 350-room hotel could bring 900 additional jobs.

The Senate revenue committee will consider the new deal tomorrow, and if it passes, the full Senate could get the bill before the end of the week. It would also need to be approved by the state Gaming Control Board and the City of New Orleans.

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