A developer bets on Florida fortune

Baltimore's Cordish Co. could rake in more than $1.3 billion through an exceptional casino deal with the Seminole Tribe.

March 14, 2004|By Robert Little and Mike Adams | Robert Little and Mike Adams,SUN NATIONAL STAFF

HOLLYWOOD, Fla. - The peaks and depths of James E. Billie's life are evident in the hardened creases of his nine fingers. He wielded astonishing power during his 22 years as chief of the Seminole Tribe of Florida - nose-diving in the tribe's private jets, touring with his band and building the Seminoles into one of the most influential and flamboyant tribes in America. Billie's other finger, a small remittance for his lifestyle, was bitten off while wrestling alligators at the tribe's safari park in the Everglades.

The rewards of Billie's reign are legendary on the Hollywood reservation. Shortly after being elected as the tribe's chairman in 1979, he defied Florida's $100 limit on bingo jackpots and opened the nation's first high-stakes Indian bingo hall, bringing unimaginable riches to a tribe that lived precariously in sawgrass swamps only a generation ago. That first Indian gambling center became the foundation for a $15 billion-a-year industry that has exploded nationwide and made gambling tycoons out of dozens of tribes across the country - few more so than the Florida Seminoles.

But the mighty Seminole chief was ousted by the tribal council just as he was completing his most ambitious and potentially profitable undertaking yet - a $455 million deal to build two glistening Hard Rock hotel casinos, one in Hollywood and another outside Tampa.

The details of Billie's downfall form a high-stakes saga replete with allegations of greed, treachery and deceit.

Just as spectacular and intriguing is the potential fortune that awaits the man who struck that final deal with Chief Billie - renowned Baltimore developer David S. Cordish.

The privately held Cordish Co., which helped reshape Baltimore's Inner Harbor and is one of the most acclaimed commercial developers in the country, is positioned to collect more than $1.3 billion worth of the tribe's gambling revenue during the next decade, according to an analysis of the company's contracts with the Seminole Tribe and other public financial documents.

Having followed through on Billie's vision to replace two dank, smoky, yet wildly profitable Florida casinos that the tribe has long operated, the Cordish Co. - a firm with no background in casino development and no prior history of navigating the delicate and often perilous world of tribal gambling - could soon become one of the highest-paid developers in the history of Indian gaming.

The small, family controlled development firm, in which David Cordish serves as president and chairman, put up $40 million of its own money to close the Hard Rock deal. The company also agreed to finance a retail and entertainment complex, attached to the Hollywood casino, that Cordish says will cost $80 million.

Then the Cordish Co. pieced together a project that is regarded by some gambling experts as one of the most daring and innovative Indian gambling deals ever struck. It is the first Indian casino project subsidized by American taxpayers, according to the Internal Revenue Service - financed with tax-exempt municipal bonds. According to the correspondence of lawyers who worked on the deal, it was drafted so that it would not be subject to federal gambling regulations that would have restricted the developer's share of the profits.

The Seminole casino near Tampa opened fully on Thursday and will be followed within months by the complex in Hollywood. Cordish calls them the first of many casino projects his company hopes to develop around the country - perhaps even in Maryland, if the politics and the financing fall into place.

"It's the proudest accomplishment in the 90-year history of the Cordish Co.," he said Thursday in the lobby of the Tampa hotel, shortly before a gala event featuring a ceremonial guitar-smashing and a team of skydiving Elvis impersonators. "Of all the successes we've had, this one had the most obstacles to overcome, the most doubters that said it could not be done. It's turned out beautifully. And it's for a wonderful group, the Seminoles."

Risk and reward

More accustomed to working with city councils, Cordish took on what he termed "enormous inherent risks," such as doing business with one of the nation's more colorful and controversial Indian tribes - a group with a history of wild spending and troublesome business deals.

In return, Power Plant Entertainment LLC, a subsidiary of the Cordish Co., will receive nearly 30 percent of the casinos' profits for 10 years, according to the company's contracts with the Seminoles, copies of which were obtained by The Sun.

Based on revenue estimates released to potential investors, and using calculations verified by Loyola College accounting professor Jalal Soroosh, that slice of gambling revenue is expected to approach $120 million in the first year alone - equal to all the money the Cordish Co. says it is risking on the project. Earnings during the next nine years would total 10 times that.

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