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Finance committee reviews plan to pledge wagering-tax revenue for Lake County convention center
Summary
City controller Celita Green told the Gary City finance committee the city would pledge $5 million in wagering-tax revenue to back bonds for a $10 million Lake County convention center project, with $1.5 million reimbursed by Hard Rock and the city ultimately responsible for $3.5 million. Public commenters asked that the reimbursement be memorialized in writing.
Councilwoman Linda Barnes Cwell opened the Gary City finance committee meeting on Tuesday and introduced CPO 20267, an ordinance authorizing the city to negotiate documents related to development and financing of a Lake County convention and event center. City controller Celita Green presented the proposal and outlined how the city would structure its participation.
"The city's providing $5 million of its wagering tax off the top," Celita Green, city controller, said, adding that the project totals $10 million with $5 million from the state and $5 million from the city. Green said the city is ultimately responsible for about $3.5 million, with $1.5 million reimbursed by Hard Rock, and that IFA recommended pledging the full $5 million to secure a higher bond rating.
Why it matters: The plan would use future casino (wagering-tax) receipts to secure bonds for the convention center rather than relying on property taxes, and officials said pledging the larger, more secure revenue stream should improve bond pricing. Green said the wagering-tax cap the city currently receives is about $12.2 million annually.
Public commenter John Allen asked the council to require a written commitment from the casino for the $1.5 million reimbursement rather than relying on an informal agreement. "We would like some memorialized from the casino regarding the reimbursement since it's a change," Allen said, noting that the city already has obligations against some casino revenues and that diverting up to $5 million could reduce funds otherwise available for city services if revenues decline.
Councilman Kenneth Wington addressed questions about lease authority and governance documents, saying the city's role will be limited to a set of financial and governance agreements. "It states in the ordinance: a governance agreement between the IFA, RDA and the city; a revenue deposit agreement with deposit trustee; a master lease agreement between the RDA and the city; and underlying lease agreements," Wington said, adding he did not believe the council would have authority to sign typical vendor leases beyond those documents.
Green said the ordinance before the committee authorizes administration to negotiate and finalize documents; the final legal opinion will be issued when bonds are sold. No formal vote on CPO 20267 was recorded in the transcript. The ordinance as presented would allow the administration and mayor to execute documents once the RDA and IFA move to issue bonds.
