Minneapolis casino could block similar plan for Duluth's Canal Park

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Developer Bob Lux has been traveling the state, working to drum up support for a proposed casino in the 600 block of Minneapolis’ Hennepin Avenue, also known as Block E.

Lux’s campaign took him Thursday to Duluth, where he made a case for the project as a means to finance a new Vikings stadium in Minneapolis.

Ironically, Lux’s visit came on a day when a stab-in-the-dark proposal to put the Vikings stadium in Duluth was floated in St. Paul.

Dan Russell, executive director of the Duluth Entertainment Convention Center, has suggested that if the Block E casino development receives legislative support, it could open the door for other communities to follow suit. The DECC already has identified a piece of Canal Park property that could be developed into a casino with parking tucked beneath it.

“We don’t want to get ahead of the community, but if something happens in Minneapolis that presents us with a similar opportunity here, we want to be prepared,” Russell said.

Lux, however, suggested that if the Block E casino moves ahead, it would probably rule out similar projects elsewhere in the state for the next decade or two.

“If the Legislature is concerned about multiple new facilities popping up across the state, this will not happen,” he predicted.

Lux explained that if Minnesota were to bond for a new $650 million stadium and use the revenues it receives from a Block E casino to pay it off, the buyer of those bonds would almost certainly require a guarantee that casinos would not be allowed to proliferate across the state until it had been repaid.

Lux said this 10- to 20-year exclusivity period probably would be a key provision necessary to make the plan acceptable to American Indian tribes, as well.

“Without the support of the tribes and labor, this won’t happen,” he said.

Lux said unions already have lined up in favor of the project, which stands to create a projected 2,500 full-time jobs with a total annual payroll of about $100 million.

As for tribal support, Lux suggested the proposed casino might offer an attractive way to limit the state’s entry into broader gambling activities.

Karen Diver, tribal chairwoman of the Fond du Lac Band of Lake Superior Chippewa, was unavailable for comment Thursday afternoon. However, she has been critical in the past of the idea of Duluth opening a Canal Park casino to compete with the band-owned Fond-Du-Luth Casino.

The city of Duluth and the Fond du Lac Band remain at odds over a casino profit-sharing agreement that recently was struck down in court.

Lux said the proposed Block E Casino is not expected to eat into the profits of existing tribal gambling operations, with the sole of exception of Mystic Lake Casino, 25 minutes away from Minneapolis. There, he projects the impact would be less than a 10 percent reduction in business.

In Duluth, however, he noted that a Canal Park casino would be in much closer competition with the existing Fond-du-Luth Casino.

Tribal casinos could petition to have any new games introduced at the Block E casino included in their own operations, if the development comes to pass, Lux said. He said this could open the way for Indian casinos to add roulette wheels and craps tables to their operations.

Lux said research indicates that tribal casinos probably could boost gaming revenues by 3 percent to 8 percent as a result.

Gregg Peppin, a political strategist working with Lux, said he considers it highly unlikely that the Block E casino would advance in tandem with any project other than the Vikings stadium. He suggested any attempt to tie a casino in Duluth to the Block E proposal would meet with opposition.

“If there finally is an agreement on Block E, my guess is that labor and the tribes would work to push off any other sea lampreys that anyone tried to attach to the project,” Peppin said.

Should the project win legislative support, Lux said the $450 million development will be built exclusively with private money.

Projections show the casino could draw 5.6 million people a year through its doors. The state’s anticipated annual take from the operation would be about $105 million, which Peppin said should be more than enough to service the debt on a $650 million stadium.

Bills have been introduced in the Minnesota House and Senate that would authorize the state lottery board to open a casino in Block E, but Lux isn’t expecting a cakewalk through the Legislature.

“We’re not naïve,” he said. “This is a heavy lift.”

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