LANSING – The gaming board said it has reached a settlement with its former development partners after years of litigation over the construction of casino projects in Lansing and Romulus.
The agreement against the Kewadin Casinos Gaming Authority of the Sault Ste. Marie Tribe of Chippewa Indians through JLLJ Development and Lansing Development Future II, game officials said in a news release.
Kewadin said it will pay the company a total of $25 million as of April 12. It also agreed that Kewadin will pay up to $10 million from a malpractice claim filed against its former law firm, Patterson, Earnhart, Avis Real & Wilson LLP. , of Louisville, Colorado.
If Kewadin is unsuccessful in its lawsuit against the law firm, Kewadin will pay its former development partners an additional $5 million instead of $10 million, the gaming board said.
Representatives for the development companies could not immediately be reached for comment Friday.
The settlement is a fraction of the $88.8 million in damages awarded by Ingham County Circuit Judge Joyce Draganchuk to Lansing and New Boston development companies earlier this year in connection with casinos opened in Lansing and Huron Township, near Detroit Metro Airport.
The development companies obtained a temporary restraining order against the tribe, a proposal the tribe used in an attempt to protect itself from monetary judgments. A lawyer in the tribe said that it is not allowed to hide their assets.
Kewadin Casinos General Counsel Aaron Schlehuber said the deal is still far ahead of the appeals process.
“This agreement allows Kewadin to move forward and now focus 100% of its efforts on providing the best hospitality services to the areas we serve,” Schlehuber said in the release. “Casino revenues contribute significantly to the services the Sault Tribe provides to its members, including health care and cultural programs, so this combination ensures that the Casino will continue to have the resources to expand our operations and continue to serve the community.”
Patterson, Earnhart, Avis Real & Wilson LLP had been general counsel for Kewadin Casinos and the Sault Tribe since June 2020, Kewadin said in a news release. The malpractice suit alleges the firm failed to properly defend Kewadin in the lawsuit, resulting in a default at trial.
“The default judgment made by the Patterson firm severely impacts the reputation of both Kewadin Casinos and the Sault Tribe, and it is significant that they have been awarded $88 million in damages against us,” said Schlehuber.
The lawsuit focused on whether the Sault Tribe was contractually obligated to pay for casinos that were never built. The Sault Tribe planned to build a 125,000-square-foot, $245 million casino in Lansing a decade ago. He also plans to open another casino next to the Detroit Metro Airport in Romulus.
Neither side is holding ground. The federal government refused the tribe’s request to take the land into trust, a move necessary for off-site conservation. A federal judge later accepted the state’s decision.
The gaming authority’s original obligation under the court ruling, including $9 million in loans from developers, interest and potential loss of future profits, includes a $60 million casino at Metro Airport and a $28.8 million casino in Lansing.
Development companies have sued the gaming authority’s contract through 2021, saying they have given money to the gambling authority’s unprofitable ventures.
Online court records indicate that Draganchuk’s motion for a stay was granted this week, but it was unclear whether the agreement was filed when the court filed it.
Contact Ken Palmer email@example.com. Follow him on Twitter @KBPalm_lsj.