Tribal gaming board settles litigation involving unbuilt casinos in Lansing, Romulus
LANSING — A tribal gaming board said it has reached a settlement with its former development partners after years of litigation over unbuilt casino projects in Lansing and Romulus.
The agreement resolves claims against Kewadin Casinos Gaming Authority − the gaming board of the Sault Ste. Marie Tribe of Chippewa Indians − by JLLJ Development and Lansing Future Development II, the gaming authority said in a news release.
Kewadin said it will pay the companies a total of $25 million by April 12. The agreement also stipulates that Kewadin will pay up to $10 million from the proceeds of its malpractice claim against its former law firm, Patterson, Earnhart, Real Bird & Wilson LLP, of Louisville, Colorado.
If Kewadin is unsuccessful in its suit against the law firm, Kewadin will pay its former development partners an additional $5 million in place of the $10 million, the gaming board said.
Attorneys for the development companies could not immediately be reached for comment on Friday.
The settlement is a fraction of the $88.8 million in damages Ingham County Circuit Judge Joyce Draganchuk awarded to the Lansing and New Boston development companies early this year in connection with unbuilt casinos in Lansing and Huron Township, near Detroit Metro Airport.
The development companies obtained a temporary restraining order against the tribe, citing a resolution the tribe adopted in an effort to shield itself from financial liability from court judgements. A lawyer for the tribe said it would do nothing illegal to hide its assets.
Kewadin Casinos General Counsel Aaron Schlehuber said the deal also heads off a lengthy appeals process.
“This agreement allows Kewadin to move forward and now focus 100% of its efforts on providing the best entertainment services possible to the areas we serve,” Schlehuber said in the release. “Casino revenues contribute significantly toward the services the Sault Tribe provides to its members, including health care and cultural programs, so this settlement ensures that the casino will continue to have the resources to maximize our operations and continue serving the community.”
Patterson, Earnhart, Real Bird & Wilson LLP had been general counsel for Kewadin Casinos and the Sault Tribe since June 2020, Kewadin said in the news release. The malpractice suit contends the firm failed to properly defend Kewadin in the ligation, resulting in a default judgement.
“The default judgment caused by the Patterson firm has severely impacted the reputation of both Kewadin Casinos and Sault Tribe, and it’s important that they are held into account for the $88 million in damages against us,” Schlehuber said.
The litigation focused on whether the Sault Tribe was contractually obligated to pay developers for casinos that where never built. The Sault Tribe planned to build a 125,000-square-foot, $245 million casino in Lansing a decade ago. It also planned to open another casino near Detroit Metro Airport in Romulus.
Neither project broke ground. The federal government denied the tribe's request to take the land into trust, a move necessary for off-reservation ventures. A federal judge later upheld the government's decision.
The gaming authority's original obligation under the court ruling, including $9 million in loans from the developers, interest and loss of potential future profits, included $60 million for the casino near Metro Airport and $28.8 million for the unbuilt casino in Lansing.
The development companies sued the gaming authority for breach of contract in 2021, saying they had given the gaming authority money for fruitless ventures.
Online court records indicate Draganchuk granted a motion to stay proceedings this week, but it was unclear whether the settlement agreement had been filed with the court.
Contact Ken Palmer at kpalmer@lsj.com. Follow him on Twitter @KBPalm_lsj.
This article originally appeared on Lansing State Journal: Sault tribe gaming board settles lawsuit over unbuilt casinos in Lansing, Romulus
