La Crosse Tribune: Taking a gamble: The makings of a $50 million deal

Just hours before plans for a $50 million casino in the city of La Crosse were announced, Mayor Patrick Zielke discussed the idea with tribal leaders for the first time.

Zielke said last week he had not discussed plans for a casino at the La Crosse Holiday Inn with Lac du Flambeau Chippewa tribal representatives in advance of a meeting on Jan. 4. The deal was announced later that day at a news conference in City Hall.

The mayor also had no preliminary discussion with the Alden Group of Denver, developers joining the tribe in the proposed venture, but said company president Al Salazar called him the day before to set up the meeting.

Zielke attended the Jan. 4 meeting without any other city officials present.

"I met with the Alden people and the tribal people," Zielke said. "They set up the meeting with the tribe."

Zielke said he decided not to invite any other city officials so that blame, if any, would be solely on his shoulders.

"If I go in there alone, it's my fault. I'll take the blame," he said.

The casino project--with a price tag of $30 million to $50 million--would include 750 slot machines, 40 to 60 blackjack tables and would employ 1,000 people, pumping $250 million annually into the La Crosse economy, the developers said.

Prior to the Jan. 4 meeting, in private sessions the week before Christmas, developers met one-on-one with most La Crosse Common Council members at the Bluffs Country Club to outline the project.

Those meetings were attended by Salazar, Kurt Swartz, general manager of the club, and Richard Keegan, vice president of Alden. In addition to operating the Holiday Inn, Alden leases the country club from the city and operates it.

Zielke said negotiations were held between Alden, a development and investment banking company, and the Lac du Flambeau before Zielke was contacted for a meeting in his office.

A check of Zielke's office telephone records showed he had not called tribal officials during 1994, at least from his office phone. There also were no calls to Denver, and only one call to Gov. Tommy Thompson. It could not be determined if Zielke had any private line contacts with Thompson, or if he received incoming calls from Thompson or tribal officials.

Zielke has refused to say whether he discussed the casino proposal with Thompson before announcing the plans. Thompson, who is on the record opposed to expanded Indian gaming, must agree to the project, along with the Bureau of Indian Affairs and the U.S. Secretary of the Interior.

Zielke said he had discussed the casino idea periodically with Alden officials during talks about the country club lease, but he did not have advance discussions with Alden officials until just before Jan. 4.

Zielke said he told the two groups they would need council approval to receive city endorsement of the casino.

"My message to them was 'you have got to talk to the council members,' and they understood that," the mayor said.

While the purpose of the Jan. 4 meeting was to discuss concepts and define efforts to mobilize city support, Zielke said one commitment was made.

"We're not going to pay for any of the infrastructure," he said. Zielke said the tribe and developers agreed to pay for all costs of the project, including reimbursement for taxes, since Indian land is tax-exempt.

Keegan said 15 of 17 La Crosse council members attended the private briefings in December, but that Marlin Frick and Gene Strittmater did not.

Council members Doug Farmer did not go to the Bluffs, but Alden officials stopped at the Bank of Holmen where he works.

"I refused to go. I have other things to do at Christmas time," Farmer said. "There was a two-minute briefing in the lobby of the bank."

Farmer said Salazar and other Alden representatives did not ask for a commitment, but simply told him what they wanted to do.

Council president Roger Plesha said developers wanted to get an idea of whether council members liked the idea. "They were basically showing the casino plans and drawings. There's a lot of hoops to go through."

Council member Donald Medinger said he was happy to attend a meeting at the country club.

"I grabbed the opportunity because I had never been out there before," he said. "We sat down over coffee and they told us what it was all about."

Strittmater said he did not feel he should attend.

"I said I would rather see it out in the open," Strittmater said.