Making the News

Press of Atlantic City

Originally Published:Tuesday, November 10, 2009
http://www.pressofatlanticcity.com/news/top_three/article_134c1db6-528b-5a2a-b448-f40dc0af7386.html

Pinnacle CEO resigns following alleged confrontation over St. Louis casino

By Donald Wittkowski
Press of Atlantic City

ATLANTIC CITY - The Pinnacle Entertainment Inc. CEO who imploded the Sands Casino Hotel two years ago to make room for a proposed $1.5 billion megaresort - only to halt the project later on - abruptly resigned from the Las Vegas-based gaming company.

Dan Lee stepped down as Pinnacle's chairman and chief executive officer on Monday, less than a week after he allegedly tried to threaten a St. Louis official over a rezoning plan in favor of another casino company.

Lee allegedly was upset when St. Louis County Councilman Steve Stenger voted for the zoning request for a casino by North County Development. He reportedly tried to confront Stenger after the vote Nov. 3 and told Stenger's assistant that Stenger had "just made the worst move in his political career."

The Missouri Gaming Commission is investigating the incident. Pinnacle owns two casinos in downtown St. Louis, Lumiere Place and the President, and is building the $350 million River City Casino in St. Louis County in Stenger's district. North County Development also has plans for a casino in St. Louis County.

In announcing Lee's resignation, Pinnacle would only say in a statement that he had left "to pursue other business interests." Company officials declined to elaborate.

Meanwhile, debate continues in Atlantic City over what to do with the sprawling dirt lot Lee created by imploding the old Sands casino in October 2007. Lee proposed building a Las Vegas-style resort in place of the Sands, but Pinnacle put the project on hold in 2008, citing the recession and global credit crisis.

"Obviously, with 20-20 hindsight, I wish we didn't buy the land in Atlantic City," Lee told gaming analysts in a conference call last March that represented his last extensive public comments about the project.

Pinnacle bought the Sands for $270 million in 2006 from billionaire Carl C. Icahn. The casino, after a 26-year run, was closed in November 2006 as plans unfolded then for Pinnacle's project.

Pinnacle spokeswoman Pauline Yoshihashi said Lee's resignation would not change Pinnacle's plans for the Atlantic City casino. For now, the project has been mothballed.

"It is unchanged. That has not been affected, as is true with our other developments," Yoshihashi said.

With work on the project coming to a halt, Pinnacle's site is little more than a dirt lot overlooking the Boardwalk in the center of town. Frustrated that such a prominent spot has become an eyesore of overgrown weeds, city officials have been discussing plans for possibly transforming the site for parking or other uses.

"We have some ideas we are kicking around," said Kevin Hall, a spokesman for Mayor Lorenzo Langford. "Quite frankly, this is an ongoing situation."

Hall stressed that the mayor ultimately wants to see a casino developed on the site. In the meantime, options will be considered to help cover up the blight, he added.

Kim Townsend, chief executive of Pinnacle's Atlantic City operations, confirmed that the company has been discussing possibilities for the land, including a parking lot. She expressed hope that a decision could be made soon, so that any work could be completed in time for the city's peak summer tourist season.

"Clearly, there is no reason to do it at the last minute," Townsend said.

While the site's short-term development may bring a parking lot, long-term plans remain in favor of a casino. One gaming analyst said that Lee's resignation does not necessarily mean the proposed casino is dead.

"I still look at that piece of ground as an opportunity for the future of Atlantic City," said Harvey Perkins, a senior vice president for the Linwood-based casino consulting firm Spectrum Gaming Group.

Contact Donald Wittkowski:

609-272-7258

[email protected]

 

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