A protracted dispute between Kewadin Casinos Gaming Authority and two of its former development partners has been settled. Kewadin, which is the gaming arm of Sault Ste. Marie Tribe of Chippewa Indians, announced that it will pay $25 million to the two development partners that invested in planned casinos in New Boston and Lansing that were never built.
Kewadin will also pay up to $10 million to a Colorado law firm that was embroiled in the legal action that dragged on for more than a decade. In 2011, Kewadin received $9 million from JLLJ Development LLC and Lansing Future Development II LLC for two proposed casinos in Michigan.
Kewadin had initially been ordered to pay $88.9 million
When Kewadin failed to secure federal authorization for the off-reservation projects, the development companies filed separate lawsuits. Following years of appeals ad counter-suits, in January, Ingham County Circuit Court Judge Joyce Draganchuk ruled that the two development companies were entitled to a total of $88.9 million in damages.
The Sault Ste. Marie based tribe planned a $245 million casino/resort in Lansing, and a smaller site in New Boston, just south of Romulus.
A lawyer for the Sault Ste. Marie Tribe of Chippewa Indians said in a statement that the settlement amount “represents nearly a 75% reduction from the $88 million in damages Ingham County Judge Joyce Draganchuk had previously ordered.
“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.”
Cost of more appeals led to quick Kewadin settlement
In an open letter from Sault Tribe General Counsel Aaron Schlehuber to tribal members explained the quick decision to settle the dispute, and defended the tight-lip nature of the negotiations.
“Typically, on an issue as impactful as this we would want to allow for ample opportunity for member input,” Schlehuber wrote. “The reality is sometimes litigation and business matters do not mesh well with the goal of transparent governance and constituent dialogue. This, unfortunately, is one of those times.”
The tribe estimated that it would cost $15-25 million to continue further appeals, which justified the settlement, even though tribal leaders “were very much looking forward to setting the trial judge straight on a number of matters in the appeals court.”
The Sault Ste. Marie Tribe of Chippewa Indians owns and operates five Kewadin Casinos in the Upper Peninsula of Michigan. The casinos are located in Christmas, Hessell, Manistique, Sault Ste. Marie, and St. Ignace.
With more than 2,000 slot machines, as well as blackjack, roulette, craps, keno, and bingo, the casinos are the largest gaming operations in the UP of Michigan.