Hard Rock Fight In Florida

Developers Power Plant and Cordish, which built two Hard Rock Hotel & Casino complexes for the Seminole Tribe of Florida, is asking a federal court to dismiss the tribe’s lawsuit to void their financing agreement.

The motion, which was filed July 15th, stems from a conflict that began last October. The Seminoles came under fire from the IRS for building the complexes with tax exempt bonds, according to The Baltimore Sun. The tribe in turn tried to end a 10-year contract with the developer who initiated the deal, David Cordish, and subsidiary Power Plant Entertainment.

The developer arranged financing for the Seminole Hard Rock Hotel & Casino complexes in Tampa and Hollywood, Fla., the Sun said. The operations, which opened in May 2004, are the first Indian hotel and casino complexes to use tax-exempt government bonds as part of their financing, according to the paper.

The casinos have netted more than $1 billion in profit for the tribe and more than $310 million for Power Plant and Cordish, according to court records. The tribe claims the financial agreement is “illegal and unconscionable” and that payments amount to nearly 30 percent of the casinos’ net worth.

Power Plant attorneys argue that tribal leaders knowingly entered into the agreement and stand to make $17.5 billion over the lifetime of the various deals which run between 10 and 25 years. Cordish’s company helped secure the $400 million in bonds that were needed to build the casinos, attorneys said.

“The tribe has realized colossal benefits. The two Hard Rock projects are the most profitable hotel/casinos in the United States (earning $500 million in profit annually),” Power Plant attorney Marty Steinberg wrote in court papers. “Apparently, $17.5 billion is not enough for the tribe, and its astonishing greed prompted it to file this lawsuit. … The Court cannot permit the tribe to take advantage of its inequitable, unfair and deceitful conduct.”