A developer bets on Florida fortune

Sun Staff

HOLLYWOOD, Fla. -- The peaks and depths of James E. Billie's life are evident in the hardened creases of his nine fingers. He wielded astonishing power during his 22 years as chief of the Seminole Tribe of Florida -- nose-diving in the tribe's private jets, touring with his band and building the Seminoles into one of the most influential and flamboyant tribes in America. Billie's other finger, a small remittance for his lifestyle, was bitten off while wrestling alligators at the tribe's safari park in the Everglades.

The rewards of Billie's reign are legendary on the Hollywood reservation. Shortly after being elected as the tribe's chairman in 1979, he defied Florida's $100 limit on bingo jackpots and opened the nation's first high-stakes Indian bingo hall, bringing unimaginable riches to a tribe that lived precariously in sawgrass swamps only a generation ago. That first Indian gambling center became the foundation for a $15 billion-a-year industry that has exploded nationwide and made gambling tycoons out of dozens of tribes across the country - few more so than the Florida Seminoles.

But the mighty Seminole chief was ousted by the tribal council just as he was completing his most ambitious and potentially profitable undertaking yet - a $455 million deal to build two glistening Hard Rock hotel casinos, one in Hollywood and another outside Tampa.

The details of Billie's downfall form a high-stakes saga replete with allegations of greed, treachery and deceit.

Just as spectacular and intriguing is the potential fortune that awaits the man who struck that final deal with Chief Billie - renowned Baltimore developer David S. Cordish.

The privately held Cordish Co., which helped reshape Baltimore's Inner Harbor and is one of the most acclaimed commercial developers in the country, is positioned to collect more than $1.3 billion worth of the tribe's gambling revenue during the next decade, according to an analysis of the company's contracts with the Seminole Tribe and other public financial documents.

Having followed through on Billie's vision to replace two dank, smoky, yet wildly profitable Florida casinos that the tribe has long operated, the Cordish Co. - a firm with no background in casino development and no prior history of navigating the delicate and often perilous world of tribal gambling - could soon become one of the highest-paid developers in the history of Indian gaming.

The small, family controlled development firm, in which David Cordish serves as president and chairman, put up $40 million of its own money to close the Hard Rock deal. The company also agreed to finance a retail and entertainment complex, attached to the Hollywood casino, that Cordish says will cost $80 million.

Then the Cordish Co. pieced together a project that is regarded by some gambling experts as one of the most daring and innovative Indian gambling deals ever struck. It is the first Indian casino project subsidized by American taxpayers, according to the Internal Revenue Service -- financed with tax-exempt municipal bonds. According to the correspondence of lawyers who worked on the deal, it was drafted so that it would not be subject to federal gambling regulations that would have restricted the developer's share of the profits.

The Seminole casino near Tampa opened fully on Thursday and will be followed within months by the complex in Hollywood. Cordish calls them the first of many casino projects his company hopes to develop around the country -- perhaps even in Maryland, if the politics and the financing fall into place.

"It's the proudest accomplishment in the 90-year history of the Cordish Co.," he said Thursday in the lobby of the Tampa hotel, shortly before a gala event featuring a ceremonial guitar-smashing and a team of skydiving Elvis impersonators. "Of all the successes we've had, this one had the most obstacles to overcome, the most doubters that said it could not be done. It's turned out beautifully. And it's for a wonderful group, the Seminoles."

Risk and reward

More accustomed to working with city councils, Cordish took on what he termed "enormous inherent risks," such as doing business with one of the nation's more colorful and controversial Indian tribes - a group with a history of wild spending and troublesome business deals.

In return, Power Plant Entertainment LLC, a subsidiary of the Cordish Co., will receive nearly 30 percent of the casinos' profits for 10 years, according to the company's contracts with the Seminoles, copies of which were obtained by The Sun.

Based on revenue estimates released to potential investors, and using calculations verified by Loyola College accounting professor Jalal Soroosh, that slice of gambling revenue is expected to approach $120 million in the first year alone - equal to all the money the Cordish Co. says it is risking on the project. Earnings during the next nine years would total 10 times that.

The total payment to the Cordish Co. would be one of the largest fees ever collected by the developer of an Indian casino - partly because the new Seminole casinos are projected to be highly profitable but also because federal law limits many such payouts to 30 percent of a casino's income for five years, or 40 percent for seven years in extraordinary circumstances.

Cordish said his company's contracts with the Seminoles are "right in the heart of the plate" when compared to other Indian gambling developments. "Everything has to go to Washington, has to be approved by the federal government, has to be within a parameter, and the rules are right there," he said.

Yet by signing on to the Seminole project strictly as a consultant and not a manager, the Cordish Co. struck a deal that was not subject to federal review and thus allowed it to be paid more of the tribe's gambling revenue than federal law would otherwise allow.

Tribal leaders say they are pleased with the Cordish Co.'s efforts.

"People always come behind and say, 'I could have done better.' Where were they when we needed them?" said Max B. Osceola Jr., a tribal councilman who answered questions briefly after the Tampa opening but declined to discuss specifics of the deal. "If we weren't happy with the terms, we wouldn't have them. It's as simple as that."

But some industry consultants say the Seminoles, with their experience in gambling operations, could have done better.

"These days, deals are down to maybe 20 percent, and that's for a management agreement where you actually run the casino and then get out in five or seven years," said Donald E. McGhie, an accountant and gambling consultant in Reno, Nev., who is a former chief operating officer at Bally's casino in Las Vegas. "I guess you have to look at it from the standpoint of somebody being smarter than somebody else."

Coconut Creek

Last year, federal regulators held that a 10-year, 35-percent deal that the Seminoles struck in 2000 with a developer who built a casino in Coconut Creek, Fla., violated federal law because the terms gave too much of the tribe's gambling revenue to a nontribal entity. Indian gambling rights are extended only to federally recognized tribes, and the Coconut Creek developer's profit-sharing agreement was deemed to be an illegal "proprietary interest" in an Indian casino.

The Coconut Creek developers allege in a federal breach-of-contract lawsuit filed against the tribe that their deal is substantially similar to the Hard Rock agreement. Cordish says the two deals are "as different as night and day," and asserts that his contracts are "federally approved."

An early version of the Cordish Co. deal was shown in 2000 to the National Indian Gaming Commission, the agency established by Congress in 1988 to regulate Indian-run gambling. Regulators told Cordish Co. officials how to amend the contracts so they would not meet the federal definition of a management contract, according to letters in 2002 and 2003 from the Washington law firm of Hobbs, Straus, Dean & Walker, which specializes in Indian affairs and was hired by the parties to the deal to evaluate the Cordish Co.'s contracts.

Regulators never determined whether the Cordish Co.'s fee - 30 percent minus an amount equal to one-fifth of the debt payments - constituted a "proprietary interest" in the casinos because the current fee arrangement was not included in those initial contracts. The deal was amended after regulators saw it, including an "extensive revision" to the method of calculating the Cordish Co.'s fee, according to one of the letters.

'A variety of issues'

Penny Coleman, the commission's acting general counsel who declared last year that the Coconut Creek deal was illegal, said that she knows only of the Cordish Co.'s initial contract from 2000 and that no revised contracts have been submitted for agency approval. She declined to discuss details about a contract she has never seen.

"Certainly, there's nothing in [the law] to protect tribes from bad deals," Coleman said. "And you have to assume that there are a variety of issues involved - the risk to the developer, what the tribe is getting for its dollar, the liquidity of the tribe, the location, the number of years, the amount of dollars."

But she added: "If you had a facility where, either because of the location or the track record of the tribe, you expected that it would make a lot of money, then you would expect the developer to accept a smaller percentage in return."

Despite its oversight responsibilities, the commission has limited authority to investigate casino development deals and typically relies on tribes and developers to divulge contracts voluntarily. Officials say the law creating the agency never contemplated that Indian gaming would become a multibillion-dollar phenomenon, and that regulators are ill-equipped to monitor every casino and all of the related contracts.

Coleman said her agency has taken a heightened interest lately in the portion of federal law that prohibits developers from gaining a "proprietary interest" in an Indian casino. If her agency were to decide that the Cordish Co.'s risks are inconsistent with its share of the profits - as was ruled against the Coconut Creek developer - the government could force the tribe to renegotiate the deal or risk a federal shutdown of the Hard Rock casinos.

Philip N. Hogen, chairman of the commission, said he is more concerned with assisting poverty-stricken tribes than investigating deals struck by wealthy, business-minded tribes such as the Seminoles.

"As long as they know what they're doing, they have their eyes open, I'm not offended," said Hogen, an Oglala Sioux. "If they do that at the sacrifice of not being able to buy dialysis machines or pay scholarships, then I think I'd be alarmed."

The Seminoles and the Cordish Co. also chose not to submit their contracts to the federal Bureau of Indian Affairs, contending that the deal did not amount to an "encumbrance" of Indian land, which would require agency approval. The decision is listed in the bond prospectus among the "risk factors" for investors in the deal.

A Lexus for a song

Months after reaching the deal with the Cordish Co., Billie was run out of office by tribal leaders who accused him of embezzling and wasting tribal funds through business arrangements separate from the casinos - allegations that he denies and which have never been proven in court. He says he is reduced these days to working as a laborer, sweating in the back yards of South Florida mansions building elaborate palm-thatched Indian chickee huts by the swimming pools of the wealthy.

The tribal officials who ousted him have lived well off the tribe's gambling profits, distributing $3,500 a month to each of the tribe's 3,000 members, including Billie - or $168,000 a year for a family of four - and draining accounts by purchasing luxury cars, chartering jets, buying tickets to sporting events and paying for breast implants for wives and girlfriends.

Hogen warned tribal leaders last month to contain their lavish spending or risk a federal shutdown of their casinos.

The tribe's spending exploits have become the stuff of legend.

Councilman David Cypress, allotted $5 million a year to hand out on his reservation, spent about $57 million in less than four years, beginning in 1999, partly by exercising his penchant for giving away luxury cars, especially Lexuses.

"Give me a sad Hank Williams song, I will give you one," he testified in a 2002 court case.

The tribe, hungering for more money, had a substantial incentive to sign with a developer who promised to increase its take.

The Cordish Co. sweetened the deal by offering the Seminoles a 7 percent cut of any casino agreement they brokered with other tribes on behalf of the developer. The Seminole Tribe's share was later raised to 20 percent when the Hard Rock deal was renegotiated. Cordish predicts the tribe will make more money from that arrangement than he will earn from the Hard Rock deal.

"I don't know how much I'm going to make, but [the Seminoles] are going to make a lot more, with no risk," Cordish said. "I took all the risk."

The projections used by Cordish to sell the deal to investors tell a more complicated story. While the Seminoles will make tens of millions of dollars more once the new casinos begin operating, the largest initial beneficiary of the new revenue is the Cordish Co.

"I think it's turned out even better for them than they thought, and that might not be an advantage when they try to work with other tribes," said Perry E. Israel, an attorney in Sacramento, Calif., who helped pull together the financing. "You don't want to be seen as the guy who screwed the Indians."

Financial assurances

Officials with Hard Rock Cafe International did not return telephone calls seeking comment, but the company's agreement with the Seminole Tribe is filed among the deal's public financing documents. It gives the tribe the right to use the distinctive Hard Rock brand in exchange for 3 percent of the casinos' net revenue and an upfront "consulting fee" of $2 million.

When the Seminoles signed the deal with the Cordish Co., tribal leaders asked for assurances that their gambling revenue from the Hollywood and Tampa casinos won't decline. Hence, Cordish's fee would be deferred if the two casinos ever earn less than about $218 million a year combined, or roughly what they earned in 2002. Because of the Hard Rock name and the Cordish Co.'s track record of building stylish and successful projects, the two casinos are expected to earn more than twice that amount.

According to estimates from the tribe's consultants, the Seminoles earned $237.4 million in net income from the Hollywood and Tampa casinos in 2003, a record for the two locations and the first significant increase after three years of relatively flat earnings.

The new hotel and casino complexes are expected to earn $486.5 million during their first year of operations - a $249.1 million increase. But after subtracting the $120 million share that Cordish is estimated to receive the first year, another $17.6 million payable to Hard Rock, and the annual debt payment of roughly $40 million, the tribe will earn only about $71.5 million more.

Some gambling experts consider the Cordish Co.'s projected earnings conservative and say the firm could easily earn twice that amount. They expressed surprise that any developer in Indian country landed such a lucrative deal, much less an industry newcomer working for one of the granddaddies of Indian gambling.

"I wish I was getting 30 percent of the net," said Joseph M. DeRosa, general manager of gambling operations for the Cabazon Band of Mission Indians in California, another successful gambling tribe. "Back in the beginning, when no one understood the industry and no one would lend the tribes any money, you saw some numbers like that. But I don't know why the Seminole Tribe would do that today."

'The biggest risk'

Casino profits are not guaranteed, and consultants say the project could wither if Florida ever were to allow commercial casinos or another form of competition to encroach on the near-monopoly the Seminole casinos enjoy in the state. The consultants say, however, that the prospects for competition are remote and that the new Hard Rock casinos in Hollywood and Tampa enjoy some of the most favorable market conditions in the country.

Under the 1988 Indian Gaming Regulatory Act, tribes must have an agreement with the state to operate Las Vegas-style slot machines and table games such as blackjack, defined as "Class III" gaming. The Seminoles do not have such an agreement with Florida and are limited to "Class II" gambling, which consists of games that do not pit gamblers against the house. Generally, developers find casino gambling to be more attractive and profitable.

Cordish said the fact that the Seminoles are engaged in Class II gaming increases his risk. "These developments are literally revolutionary, and there are obvious tremendous risks associated with such a new approach," he said.

Cordish said an assessment of his profits, "whatever they may turn out to be," must take into consideration that the tribe is engaged in Class II gaming.

Last month, Hogen told the tribe that it would have to alter some of its electronic gaming machines or turn them off. The tribe made software adjustments so that gamblers using the machines, which seem almost indistinguishable from slots, were competing against one another, not the house. This month, the U.S. Supreme Court upheld the use of such machines by other tribes.

The riskiest aspect of the Hard Rock deal might have been Cordish's decision to work with the Seminoles, a tribe with a long history of curious business dealings and which had backed out of its last casino deal, cutting off payments to the Coconut Creek developers 2 1/2 years after the casino was built.

The tribe waived sovereign immunity as a condition of the Hard Rock contract, allowing the Seminoles to be sued in federal and state courts that typically do not have jurisdiction over Indian matters. But some industry watchers take little comfort in such protections.

"That's the biggest risk, I would say - that the tribe might just decide to stop paying one day," said McGhie, the Nevada gaming consultant. "The project sounds like a slam-dunk, but the risk factor of the Indians breaking the contract is probably very high."

'What next?'

Unlike typical Cordish Co. projects, which involve downtown renewal efforts and public negotiations with elected officials, the three-year process of negotiating and financing the Hard Rock contract was a trudge through a bewildering landscape of alleged tribal corruption, with federal investigations and criminal indictments, and a sexual harassment lawsuit filed against Billie, the tribe's former chairman. One of Billie's closest associates was charged with laundering tribal funds through shadowy business ventures in Nicaragua and Belize. The tribe's chief counsel was shot in his home.

"Every time we'd turn around there was another federal investigation, or the shooting, or some issue in Central America. We kept asking, 'What could possibly happen next?'" said Israel. "I deal with municipal bond issues. This was not something I'm used to."

But the Cordish Co. surmounted those obstacles. The developer's main monetary risk - the Hollywood shopping facility that Cordish says will cost $80 million - will pay the developer 30 percent of its profits for 25 years, according to company contracts. The facility is not expected to be complete by the Hollywood casino's opening date in May.

The $40 million worth of tax-exempt bonds bought by the Cordish Co. is an unrated investment that is considered exceedingly risky by Wall Street standards, though that risk is rewarded with a 10 percent interest rate. Rank Group PLC, the London-based parent of Hard Rock, bought $25 million worth of the bonds in 2002 and recently sold them at a $3.9 million profit, according to reports filed with the Securities and Exchange Commission. The Cordish Co. is prohibited from selling its bonds until 2005, according to a prospectus distributed to potential investors.

Neither Cordish nor the Seminole Tribe would show their contracts to The Sun, but copies are included within the thousands of pages of documents available publicly because of the tax-exempt nature of the project's financing.

The Cordish Co.'s projected first-year revenue is equal to the cost of both the bonds and the shopping center. And, according to one investor in the project, the company's fees could be considerably understated. Gordon Graves, former chairman of the gambling machine manufacturer Multimedia Games Inc. and a private investor of "less than $1 million" in the Hard Rock deal, said he expects the casinos to pull in nearly double their published projections, collecting as much as $600 per machine each day. At that rate, the Cordish Co.'s share could exceed $2.6 billion over 10 years.

The Hollywood project will have a 500-room hotel, 2,000 electronic gaming machines, 65 poker tables and an 800-seat bingo hall, while the site near Tampa will have 250 rooms and a slightly smaller gambling operation.

"If you look at the locations and consider the potential, it just takes your breath away," Graves said.

Indians' new deal

A review of the contracts that other companies have signed to develop Indian casinos around the country shows that nearly all the deals are different. But few seem as potentially lucrative as the Cordish Co. deal.

One that could prove more lucrative is the deal that Malaysian billionaire Lim Goh Tong struck with the Mashantucket Pequot Tribe of Connecticut in 1991 to build Foxwoods Resort Casino, generally regarded as the most profitable in the world.

Details of the arrangement are not public, but a 1999 report in The Providence Journal, citing a confidential bond prospectus, said Lim's contract pays him 9.99 percent of the casino's adjusted gross revenue for 25 years. The Lim family reportedly lent the tribe $235 million to build the casino and receives interest on the loan in addition to a percentage of the profits.

The Foxwoods agreement was one of the first deals of its kind, struck when lenders shunned Indian casinos, and its 25-year term is considered an anomaly and has not been emulated.

One year later, a development group led by South African casino mogul Solomon Kerzner reached a deal with Connecticut's Mohegan Tribe to build and operate a casino near Foxwoods, granting Kerzner's group 30 percent to 40 percent of the net revenue for seven years. Cordish suggested that the Mohegan Sun contract shows that his company's deal is typical.

Unlike Cordish, Kerzner was dealing with a group of Indians that had never built a casino and was not recognized as a bona fide tribe when negotiations began. Kerzner spent four years helping the Mohegan Tribe secure federal recognition, then helped negotiate a gambling compact with Connecticut and finally completed the development deal by offering to finance the last $50 million of construction with his own money.

His company, Trading Cove Associates, also operated and managed the casino when it opened in October 1996. The Mohegan Tribe bought out Kerzner's interest at the end of 1999 for a 5 percent, 15-year share of the revenue, a sum estimated at $549.1 million at the time but projected near $1 billion today.

The Cordish Co., by contrast, dealt with a tribe already operating five casinos in Florida that was earning, according to court testimony from Billie, about $350 million a year.

The payments to the Cordish Co. also come as other tribes - such as the Mohegans in Connecticut, the Mississippi Band of Choctaw Indians and the Cabazons in California - are choosing not to share profits with developers or managers, saying they have gained enough experience to build and manage casinos themselves.

"I'm surprised they're working with that group. I think a lot of people are surprised," said DeRosa, the Cabazon Tribe's manager. "The Seminoles are hitting the ball out of the park already, and they have quality people on their own payroll. They don't need anyone's help."

The Seminoles' chief executive of gaming operations, James F. Allen, worked for Kerzner for six years and is often cited by investors as a key factor in the tribe's ability to win the trust of Wall Street. Allen spent a year working on the Hard Rock project as a Cordish employee but now works solely for the tribe. He will be paid $750,000 a year once the Hard Rock casinos open, according to a copy of his employment contract.

Another California tribe, the Augustine Band of Mission Indians, was approached about three years ago by business partners of the Cordish Co. who were trying to use the Hard Rock project as a launching point for other casino development deals. Tribal officials say they were offered a consulting agreement that would have paid the developer 30 percent of the net profits, similar to Cordish's deal with the Seminoles. The tribe rejected the offer.

"They were asserting that he [Cordish] had done business with Hard Rock and was this successful developer and that made him eminently qualified, but financially the deal they were proposing was a joke," said Michael Lombardi, a gaming consultant and spokesman for the Augustine Band. "It made them money, but it didn't make the tribe much money."

Regulatory matters

The Coconut Creek contract, which would have paid the developer 35 percent of the profits for 10 years, was found in June to be a violation of federal gaming laws, partly because the payments bore "no reasonable relationship to the risks," according to a letter Coleman, the agency's general counsel, wrote on behalf of the National Indian Gaming Commission. "Clearly, it is against the law for any entity other than the Tribe to have a proprietary interest in the gaming operation," she wrote.

The Coconut Creek developer fronted about $19.6 million for construction and was expected to earn up to $200 million over the 10-year contract - less than one-sixth the amount that the Cordish Co. is projected to make. But Coleman said that the Coconut Creek payments were excessive, given the Seminole Tribe's successful history of operating casinos, its considerable financial resources and the favorable market conditions in South Florida. The tribe severed its relationship with the developer in 2002, became sole operator of the casino and stopped paying the company a share of the profits. The matter is being pursued in court.

Even before regulatory issues came into play, the plan to build the Seminole Hard Rock casinos was delicate on several levels, among them the decision to finance the project with tax-exempt municipal bonds.

'Gray areas'

Federal law generally prohibits tribes from using tax-exempt bonds to build hotel and casino projects, which are not regarded as "essential government functions," so the development team sidestepped the law by issuing the bonds through the Capital Trust Agency, a bond authority for the city of Gulf Breeze in Florida's panhandle. As a municipal entity, which has more lenient tax rules, Gulf Breeze was able to issue tax-exempt bonds for the project by designating it as an economic development initiative. The agency then lent the proceeds back to the tribe.

The IRS considers the deal - the first time such a tactic was used for an Indian casino project - to be federally subsidized, because interest on the bonds would have generated $233 million or more in federal income tax payments if taxable bonds had been used.

An IRS spokeswoman said the agency is studying the "gray areas" of the tax code invoked to justify the tax-exempt status. If the IRS were to declare that the bonds are taxable, the tribe could be forced to refund the investment of bondholders or reach a settlement with the government to compensate for the lost tax revenue.

Attorneys who worked on the deal considered the tax-exempt arrangement to be vital to the project, since the bonds offered investors the taxable equivalent to a roughly 16 percent annual return, making the Seminole Tribe's problems far easier to swallow on Wall Street.

And while the IRS has a procedure for granting prior approval to complicated or unusual tax deals, the developers chose not to seek the agency's opinion - another "risk factor" that is listed in the bond prospectus.

Even one of the bond's investors considers the financing arrangement rather tenuous.

"Whether this type of thing is going to hold up, I don't know," said Graves. "I think there's a chance that this could become a common way of financing these things, but I think there's also a decent chance that Congress will take a look and decide, 'We're not going to allow this.'"

The financing plan offered further incentive to limit the Cordish Co.'s management role in the project. Tax-exempt bonds cannot be used to benefit private companies, so a typical management contract might have precluded their use. Cordish's deal with the tribe thus had to be structured solely as a consulting agreement.

Sunita Lough, a tax-exempt bond specialist for the IRS, said a deal like the Hard Rock project is rarely submitted for prior approval. Instead, lenders rely, as the Cordish Co. did, on the advice and experience of the attorneys they hire. Such a deal, she said, is unlikely to be reviewed unless it pops up during a random audit.

She also cautioned against assuming that the lawyers in the Seminole deal got it right.

"There's nothing wrong with getting around a law, as long as you're right," she said. "This is an area that we really haven't had too much experience with, and these things are not very clear-cut. Essentially, they're taking a chance."

Rolling the dice

Few unions seem more curious than that of the Seminoles, a tribe nearly hunted to extinction in the Florida swamps, and Cordish, a fifth-generation Baltimorean and midfielder on the Johns Hopkins University's national champion lacrosse team in 1959.

While Cordish, 64, has acquired a squeaky-clean business image, gaining nationwide acclaim as a bold and creative specialist in urban renewal, the Seminole deal has him rolling dice with a tribe known for sparring with the government, spending excessively and scuffling with the law.

"OK, look, I could pontificate and say I'm doing this for social reasons, but that would not be fair for me to say," said Cordish, whose company is the only five-time winner of the prestigious Urban Land Institute award of excellence. "I'm thrilled to be doing this. I feel better about this project than any project we've ever done. But it's also a plain, ordinary business deal."

Cordish repeatedly told The Sun that he considers the Seminole casino project to be among his finest accomplishments.

"You know how when they have a diving meet, they grade the divers on the degree of difficulty?" he said. "This has got five backflips in it."

But he declined to discuss some of his dealings with the Seminoles in detail, saying it is a private matter between his company and the tribe and that the documentation is too complex for most people to understand. Seminole leaders take a similar position.

So blurry is the early history between the Baltimore development firm and the Seminole Tribe that two of the most conspicuous figures don't even agree on whether they've met.

Asked his impression of Billie, Cordish replied, "I'll never forget the first time I met him," noting one of his trademarks - the finger that he lost to an alligator in early 2000. For months Billie kept it in a vial, sometimes wearing it around his neck, and talked of displaying it at the tribe's Ah-Tah-Thi-Ki Indian Museum.

"He had half of a finger in a little jar, and I said, 'Mr. Chairman, what happened?'" Cordish recalled. "And he said, 'Well, I wrestle alligators. And this is one that I lost.'"

Billie said he doesn't recall meeting Cordish, and that the tribe's casino negotiations were always handled by intermediaries. He says that in 1979 when he was shown his first casino contract, just a dozen or so pages, he read only the first page - where he noticed the word bingo - and the last - where he saw estimates that the tribe would earn $3 million.

"I wouldn't fault the man if he didn't remember me," said Cordish. "We certainly didn't have a discussion or anything else."

Tribal politics

Regardless of his interactions with Cordish, Billie says that in early 2000 he knew what he wanted - more money for the Seminole Tribe of Florida. The Hollywood casino was old and smoky and needed an upgrade. The chief imagined something spectacular, with lakes and a fountain and a 2,000-room hotel. After checking with industry consultants, Billie says he concluded that David Cordish was the right man to help him get it.

Operating through Power Plant Entertainment LLC, the Cordish Co. signed two contracts with the Seminole Tribe in late July 2000: a "developer agreement" to build two casinos and a "financial services engagement letter" pledging to arrange most of the financing.

According to legal documents that discuss subsequent changes, that initial contract would have paid Power Plant 17 percent of the two casinos' gross gambling revenue after debt payments. Timothy W. Cox, a former Seminole official who helped negotiate the contracts, said the payments were to last 15 years, but the duration is not mentioned in public documents.

Within months of signing the deal, Billie began to encounter political turbulence from the other four elected members of the tribal council. Unhappy with his oversight of tribal finances - and his control over their personal spending - the council members began taking the unprecedented position of overruling their longtime chairman on matters of operations and finance.

In early 2001, they canceled Billie's plan to buy a $42.5 million Gulfstream V jet, then seized control of the tribe's newspaper, which was seen as sympathetic to the chairman, and fired its staff. Members reportedly encouraged a former employee to file a sexual harassment lawsuit against Billie. The woman, who alleged that she had had a sexual relationship with Billie and that he forced her to have an abortion, swore in an affidavit in a federal lawsuit Billie later filed against the tribe that she had lodged her complaint at the urging of tribal officials.

The council began to look into the financing of Billie's other business dealings, including an Internet gambling operation in Belize and a hotel in Nicaragua where the Cordish Co. had agreed to develop a Hard Rock Cafe. The Central American deals would lead to the federal indictment of Cox and two other Billie associates on embezzlement, money laundering and conspiracy charges. All were exonerated after Billie testified that he had approved the transactions.

On May 24, 2001, citing the sexual harassment complaint and the tribal investigation of his finances, the other four members of the tribal council, by a unanimous vote, suspended Billie from office.

Terms of the deal

Four months later the Cordish Co. signed a new contract with the Seminole Tribe, which included the Cordish Co.'s current 10-year, 30-percent fee.

"Maybe this one will turn out great," Cordish said, thinking back on the extraordinary amount of "brain damage" he said the Seminole deal had caused. "We certainly have bet a lot on it and have taken a big risk."

Comparing one development deal to another is difficult because no two projects are alike. And comparing casino deals can be trickier, because income projections are fluid and contracts use different definitions for key elements such as "net revenue." But the arrangement with the Seminole Tribe is particularly hard to quantify because some of Cordish's characterizations of the deal are not reflected in the available documentation.

For instance, in response to the suggestion that outside analysts consider his contracts exceptionally lucrative, Cordish said: "Do they know that I'm paying half of the debt service on those bonds? Well, I am. Call Merrill Lynch, call the tribe. Anybody will tell you, 'Yes, they're paying half of the debt service.'"

Yet Merrill Lynch managing director Jeffrey Carey, who handled the Seminole bond deal, said the Cordish Co. is not paying any of the debt service. Neither is any such payment mentioned in the bond-offering documents or Cordish Co. contracts. Tribal officials did not respond to repeated requests to discuss the Hard Rock deal in detail.

"I have to create a defeasance fund," Cordish said, referring to an emergency set-aside fund that could be used to pay off the bonds. "I do. That doesn't exist normally. I have to create, over 10 years, a defeasance fund to take out the bonds. Not the Seminoles. That has to come out of any profit I make. And if I don't make a profit to cover the defeasance fund, I just have to put it up myself."

Yet Carey understands the deal differently. The master bond agreement, he said, explains that the set-aside fund is paid solely out of "pledged revenues" - directly from the gambling revenue of the tribe, and before the Cordish Co. is paid.

"We took all the risk," Cordish said. "They didn't have to write a check, I write all the checks."

Some of the Cordish Co.'s financial exposure was eliminated as soon as the bonds were issued, when the company was to be reimbursed for up to $20 million in expenses, according to its contracts. And before both projects are completed, the Cordish Co. will have been paid developer and financing fees that total roughly $28.7 million.

The Seminoles put up $36 million of their own money to finance construction of the casinos, according to the bond prospectus.

The Cordish Co. owes $3.25 million to Merrill Lynch, records show, and might have to help the tribe compensate Hard Rock for the costs of closing restaurants in Miami and Fort Lauderdale. Since late 2000, the Cordish Co. has been paying the tribe up to $100,000 a month to compensate for lost revenue from a trailer park that was cleared off the Hollywood site, according to company contracts.

The true value of the deal will be realized once the projects are fully open. According to estimates published with the bond sale, the Cordish Co.'s cut the first year would be about $120 million and would rise each year for 10 years, for a total income of $1.3 billion.

Even after it no longer shares in the tribe's casino winnings, the Cordish Co. will help market and manage other businesses at the casino complexes, such as the hotel, retail and restaurant facilities, and will be paid 30 percent of the profit from those businesses for 25 years, according to the bond prospectus.

The Hard Rock projects, Cordish said, have "wonderful fundamentals."

He called the two locations "the best in the United States for gaming, in my opinion."

And he said they enjoyed the same Cordish Co. touch that has made the Baltimore firm one of the nation's most sought-after urban developers, with acclaimed downtown projects in Houston, Salt Lake City, Charleston, S.C., and other cities, including its hometown.

"The Indian casino world, and what the tribes should be accomplishing around the country vs. what they are - because most of them do not have the Cordish Co. - is like, it's pitiful, it's pathetic," Cordish said. "We're going to do just what we do everywhere else. We're going to deliver what we said; it is going to make this an entirely different place."

New projects

Today, Billie drives around wealthy South Florida neighborhoods in a pickup truck with a sign advertising his chickee-building business. Customers often remark about his fallen celebrity, he says. And they ask to see the hand with the missing finger.

After a two-year suspension, Billie was formally removed from office in March 2003. The sexual harassment suit was dismissed because the alleged events took place on tribal land. The former Seminole chief says he isn't bitter about his fate.

Cordish remains busy as always, working "100-hour weeks" and overseeing new commercial projects in Rochester, N.Y., Atlantic City, N.J., and Louisville, Ky. He says he has a plan for developing casinos in Maryland if the legislature legalizes such gambling, and that he might offer to do it for free.

He predicts the Seminole Hard Rock projects will be among the most impressive and successful on his resume.

"The question is, can we build a better mousetrap?" he said. "You know what? I think we can. And if we do, we'll be rewarded. And anywhere along the line, going back to the beginning, we slip, we'd lose a fortune."

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