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Landlords: Margaritaville owes millions in rent, $500K in unpaid taxes
Landlords have filed suit
meperez@sunherald.com
July 25, 2014
BILOXI -- The operators of Margaritaville Casino owe nearly $4 million in rent and $500,000 in unpaid taxes, according to a request for a temporary injunction filed Wednesday by attorneys for the casino's landlords.
The motion filed in Harrison County Circuit Court asks that MVB Holding LLC be directed to turn over the keys to the casino immediately and prohibited from removing any of its contents.
The filing came two days after MVB Holdings announced the casino will close by Sept. 19.
Attorney Michael Cavanaugh said the casino's location and lack of amenities are issues and the company can't get financing for a hotel because the landlord won't renegotiate the lease.
Attorneys for Clay Point LLC, a group of property owners at the site, took issue with being blamed for the closing.
Lawrence Gunn Jr. and Donald Dornan Jr. said the suggestion Clay Point is somehow responsible "for Margaritaville's financial and management woes is completely untrue. Clay Point and numerous other public and private entities made significant concessions to assist Margaritaville during the last 18 months. It is regrettable that the well-intended efforts of those parties was insufficient to keep Margaritaville afloat."
According to the legal filing, the lease requires MVB to pay $1 million in rent a year and a percentage of Margaritaville's sales. The casino opened in May 2012 and rent
was deferred for a year until May 2013. The suit says MVB has not paid any rent or the deferred rent, and the amount due through July is $3,868,225.
MVB also "failed and refused to pay" taxes on the leased property, Clay Point claims in the motion.
The amount due is $501,690.02.
"The Clay Point property owners have repeatedly attempted to reach a workable agreement that would help Margaritaville by making their rent lower," Dornan said. "These efforts failed because Magaritaville has consistently been unwilling to recognize any obligation to make past or future rental payments."
As MVB is required to pay employees for 60 days, the motion says they won't be additionally harmed if the casino is forced to close immediately.
Attorneys for MVB Holding responded to the motion for preliminary injunction Thursday and said forcing an early closing would cause a loss of revenue to the company, along with the city, county, state and school district that receive casino tax revenue.
"As the MVB board said on Monday, they are unable to resolve the litigation with landowners, and although MVB believes it would ultimately prevail, the inability to refinance and build the hotel and amenities during that extended period prevents them from going forward," Cavanaugh said.
As the legal action continues, Dornan said, "we believe the casino property and its contents should remain 'as is' during the 60-day closing period. There should be no removal of personal property except under the supervision of the court."
The filing came two days after MVB Holdings announced the casino will close by Sept. 19.
Attorney Michael Cavanaugh said the casino's location and lack of amenities are issues and the company can't get financing for a hotel because the landlord won't renegotiate the lease.
Attorneys for Clay Point LLC, a group of property owners at the site, took issue with being blamed for the closing.
Lawrence Gunn Jr. and Donald Dornan Jr. said the suggestion Clay Point is somehow responsible "for Margaritaville's financial and management woes is completely untrue. Clay Point and numerous other public and private entities made significant concessions to assist Margaritaville during the last 18 months. It is regrettable that the well-intended efforts of those parties was insufficient to keep Margaritaville afloat."
According to the legal filing, the lease requires MVB to pay $1 million in rent a year and a percentage of Margaritaville's sales. The casino opened in May 2012 and rent
was deferred for a year until May 2013. The suit says MVB has not paid any rent or the deferred rent, and the amount due through July is $3,868,225.
MVB also "failed and refused to pay" taxes on the leased property, Clay Point claims in the motion.
The amount due is $501,690.02.
"The Clay Point property owners have repeatedly attempted to reach a workable agreement that would help Margaritaville by making their rent lower," Dornan said. "These efforts failed because Magaritaville has consistently been unwilling to recognize any obligation to make past or future rental payments."
As MVB is required to pay employees for 60 days, the motion says they won't be additionally harmed if the casino is forced to close immediately.
Attorneys for MVB Holding responded to the motion for preliminary injunction Thursday and said forcing an early closing would cause a loss of revenue to the company, along with the city, county, state and school district that receive casino tax revenue.
"As the MVB board said on Monday, they are unable to resolve the litigation with landowners, and although MVB believes it would ultimately prevail, the inability to refinance and build the hotel and amenities during that extended period prevents them from going forward," Cavanaugh said.
As the legal action continues, Dornan said, "we believe the casino property and its contents should remain 'as is' during the 60-day closing period. There should be no removal of personal property except under the supervision of the court."
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