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SASKATCHEWAN INDIAN GAMING AUTHORITY
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3. New Casino Projects:
Dakota Dunes Casino
On December 23, 2004, SIGA entered into an agreement with STC Casino Holdings Limited Partnership
(STC), a related party, for the development and lease of a new casino. The new casino is located on the
Whitecap Dakota First Nation near Saskatoon. The total cost to SIGA of the new casino was $43,210,684
excluding approximately $11 million in costs for slot machines placed in the new casino. SLGA was
responsible for purchasing the slot machines. SIGA agreed to pay STC certain amounts up front. SIGA
agreed to pay STC $85,000 for access to the premises during the development stage. SIGA also agreed to
pay STC a commissioning fee of $560,000. In addition, SIGA paid STC $4,730,000 for land development
costs. SIGA also agreed to pay up to the amount by which the direct building construction costs exceed the
net proceeds available to STC from its own financing. The direct building construction costs and the land
development costs SIGA paid were $17,415,761 and these are recorded as capital assets. The up-front costs
do not have to be paid back by STC and will not be included in calculating the building lease payments as
explained below.
Effective April 1, 2007, STC completed the building shell and SIGA commenced lease payments to STC
until June 10, 2027. The lease payments for land are $170,000 per year. The lease payments for the
building are based on STC’s direct construction costs which exclude up-front costs paid to STC by SIGA.
These direct construction costs are multiplied by a set rate of return. The rate of return per year is equal
to the long-term Government of Canada bond rate in effect when the lease payments commence plus
9%. The monthly building lease payment at April 1, 2007 is $124,965 based on an annual rate of return of
13.2%. This monthly payment increased on June 1, 2007 by $62,440 per month due to an additional STC
contribution of $5,600,000 towards the base building costs. The additional monthly payment is based on
an annual rate of return of 13.38%. SIGA has recorded the lease with STC as a capital lease (see Note 11).
Dakota Dunes Casino opened to the public on August 10, 2007.
Living Sky Casino
On January 25, 2006, SIGA entered into an agreement with FHQ Casino Holdings Limited Partnership
(FHQ), a related party, for the development and lease of a new casino. The new casino will be located
in Swift Current. The total cost to SIGA of the new casino is estimated to be $19 million. SIGA agreed to
pay FHQ certain amounts up front. SIGA agreed to pay FHQ $100,000 for access to the premises during
the development stage. SIGA also agreed to pay FHQ a commissioning fee of $360,000. In addition,
SIGA agreed to pay FHQ at least $8,954,000 of the total building construction costs subject to approval
of the project budget. The up-front costs do not have to be paid back by FHQ and will not be included
in calculating the building lease payments as explained below.
On the second month after the building shell has been completed, SIGA will commence lease payments
to FHQ until June 10, 2027. The lease payments for land are as follows: $128,800 for the first five years,
$147,749 annually for years six through ten, $169,209 annually for years eleven through fifteen and
$169,209 thereafter adjusted for changes in the Consumer Price Index. The lease payments for the
building will be determined based on FHQ’s direct construction costs which exclude up-front costs paid to
FHQ by SIGA. These direct construction costs will be multiplied by a set rate of return. The rate of return
per year is equal to the long-term Government of Canada bond rate in effect when the lease payments
commence plus 9%.
S A S K A T C H E WA N I N D I A N G A M I N G A U T H O R I T Y I N C .
Notes to the Consolidated Financial Statements
Year ended March 31, 2008