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2007-2008 ANNUAL REPORT
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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
3. New Casino Projects – continued:
Painted Hand Casino
On October 26, 2005, SIGA entered into an agreement with PHC Holding Limited Partnership (PHC)
a related party, for the development and lease of a new casino. The new casino will be located on the
Kahkewistahaw First Nation in Yorkton and will replace the existing Painted Hand Casino. The total cost to
SIGA of the new casino is estimated to be $18 million. SIGA agreed to pay PHC certain amounts up front.
SIGA agreed to pay PHC $100,000 for access to the premises during the development stage. SIGA also
agreed to pay PHC a commissioning fee of $430,000. In addition, SIGA agreed to pay PHC an amount by
which the direct construction costs exceed $12,000,000. The up-front costs do not have to be paid back
by PHC 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 PHC until June 10, 2027. The lease payments for land are as follows: $104,000 for the first five years,
$119,300 annually for years six through ten, $136,628 annually for years eleven through fifteen and
$136,628 thereafter adjusted for changes in the Consumer Price Index. The lease payments for the
building will be determined based on PHC’s direct construction costs which exclude up-front costs paid
to PHC 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%.
Included under the new casino projects are the following:
2008
2007
FHQ
PHC
Total
Total
Commissioning costs
$ 360,000
$ 400,000
$ 760,000
$ 1,100,000
Construction progress payments
3,289,010
595,351
3,884,361
30,939,340
Costs paid directly by SIGA
1,901,445
2,199,413
4,100,858
6,151,399
$ 5,550,455
$ 3,194,764
$ 8,745,219
$ 38,190,739