BILOXI, MS (WLOX) - The Board of Directors of Margaritaville Casino said they have been unable to put together a deal to build a hotel, and that means Margaritaville can't compete in the Biloxi market. As of today, the casino is planning to close its doors by September 19.
Attorney Michael Cavanaugh, representing MVB Holding - the operators of Margaritaville, announced that a dispute with the landlords made it impossible to secure financing for the hotel and other amenities.
"As a result, the business will likely close in 60 days or less," Cavanaugh said Monday.
Cavanaugh said executives have made every attempt to come to an agreement with the landowners, but failed to find common ground.
"We've had several discussions without reaching an agreement to amend the lease. They won't agree to that."
Casino managers called an employee meeting Monday morning to tell workers the news before the story was released to the media.
"I felt it was important to get in front of them before we went to the press to give them the facts, so they would not read it first and think things that were not true," Margaritaville President Doug Shipley said.
In a letter distributed to workers and the media, Shipley explained that the closing will happen on or before September 19, 2014, and "once closed, we expect the closing of the entire MVB-Biloxi site to be permanent."
"You will, of course, continue to receive wages for all work. In addition, if MVB-Biloxi closes prior to September 19, 2014, you will continue to receive your wages through September 19, 2014, unless and until you accept a job with another employer. While you are free to accept other employment, if you do we will treat that as your voluntary resignation from MVB."
Regardless of what happens, employees will be paid for 60 days. Margaritaville is following federal labor law by making that guarantee.
Nonetheless, the news was tough to deliver and hard on employees.
"Folks are very upset. I think they were grateful we told them the facts as we know them today," Shipley said.
He was emphatic about continuing to negotiate with land owners in an effort to avoid closing Margaritaville Biloxi.
Workers were tight-lipped as they left the casino following Monday's meeting. Several told us their managers asked them not to speak to the media. The Margaritaville guests we talked with were disappointed by the news.
"They had a big board in there that said they were going to open up a hotel, and they were going to expand the buffet, and they were going to make a bigger gaming floor and now they're closing down. I knew it," Al Kahnberry said "I knew it was all a lie. That was a big bluff. I knew they didn't have the cash for that."
"I'm sad," Brenda Dickson said. "I was afraid we might be overbuilding down here, you know. I thought it might be too much. But when they said they were putting a hotel in, I thought they were doing okay. That's a shame."
WLOX News has learned from the Harrison County tax assessor that Clay Point Property out of Hattiesburg owns the property where Margaritaville sits. We left a message for the company's president and are waiting to hear back.