Biloxi says Secretary of State owes city $1.2 million

Published: Aug. 25, 2016 at 11:33 PM CDT|Updated: Aug. 26, 2016 at 1:57 PM CDT
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BILOXI, MS (WLOX) - The City of Biloxi and the Institutions of Higher Learning are joining forces against the Secretary of State in Chancery Court to get money they say they are owed.

The city is arguing that the Secretary of State owes the city $1.2 million in tidelands rent from the Golden Nugget property at Point Cadet.

"It's not going to cease any city functions but it is a cash flow issue, like, any business," said city attorney Gerald Blessey. "We've been paid for 14 years and all of a sudden, the Secretary of State decides he's going to hold our money hostage, which is outrageous."

The Secretary of State, IHL and the city are co-landlords for the property as part of a Chancery Court order 15 years ago. The money is paid by Golden Nugget to the Secretary of State's office, which then divides the money as per court order.

The city, being the biggest property owner, gets $2.7 million a year upfront. The rest is divided between the city, IHL and Secretary of State.

On Thursday, Blessey went before Chancery Judge Jennifer Schloegel to ask the Secretary of State's office be removed as trustee and replaced either by the city or by an independent party.

Blessey says Secretary of State Delbert Hosemann transferred the money in April, which was held in trust, to help the state Legislature meet a budget shortfall.

"Whatever the secretary's differences with the legislature are, that's his problem," Blessey said. "He shouldn't be blaming this on the Legislature. He should have paid the city and IHL the money that was been owed all year."

Going forward, the city proposes to divide the funds that would normally go to the Secretary of State's office between the IHL and the city until the payments are caught up.

Blessey says that all parties will submit documents in two weeks and if the decision is in the city's favor, it would likely be made by mid September.

The Secretary of State's office could appeal the decision and delay any final decision.

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