Pinnacle chairman resigns

• Advocate staff and wire report
• Published: Nov 10, 2009 - Page: 6B

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The sudden resignation of Pinnacle Entertainment Inc. chief executive Daniel Lee won’t affect the company’s planned $250 million Baton Rouge casino or the proposed $407 million Sugarcane Bay casino-resort in Lake Charles, a company spokeswoman said Monday.

The projects are proceeding as scheduled, spokeswoman Pauline Yoshihashi said.

Pinnacle announced Monday that Lee, its chairman and chief executive officer, resigned to pursue other business interests.

The move came days after reports that investigators are looking into Lee’s behavior during a St. Louis County Council rezoning vote on a casino complex being developed by a competitor.

Pinnacle owns two casinos in downtown St. Louis and is building another roughly $350 million casino complex, the River City Casino, in a district represented by County Council member Steve Stenger.

Stenger told the St. Louis Post-Dispatch last week that Lee asked him to vote against the competitor’s rezoning. Stenger claims that after he voted for the rezoning, Lee got in his face after the meeting, was rebuffed and then told Stenger’s assistant that: “He just made the worst move in his political career. I won’t forget this. I never forget things like this,” the newspaper reported.

The Missouri Gaming Commission is investigating.

Lee, who had been Pinnacle’s CEO for seven years,  issued a statement  last week saying, “I apologize for making anyone uncomfortable, which certainly was not my intent. I was passionate in my discussion of the issue, which is important to our neighborhood and to the investment and jobs at River City. However, I did not mean to cause offense to anyone, including Councilman Stenger and his staff.”

Richard J. Goeglein has been named interim nonexecutive chairman and John V. Giovenco has been named interim chief executive officer at Pinnacle. The two board members will oversee the company’s operations while the board conducts an executive search for a new president and chief executive officer, the company said in a press release.

BMO Capital Markets analyst Jeffrey B. Logsdon issued a report Monday saying Lee was an important part of Pinnacle’s future and his departure could not be viewed as a positive. But the management change will not radically change the company’s growth plans or value, Logsdon said.

“Further, we believe there are several available, highly skilled candidates for Mr. Lee’s replacement, so we do not expect a lengthy executive search,” Logsdon said. Pinnacle’s stock remains highly attractive and BMO expects it to outperform the market.

Pinnacle has delayed the Baton Rouge complex three times because of credit market conditions, most recently last month when the Louisiana Gaming Control Board gave the firm until the end of April to let construction contracts. Foundation work began on the Lake Charles project in October.

Pinnacle’s stock closed Monday at $9.08, up 36 cents, as the Dow Industrials closed at a 13-month high.