The governor's office yesterday released a draft contract that Newport Grand sent the state. The terms of the proposed agreement reflect legislation approved by the General Assembly and signed by Governor Carcieri on July 15.

That bill will enable Newport Grand to increase its video slots from 1,301 to 2,101 and guarantees its current tax rate for 10 years. In exchange, Newport Grand must follow through on its $20-million improvement project.

"We have had zero involvement in drafting that," said Jeffrey Neal, spokesman for the governor. "And to date, we have not even read it. We are simply in receipt of it. The Department of Administration and the new Division of Lotteries, in consultation with the governor's office, will be working with representatives at Newport Grand to draft and ultimately approve and sign a contract."

The legislation benefiting Newport Grand also allowed Lincoln Park to add 1,750 video slots to the 3,002 it already has and froze its tax rate for 15 years. The state has already signed an agreement with Lincoln Park because of time constraints affecting BLB Investors, the facility's prospective buyers.

"The BLB situation was unique because they were under a very specific deadline," Neal said.

The legislation proposed in the spring was originally intended to benefit Lincoln Park alone. But Newport Grand quickly followed suit, asking legislators for a similar tax pact and unveiling expansion plans that it said such an agreement would make possible.

The proposed contract requires Newport Grand to invest $20 million in "improvements, renovations and additions" within three years. It specifically mentions construction of "a hotel of at least 90 rooms."

The 10-year contract freezes at 26 percent the amount of video slot revenues Newport Grand must pay the state in taxes for both its old and new machines.

The agreement, like the one reached with Lincoln Park, also indemnifies Newport Grand against any revenue losses it might experience if another gaming facility opens in the state. This "slippage protection" was added to the legislation at the eleventh hour earlier this month and was intended to address Harrah's continuing efforts to build a casino in West Warwick with the Narragansett Indians.

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