DALLAS - Developers of a proposed 250-room hotel adjoining a state-owned casino and bond-financed speedway in Kansas City, Kan., have won a 90-day delay on a deadline to break ground on the project.

Kansas Entertainment must decide by May 1 to begin building the hotel as promised or face $1.3 million in fines from Wyandotte County. Kansas Entertainment is a partnership of Penn National Gaming Inc. and International Speedway Corp.

In a letter to Wyandotte Unified Government county administrator Dennis Hays, Penn Gaming deputy general counsel Carl Sottosanti blamed the post-recession economy for the company's inability to break ground in February as scheduled.

The extension was unanimously approved by commissioners of the Unified Government of Wyandotte County and Kansas City, Kan., on Jan. 9.

If the developer fails to start the hotel construction by May 1, Kansas Entertainment will have to pay 1% of the casino's gambling revenues then and every year after until a hotel is built.

The hotel and the penalty were included in the agreement to build the $200 million casino using sales tax and revenue (STAR) bonds. The casino opened in February 2012. STAR bonds, designed to promote economic development in Kansas, were also used to build the adjacent Kansas Speedway.

Within two years of the 2012 casino opening, the developers were to have commenced construction of a hotel with no fewer than 250 rooms, county administrator Dennis Hays told commissioners.

The expanded gambling law passed by the Kansas Legislature in 2007 stipulates that casinos could be built and operated by private companies, but are owned by the state. The state receives at least 22% of a casino's net annual revenue, with local governments getting 3%.

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