15 Deadwood Properties Go To Bank

First Interstate Bank has taken control of 15 Deadwood, South Dakota properties owned by the estate of Ken Kellar, who at one point controlled 27 percent of the town’s casinos. Last September, the estate shuttered Miss Kitty’s, one of Deadwood's legacy properties that had housed three casinos and two restaurants.

15 Deadwood Properties Go To Bank

The estate of Deadwood businessman Ken Kellar has turned over to First Interstate Bank ownership of 15 storefronts on Main Street. The agreement includes the former Miss Kitty’s casino property and the Badlands complex. Kellar died in December 2009.

Retail tenants in the buildings will continue to operate under their long-term leases, said Dan Neal, commercial loan manager at First Interstate Bank. Seven of the properties are vacant. “My fondest dream is that a person would come in and buy both properties at once, like tomorrow. Realistically I think you’ll see that Badlands complex sell as one and Miss Kitty’s sell as one and I think we’ll see it soon. With revitalization efforts, I see the resurgence of Deadwood coming,” Neal said.

The estate closed Miss Kitty’s, one of Deadwood’s legacy establishments, last September. That resulted in the loss of three casinos and two restaurants, along with 30 jobs. Previously, the estate sold the Buffalo-Bodega complex, Bullock Hotel, Deadwood Express, Branch House, a gift shop and a large downtown parking lot. In Lead, the estate sold the Homestake Mansion and the Old Town Hall Inn.

Spearfish attorney Richard Pluimer, who oversees the Kellar estate, said Kellar began purchasing Deadwood properties more than two decades ago. At one point he controlled 27 percent of the town’s casinos. “We are ready to close Mr. Kellar’s estate. After much consideration, it’s been decided that turning the deeds to a number of properties over to First Interstate Bank was the best thing to do,” Pluimer said.

Deadwood Mayor Chuck Turbiville noted, “Anytime you have empty buildings in town it’s a bad thing. But having the bank take control, I think, is a good thing. I still believe the gaming and tourism industry in Deadwood is healthy.”

The Deadwood Gaming Association doesn’t necessarily agree. DGA Executive Director Mike Rodman said, “If we are going to continue to build Deadwood as a destination, the DGA wants to ensure that our gaming product is competitive with surrounding gaming jurisdictions.”

In a survey of neighboring states, the DGA found they offer a greater variety of games than Deadwood casinos. The American Gaming Association survey found that craps and roulette are more popular games than poker; when Colorado introduced those games in its casinos in 2009, adjusted gross revenues rose by 309 percent.

As a result, the DGA said it supports legislation to allow more games in Deadwood. “We are looking at this as part and parcel of the overall product as we try to improve Deadwood. We need to be competitive,” Rodman said.

Figures recently released by the South Dakota Commission on Gaming show gambling revenue down for 2013. Gross revenue for the year through November decreased 3.26 percent, or more than $3 million, for the same period in 2012.