Updated at: 08/18/2009 7:00 PM
By: Kim Johnson

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Casino to Stop Paying City

Think Duluth's streets are bad now? They could be in even worse shape if the city of Duluth comes out on the losing end of a dispute with the Fond du Lac Band.

The Band has stopped all payments to the city related to the operation of the Fond du Luth Casino.

Over last 25 years, the Band has paid the city $80 million for allowing it to have a casino presence downtown. This year, the city had planned to receive $6.6 million before the casino cut off payments.

On Monday, Mayor Don Ness said the Band told the city last week through a letter that the contract was no longer and was never valid. The contract originated in 1984 when the casino became federal Indian land.

Band Chairwoman Karen Diver did not return phone calls for comment, but last fall she told Eyewitness News the city wasn't doing enough to earn the money and the Band wanted to re-negotiate the contract.

Ness said the city strong contests the Band's actions and plans to take it to court--a dispute that could take up to a year to resolve, according to the city's legal counsel Bob Maki.

In the meantime, Ness said the city will continue its street work as planned.

"We are moving ahead with our street improvement program both for 2009 as well as 2010 with the confidence that the revenue from the contract will remain," he said.

Finance Chair, Councilor Todd Fedora, said he is hopeful the issue will be resolved--saying if it doesn't the streets would suffer.

"Had we not been able to get a return in our investment with this arrangement the streets would certainly not get the attention that they would in the past," Fedora said.