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Terry McNeice, President of the South Surrey Ratepayers Association, stands near the land for a proposed casino/entertainment complex along the Highway 99 Corridor in Surrey, B.C., on Nov. 27, 2012. Councillors voted 5 to 4 to reject the controversial project on Jan. 19, 2013.Rafal Gerszak/The Globe and Mail

The CEO of the B.C. Lottery Corporation is "dumbfounded" that Surrey's mayor and councillors turned down a casino after having given the corporation and the developer, he says, clear signals for three years that they wanted one.

"Something transpired in the last few days and I don't know what," said Michael Graydon in the wake of a surprise 5-4 vote at 2 a.m. Saturday to reject the casino licence for a luxury hotel and convention centre development planned near the Surrey highway that leads to the U.S. border.

Mr. Graydon said he is particularly disappointed that Mayor Dianne Watts is now saying she had concerns as far back as last fall about the proposal by Gateway Casinos, something he says he only discovered Tuesday by reading her comments in a newspaper.

"If she truthfully had issues, I would have thought she had enough respect for Gateway to raise those issues then."

But Ms. Watts said that the city's rezoning for the land three years ago always specified that the casino component might not be approved.

She said the developer at the time assured councillors that not having a casino "wouldn't be a deal-breaker."

She also said council has to listen to what the public says.

"What's the point of going to a public hearing if you're not going to listen? For me personally, it was a very difficult decision."

Ms. Watts said that, although a couple of councillors had been clear about their opposition to any casino right from the beginning, others were not.

But Mr. Graydon said he and everyone involved in the process say the decision seemed strange, especially given that the opposition to the Surrey casino was a fraction of what it had been in Vancouver two years ago.

In contrast to Surrey, he said Vancouver councillors send clear signals weeks ahead of a vote that they had doubts about a casino expansion.

But the Surrey decision was startling to everyone involved, even opponents, he said.

Surrey council considered two proposals for casinos in January of 2010. One was for a casino attached to a large complex in the newly developing city centre. Another was for the property in south Surrey. The city had earlier adopted a policy on casinos saying it would not consider more than three altogether for the municipality.

Council voted in favour of a rezoning for the downtown complex, but removed any provision for a casino.

It rezoned the south Surrey property to allow an entertainment complex with a casino. However, council specified the casino licence should be voted on later.

The lottery corporation originally advised Surrey not to rezone the land for a casino, Mr. Graydon said, because there was no guarantee at that point the operator would get a licence.

"But the city decided it wanted to go on its own accord," he said. Surrey planners envisioned the area as a commercial gateway for travellers coming from the south along Highway 99. "By zoning, it created the communication to us that council desired a casino to be built."

Mr. Graydon says the corporation has no interest in moving into communities where residents don't want them.

But since Surrey was sending signals it wanted one, BCLC and Gateway started working in partnership with city staff and councillors to develop and refine the concept. The mayor and councillors asked for many revisions to the complex, including a larger theatre, a hotel that was minimum four stars, and more.

Developer Bob Cheema complied, adding $30-million to the cost of the proposed project.

Everything is up in the air now, acknowledged Mr. Graydon and Ms. Watts.

She said she has no idea whether the developer will proceed with the convention centre and hotel.

Mr. Graydon said the corporation isn't going to invest any more energy in Surrey. Instead, it will wait to see whether any of the communities bordering Surrey – either of the first nations communities, plus Delta or Langley – are interested in building a casino.

"We believe a market exists in south Surrey."

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