Grand Station Casino will go up for sale on the steps of the Warren County Courthouse March 26 unless casino owner Delta Investments and Development and Bally Gaming Inc., resolve a $3 million debt that Bally says it is owed.

Bally filed for foreclosure with the Warren County Chancery Clerk’s Office on Feb. 29. In addition, Bally is seeking the money through a lawsuit filed last week in U.S. District Court in Jackson.

Bally is foreclosing on the casino for the $3 million owed for gambling equipment inside Grand Station, the gambling boat at City Front. It does not affect the adjoining hotel, Grand Station Hotel on Mulberry Street, said Grand Station marketing director Mickey Fedell.

Bally has never been an owner of any of the five Vicksburg casinos, but has sold gambling equipment.

The casino that currently is Grand Station was Harrah’s when it opened in November 1993. Harrah’s became Horizon in 2003, and its owner sold to Delta Investments in 2010.

Grand Station marketing director Mickey Fedell said officials with Delta Investments and Development had no comment.

Jackson lawyer Donald Allen Windham Jr., who represents Bally, also would not comment.

Bally, according to court records, agreed in 2011 to loan Delta $3 million to fund capital reserves, upgrade gaming equipment, upgrade casino computer systems and finance renovations to the casino.

According to papers filed in federal court, Delta had not paid on the loan since Sept. 1, and owed Bally $491,837 in payments accrued from Sept. 1 until Jan. 20, when attorney Windham filed a demand letter for the past due amount.

Delta Investments bought the former Horizon Casino from Tropicana Entertainment in December 2010 for $3.25 million in cash plus liabilities associated with the casino.

Among those was a promise to continue payments to the City of Vicksburg for City Front property, a 2.95-acre part of the public area by the Yazoo River Diversion Canal, plus the casino’s parking garages between Mulberry and Washington streets.

The city sold the property to Harrah’s when it built the casino and hotel in 1993. The public areas were leased back to the city for $1 a year.

Under the agreement, the city was to receive about $562,940 a year plus 1.5 percent of the casino’s net revenues until Oct. 13, 2033. Termination fees of $450,000 would kick in if the casino closed. The agreement was transferred to Columbia Sussex, Tropicana’s predecessor, when it bought the casino from Harrah’s.

Since the casino has been open, the city has received about $10.1 million from its owners.

Vicksburg Mayor Paul Winfield said the foreclosure should not affect the City Front payments to the city.

“We are going to get our money,” he said. “We are going to look out for the city’s rights.”

Allen Godfrey, executive director of the Mississippi Gaming Commission, said state gaming officials are aware of the foreclosure, which could affect the casino’s future, depending on the result of the dispute between Bally and Delta.

Under state law, anyone buying a casino must have a state license, and Godfrey said the license process takes at least four to six months.

He said no pending license applications are on file for Grand Station, though one was pursued but held for lack of complete information. He declined to identify the would-be developer.

Grand Station is Vicksburg’s only downtown casino and was the second to open, as Harrah’s.

Harrah’s sold the casino to Columbia Sussex Corp. of Fort Mitchell, Ky., in July 2003 for $28.6 million and renamed the casino Horizon. Tropicana Entertainment, which had been part of Columbia Sussex, took over Horizon operations and in 2007 agreed to sell the casino to Nevada Gold and Casinos for about $35 million, but Nevada Gold backed out of the deal, and Delta stepped in to buy the hotel and casino.