PROVIDENCE — Twin River’s owners have agreed to make periodic payments to the 16 local contractors — including builders, electricians, drywall installers, painters and others — who felt compelled to go to court to try to get paid a total of $5.7 million they say they are owed for 2006-07 renovations the owners of the greyhound track-and-slot parlor are still struggling to pay.

A court-approved consent order extends by four months an earlier commitment by the owners to make “interim” monthly payments to Dimeo Construction, and for Dimeo to then distribute money among the subcontractors in proportion to how much they are each owed.

The current agreement requires payments totaling $1.75 million — and in amounts ranging from $75,000 to $250,000 monthly — between May 30, 2008 and Jan. 29, 2009, which roughly coincides with the end-date for BLB’s current “forbearance agreement” with its lead lenders.

The lenders, led by the Merrill Lynch Capital Corporation, agreed not to exercise their rights to try to seize the property or take any other action that might force Twin River into bankruptcy court for a period of time to give the owners a chance to get their financial house in order. In the interim, Twin River’s financial advisers from the New York-based Lazard Ltd. have been meeting privately with the state’s financial team from the Blackstone Group, a leveraged buyout firm, in an attempt to work out a financial plan that safeguards the state’s huge share of the video-slot revenue.

Gambling is the third-largest source of state revenue, expected by budget writers to generate $354.4 million this year, with Twin River — home to 4,751 video slots, including a newly introduced “virtual roulette” game — producing the largest share of that money. But both Newport Grand and Twin River have been struggling.

The 16 local contractors with a stake in the Superior Court consent order issued Friday include: Aero Mechanical Inc., Arden Engineering Constructors, Century Drywall, Croce Electric Co., Custom Drywall, Delta Mechanical Contractors, Dimeo Construction Company, H.W. Ellis Painting Co., J.L. Marshall & Sons, Legere Group, Northeast Steel Corp., Siemens Building Technologies, Unique Metal Works, Kenneth Castellucci & Assoc., and Rhode Island Welding.

When their cases first reached the court, some were suing BLB Management Services, while others were suing the BLB subsidiary, UTGR, that owns the slot parlor, while others sued Dimeo as the general contractor on the massive renovation project and at least one, targeted Merrill Lynch.

Under the terms of the consent order, the owners had to declare the project complete, with the exception of a portion of the work done by Arden Engineering on the air conditioning and ventilation system, and free Dimeo and the subcontractors from any “further performance obligations under the contracts whatsoever, including any so-called punch list, warranty, correction of work or post-occupancy or completion obligations.”

Twin River is run by a subsidiary of BLB Management Services Inc., a holding company composed of Kerzner International, Starwood Capital Group and Waterford Group LLC. The company bought the Lincoln Park dog track in 2005, along with three greyhound racetracks and a horse track in Colorado, and then embarked on a $225-million renovation and expansion.

The owners fell behind in their debt payments last March. They currently have $559 million in outstanding loans. Their revenues have been up while those of other gambling operations have been down, but they have still not been making enough to pay their bills. Their credit rating has been downgraded to “D,” with one major rating-service agency citing the high probability of a bankruptcy.

In an extended interview earlier this month, BLB chief operating officer George Papanier and vice president and general counsel Craig Eaton said they are anxious to dig Twin River out of its current financial hole without filing for bankruptcy protection because they believe such a filing would create a “downward spiral” that would scare off customers and employees.

kgregg@projo.com