Published On: Fri, Feb 22nd, 2013

TCGE takes Cherokee County Casino idea to the communities

By SCOTT MCKIE B.P.

ONE FEATHER STAFF

 

The Tribal Casino Gaming Enterprise (TCGE) board is proposing the construction of a new casino to be located in Cherokee County near Murphy.  Board members opened a series of public meetings on the topic in the Yellowhill Community on Thursday, Feb. 21.

“Over the course of the past five or six years, many of you know that the Tribe has looked at a gaming operation in Cherokee County,” TCGE board member John Houser said at the opening of Thursday night’s meeting.  He called the proposal “a really strong opportunity for the Tribe” and said it would create between 500-800 jobs in an area with high unemployment.

TCGE board member John Houser (standing) opens a presentation held at the Yellowhill Community Club Building on Thursday, Feb. 21 on the proposed Cherokee County casino. (SCOTT MCKIE B.P./One Feather)

TCGE board member John Houser (standing) opens a presentation held at the Yellowhill Community Club Building on Thursday, Feb. 21 on the proposed Cherokee County casino. (SCOTT MCKIE B.P./One Feather)

Houser said the Cherokee County casino, with a construction budget of around $110 million, would be around 50,000 square feet and have 1,100 gaming machines, 30-40 table games, a food court, and a 300-room hotel.  “This enterprise will help us to significantly impact the bottom line that goes to the Tribe.”

Adele Madden, Harrah’s Cherokee director of finance, said the project would generate around $177 million in gaming revenue the first year and over $200 million in the sixth year.  “Obviously, because that property is closer to Atlanta, it would take some revenue from here.”

Money that would go to the Cherokee County casino as opposed to the one in Cherokee is factored into the TCGE’s Financial Summary on the project as “cannibalized” money.  That amount is projected to be over $47 million the first year and almost $55 million in the sixth year.

Madden said the cash flow that would be used for distribution and debt reduction – after the cannibalized figures, management fee and capital withholding is taken out – would be over $50 million for the first year and close to $58 million in the sixth year.

“If they go to Murphy, it’s still a good thing for tribal members,” said Houser.  “The funds would go into the same pot of money.”

TCGE board member Paula Brown related that a temporary facility will be open within six months of breaking ground.  The full facility will be open in 18 months after the groundbreaking she said, and the temporary facility will be converted to a storage facility at that point.

Keredith Owens, EBCI tribal member, asked, “What is the risk of tourists going to Cherokee County instead of Cherokee?”

Brown said it would actually help relieve some of the flow into the three hotel towers at Harrah’s Cherokee.  She said they have to issue “denials” to between 5,000 to 7,000 patrons a month which means they do not have room at the three towers and offer them a room elsewhere in Cherokee which is denied by the customer.

Brown said the rooms at Harrah’s Cherokee go to the higher ranked players.  “It will allow us to go deeper into the database and allow more rooms to more people.”

Houser said the current occupancy at the three towers is between 97-98 percent.

Missy Crowe, EBCI tribal member, asked about the debt load this would add to the Tribe.

“Our debt is significant,” said Houser.  “We’ve had debt since day one.  The debt we have now is only on the expansion.  The debt on the first part of the casino and the first hotel tower has been paid back.”

Owens commented, “It is our debt.  We are the owners of the casino.  Whenever we keep accumulating all this debt, common sense tells us to step back a bit.”

Several debt reduction packages have been proposed along with this project including one in which 100 percent of the cash flow for debt and distribution/per capita would go to debt retirement and interest.  Under that plan, the Cherokee County casino would be paid off entirely in three years.  A second proposal of 50 percent of the cash flow going to debt retirement and interest would see the casino paid for in five years.

If the 100 percent plan is used, TCGE board members related that not only would the Cherokee County casino be paid for in three years, but the current debt would be paid for in nine years saving a projected $293 million in interest payments.

Brown said that having a casino in Cherokee County would also help to attract more players that are not currently visiting Harrah’s Cherokee.  She said that within a 180-mile radius, there are currently 2.3 million Harrah’s Total Rewards customers.  But, only 20 percent (476,000) have visited Harrah’s Cherokee.

She said that equates to a total of $488 million in revenue for Caesar’s overall, but only $285 million for the Harrah’s Cherokee property.

Yellowhill Reps. B. Ensley and David Wolfe both related they were happy with the turnout at Thursday’s meeting and the presentation given to the their community.

“It was a nice presentation,” said Rep. Wolfe.  “One of my thoughts whenever it came to Council was, ‘hey, the people need to hear this’.  I wanted my community to hear it before I made my decision. I think they did an excellent job presenting the information, and everyone seems to be happy to have their questions answered.”

Rep. Ensley commented, “I think the meeting went excellent.  We had a lot of participation; the most we’ve had in a good while for any event.”

He said that debt is always a concern, but he was pleased with the meeting and the fact that the community members got to see the presentation first-hand.

Meetings are scheduled in other communities per the following schedule:

  • Monday, Feb. 25 at 5:30pm – Painttown Community Meeting
  • Tuesday, Feb. 26 at 5pm – Cherokee County Community Meeting (Special Called Meeting)
  • Tuesday, Feb. 26 at 6pm – Birdtown Community Meeting
  • Thursday, Feb. 28 at 6pm – Big Y Community (Special Called Meeting)
  • Monday, March 4 at 6pm – Wolfetown Community (Special Called Meeting at Wolfetown Gym)
  • Big Cove – To be announced
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