Monday, January 18, 2010

Mohegans Increase Investment In Proposed Casino In Washington State

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The following installment of The Tribe In The Media is a Longview Daily News article on the Cowlitz Tribe´s proposed casino in Washington State which is being backed by the Mohegans. The article refers to a $10 million loan made by the Mohegans toward the project in September 2009.

Here´s what the most recent Mohegan gaming authority filing with the feds says about that loan, "In September 2009, the Tribe loaned Salishan-Mohegan, LLC $10.0 million, which was used to repay revolving loans under the Salishan bank credit facility in connection with the September 30, 2009 amendment to the Salishan bank credit facility. The promissory note executed by Salishan-Mohegan, LLC in favor of the Tribe, or the Mohegan Tribe promissory note, provides for the accrual of interest at an annual rate of 15% and matures on October 1, 2010.¨

Cowlitz Indian Tribe's casino project has turned into a waiting game
By Greg Garrison
The Daily News
January 16, 2010

Financing for the Cowlitz Indian Tribe's proposed La Center-area casino appears to be on shaky ground as the tribe awaits a key federal decision, and experts say it could be at least four more years before the project gets final approval.

The recession has taken a toll on the project's main financial backer, the Mohegan tribe of Connecticut, which saw operating profits from its gambling interests fall 8 percent in 2009, according to the Hartford Courant newspaper.

The Mohegan Tribal Gaming Authority recently reported that November slot revenues were down 11 percent from a year earlier.

Cowlitz tribe spokesman Phil Harju said finances are tight for most businesses right now and he doesn't expect money to be a problem if and when the time comes to start building.

"There's concern all over the country," Harju said. "By the time we're ready to break ground, my guess is the financing will be available."

But tricky hurdles remain for the Cowlitz tribe and its two partners, the Mohegans and another tribe from Northern California, in the push to build a $510 million casino and resort.

The Mohegans are owed $28.7 million for their investment in the Cowlitz project to date, and this year they wrote off $8.6 million of that debt, assuming they may never get it back. (The tribe itself is not in debt. It's owed by David Barnett, a Seattle developer, tribal member and key figure the behind casino plan, and his partner in the project, the Paskenta Band of the Nomlaki Indians, which own a casino north of Sacramento.)

In their annual report to the U.S. Securities & Exchange Commission, the Mohegan Tribal Gaming Authority says the tribe continues to support the Cowlitz project, but it's uncertain it will move forward.

"While certain events ... are generally positive steps in the furtherance of the project, other events ... may ultimately delay or prevent the completion of the project," the report reads.

The Mohegans did, though, make the Cowlitz project a one-year, $10 million loan at 15 percent interest on Sept. 30, according to the Mohegans' SEC filing.

Specifically, the Mohegans cite a February U.S. Supreme Court ruling known as the Carcieri decision. It blocked the U.S. Department of the Interior from placing new lands under Indian jurisdiction for tribes that gained federal recognition after 1934. The Cowlitz waited until 2000 for such recognition.

A bill in Congress that would overturn the decision passed the Senate's Indian Affairs Committee last month. A similar bill on the House side is stalled, and its ultimate fate is unknown.

While a "Carcieri fix" would probably improve their chances of moving their project forward, Cowlitz tribe officials argue the ruling shouldn't even apply to them. Since that court ruling, the tribe has spent time and money to prove that while it wasn't federally-recognized, it did fall under federal jurisdiction in 1934. The Cowlitz is a landless tribe and never has had a reservation.

The waiting game

Once the topic of heated debate, the casino project has fallen into a bit of a lull as interested parties await the Interior Department's decision on putting the 152-acre La Center site under Cowlitz jurisdiction, a designation called "trust" status. The Cowlitz had hoped to break ground this year, but that appears highly unlikely.

Officials in the Interior Department's Office of Indian Gaming still are reviewing the project's final environmental impact study, according to Stanley Speaks, regional director of the U.S. Bureau of Indian Affairs. That document was completed in May 2008. Speaks said he hasn't been given a schedule as to when Department of Interior higher-ups will make a decision.

"We have no idea when that all is going to be taken care of," said Speaks, who is based in Portland.

The Supreme Court decision, as well as the change in White House administrations, have contributed to the length of the review, said Nedra Darling, the Interior Department's spokesperson for Indian affairs.

"The (Cowlitz) review is a broader review than normal," Darling said.

The Interior Department's application-review process has had a tendency to drag out for a long time - years in many cases - even before the Carcieri ruling. The waiting can be maddening for both tribes and casino opposition groups, and it isn't always clear why it takes so long, according to a law professor who follows tribal gaming cases.

"Nobody really knows what happens," said Matthew L.M. Fletcher, director of the Indigenous Law and Policy Center at Michigan State University. "It will sit on somebody's desk for many years at a time before somebody touches it."

Fletcher said the feeling among tribes is that the Obama administration will be more accommodating on indian land trust applications than the Bush administration.

The Cowlitz tribe has tried to remain patient, said Harju. It took the tribe decades to win federal recognition. So time is relative, he said.

But more than a year and a half has passed since the Bureau of Indian Affairs published the casino environmental study, and the tribe still has not learned whether their project will be approved.

"It's frustrating that it's taken us this long," Harju said.

Fletcher said when an application is reviewed for a long period of time, it indicates to him that officials are being cautious because of the potential for lawsuits. Even if the tribe's application gets approved, lawsuits from opponents may mean years of legal battles and delays still lie ahead, he said.

"I would say three to four years minimum, but more likely it'll be longer than that," Fletcher said.

Lawsuits may follow decision

There's no shortage of opposition groups that could line up to contest an approval.

La Center's four non-tribal cardrooms, a Portland-area tribe with casino operations and a Clark County group called Citizens Against Reservation Shopping (CARS) all could potentially file lawsuits.

Fletcher said most tribal casino proposals spawn opposition groups, and those groups typically take legal action. That strategy can be very effective in bleeding money from tribes, he said.

"They're incredibly good at suing and losing," Fletcher said. "But every lawsuit takes time. It's a fantastic delay tactic."

The Confederated Tribes of Grand Ronde, which operate a casino about 70 miles southwest of Portland, have been among the most vocal groups to oppose the Cowlitz project, which would be a major competitor to the Grand Ronde casino.

Grand Ronde tribal attorney Rob Greene questions whether the Cowlitz tribe has any historical ties to the north Clark County area. Others opposed to the project have made similar arguments, saying the Cowlitz' historical center of activity was in the Cowlitz River Valley.

Greene also said the Cowlitz tribe's failure to work out agreements with Clark County and La Center for utilities, other services and revenue sharing probably is causing federal officials to hesitate. Greene said any decision concerning appeals or lawsuits would be made by the Grand Ronde's tribal council. But he said he wouldn't be surprised if it took legal action, contending the Cowlitz project is "bad for everyone."

Harju, the Cowlitz spokesman, said if the project gets approved, the tribe would not waste anymore time.

"There's a lot of pressure and momentum to get this thing going as soon as possible."