By SCOTT MCKIE B.P.
ONE FEATHER STAFF
In the near future, Harrah’s Cherokee Casino Resort will have a fourth hotel tower with expanded convention center space and parking garage. Tribal Council passed Ord. No. 567 (2016)during the regular Budget Council session on Tuesday, Aug. 1 that gives the TCGE (Tribal Casino Gaming Enterprise) authority to enter into the Fifth Amended and Restated Loan Agreement with Wells Fargo Bank for the funding of the additions.
According to the ordinance, which passed 11-1 (Wolftown Rep. Bo Crowe voted against), Wells Fargo will provide the following to the TCGE:
- a reducing revolving credit facility of $526,562,000 to refinance the existing reducing revolving credit facility;
- an $85,000,000 term loan facility to refinance the balance of the term loan facility for the construction of the Valley River Casino;
- and a $250,000,000 delayed draw term loan facility for the construction of the fourth tower and convention space known as the Hotel and Convention Center Project.
According to Investopedia.com, a delayed draw term loan is “a special feature in a term loan that stipulates that the borrower can withdraw predefined amounts of the total pre-approved amount of a term loan at contractual times”.
“This is not gaming, it is complimentary to gaming,” Principal Chief Richard G. Sneed said during discussion on the legislation on Tuesday. “It is a means of diversifying our revenue streams…we talk about diversification. We’ve talked about diversification for years, and we’ve yet to do it.”
He said gaming revenue is currently flat and is being “outpaced” by program expenditures. “All of the services that have been discussed and the needs of our people, the revenue has to come from somewhere. That money doesn’t just fall out of the sky. It has to be generated.”
Chief Sneed said these additions are projected to bring in an additional $46 million annually to the Tribe, $30 million of which he said is cash flow. He said most of the revenue of the Eastern Band of Cherokee Indians is generated from TCGE projects. “They’ve got a perfect score if you want to look at the projects they’ve brought forward. They’re the main revenue source for this Tribe.”
He stressed the need for the expansion, “Currently, the casino is turning away 60,000 visitors annually because we cannot accommodate them.”
Birdtown Rep. Travis Smith related he met with TCGE officials recently to discuss the loan agreement. “I think everyone’s wishes are kept in mind, and they’re trying to move ahead. I think securing this doesn’t actually hurt us in any way. I think they’ve worked out a pretty good deal…”
Big Cove Rep. Teresa McCoy said she wasn’t opposed to the measure, but did have concerns of the focus of Tribal Council. “I don’t see this Council asking anyone to go out and find the funding to put us into houses. I see millions of dollars come through here, I just don’t see millions of dollars in houses being built. I don’t see a whole lot of things happening that we need to be focusing on…”
She added, “The complaints that I here in the community are that everything is geared towards gaming. And, they’re tired of it.”
Yellowhill Rep. B. Ensley, who serves as the Planning Board chairman, said this project passed through Planning Board and then was approved by Tribal Council previously. “The casino monies have allowed us to meet most of the needs of our Tribe.”
He hopes the new convention center will be busy. “We’ve got to expand…hopefully, every weekend of the year we’ll have something going on here to diversify the income for the Tribe. We, as politicians, want to provide every service that people want and need, but it takes money to provide those services.”
Resolution No. 484 (2016) was approved during Budget Council on Jan. 17 and gave the authorization for the fourth tower and convention center. It passed 69-24 with Vice Chairman Brandon Jones, Wolftown Rep. Bo Crowe, and Cherokee County – Snowbird Rep. Adam Wachacha voting against and Big Cove Rep. Teresa McCoy being absent.