November 12, 2006 in City

Tribe pushes new casino

By and The Spokesman-Review
 

Traffic mitigation

As a result of the Spokane Tribe’s proposed development and new housing in Airway Heights, two traffic circles are being considered on U.S. Highway 2, one at the intersection with Craig Road, and one just west of there, at the entrance to the tribe’s property.

Airway Heights City Manager Chuck Freeman said the roundabout at Craig Road would address concerns the state Department of Transportation had after five new subdivisions, to include more than 1,200 homes, were approved near there.

That roundabout would be paid for in part through an $800-per-dwelling impact fee on new development, Freeman said. Other contributions will come from the tribe and from grants the city will seek, he said. The roundabout should cost around $2.7 million, Freeman said.

The other roundabout is much more preliminary but would be paid for by the tribe, said Greg Figg, a state Department of Transportation planner. “We have not really seen anything on it yet,” Figg said of the second roundabout. “The tribe is still working on their traffic plan.”

The Spokane Tribe appears close to completing a gambling compact with the state of Washington, the first step in a long path toward its ambitious development plans in Airway Heights.

Those plans include the Inland Northwest’s biggest casino, a 200-bed hotel, 2,000-seat concert hall and waterfalls running through a 145-acre campus, according to a master plan prepared by a Minneapolis real estate counselor. A November 2005 marketing study foresees profits as high as $72 million a year for the tribe of 2,400 people out of projected annual revenue of $142 million by 2010. That detail is included in the plan prepared by GVA Marquette Advisors, which has offices in Issaquah, Wash.

The tribe’s plan hinges on state and federal approval of the compact currently being negotiated with the state Gambling Commission and federal approval, rarely given, to build an off-reservation casino on trust land.

The Kalispel Tribe won such an agreement from the Department of Interior in 1997. As a result, the Kalispel Tribe’s Northern Quest Casino in Airway Heights “sits in the heart of Spokane aboriginal territory,” said Scott Crowell, the Spokane Tribe’s gaming attorney.

“We’re very confident that we will get a positive determination out of Interior,” Crowell said.

Meanwhile, Gambling Commission Director Rick Day said his staff is “on the edge of an agreement” with the tribe, though he could not discuss details of the compact talks or a timeline for their completion.

The tribe also is drawing close to completing an agreement with Spokane County and the city of Airway Heights that would outline payments the tribe would make to the city and county in lieu of taxes, from which the tribe is exempt. Airway Heights City Manager Chuck Freeman said the City Council could consider the agreement as soon as Nov. 20. Contingent on that City Council approval, county commissioners are likely to take up the issue Nov. 28, said commission Chairman Todd Mielke.

However, if gaming is approved for the development, a separate “impact mitigation” payment would be negotiated to address the increased demand for city and county services, including police and fire calls, said Scott Wheat, an attorney for the tribe. Wheat said he expected the amount of that payment to be “unparalleled in the state,” though he did not disclose any numbers being considered.

“We want to develop a positive relationship with Airway Heights,” Wheat said. “We want to ensure any and all impacts caused by this development are fully mitigated.”

Should the Spokane Tribal Business Council clear all legal hurdles, the tribe hopes to create more than 2,000 jobs paying an estimated $48 million in wages annually, according to the study. Construction alone would create about 1,000 jobs and $43.5 million in payroll, it states.

The tribe’s attorneys also note that unlike corporate casinos, all profits from this development would be used for the benefit of the Spokane Indian people, who experience close to a 50 percent unemployment rate, according to the Interior Department. Benefits, they say, would include improved health care, college scholarships and housing availability. In addition, the development would employ many tribal members and many Spokane County citizens, the attorneys said.

“These are going to be good-paying jobs,” said Crowell, adding that they likely would include health care benefits, as in other Spokane Tribal enterprises.

It remains to be seen what kind of deal the tribe will negotiate with the Gambling Commission staff. Last year, Gov. Chris Gregoire rejected a proposed compact before it was submitted to the Legislature for review. That document included provisions for sharing revenue with state and local governments, a first in Washington.

In her Oct. 27, 2005, letter to then-commission Chairman Curt Ludwig, Gregoire cited her concerns about the provision in the compact “that potentially changes the process by which gaming facilities are located on trust lands.”

Critics of the compact, including state Sen. Margarita Prentice, D-Seattle, a member of the Gambling Commission and consistent advocate for tribes, said the Spokane Tribe’s attempt to build a casino on its trust land in Airway Heights – 25 miles away from the reservation – could open the door to other such deals, expanding gambling in the state. Others said the agreement simply gave too much to the only tribe in the state currently offering gambling without a compact.

Once the Gambling Commission staff negotiates a proposed compact, commissioners have 45 days to either send it to the governor for her approval or back to negotiators.

Even with a state compact, Interior Secretary Dirk Kempthorne, the former governor of Idaho, must determine that an off-reservation casino is in the tribe’s best interest and not detrimental to the surrounding community.

“The department makes gaming decisions, both on and off the reservation, based on the law and the facts. This decision, if and when it reaches the department level, will be no different,” said Shane Wolfe, Interior Department press secretary. “That said, Governor Kempthorne’s position while he was in Idaho was that he did not support off-reservation gaming.”

The tribe’s master plan envisions 1,800 gaming machines, 25 gaming tables, bingo for 300 people, as well as keno, race and sports betting. A spokeswoman for the Spokane Tribe stressed it is only a wish list, and the final number is subject to the outcome of negotiations with the state and federal governments.

A spokeswoman for Northern Quest declined to comment on any potential competition, saying only that building a casino is a “long, arduous process.” Northern Quest has 1,250 gaming machines, nine poker tables and 30 tables for other games.

“If the casino goes in as proposed, I think it’s going to dwarf the Kalispel’s,” said Freeman, the Airway Heights city manager. However, he stressed the potential economic benefit to the city and added, “We hope they’re successful in their project. We have some concerns, mainly dealing with traffic and calls for service, but they’re not shying away from that.”

The tribe’s plans are ambitious, including the casino, a 200- to 300-seat show lounge, the concert hall, two 4,000-square-foot ballrooms and two 2,000-square-foot meeting rooms with wet bars. A hotel with business center, exercise room, spa, indoor pool and Jacuzzi would be attached to the casino. The tribe also envisions a sports bar or brew pub, a 24-hour snack bar, a buffet and a full-service, mid-priced restaurant.

The marketing study predicts the hotel would have 85 percent occupancy, even though Spokane-area hotels generally operate at 60 to 65 percent occupancy. Dean Feldmeier, president of Spokane’s hotel association, called the prediction “ambitious” but said hotels successful in creating a “destination” can attract larger numbers.

In fact, the master plan speculates that the hotel would have to be expanded three years after it is built. Rounding out the entertainment complex would be retail space to accommodate gift, arts and crafts, and tobacco shops.

The study foresees a regional market population of 1.1 million people, including 860,000 adults, 430,000 of whom would live in the “primary market area” of Spokane and its environs. The tribe also hopes to tap into a stream of 500,000 tourists a year. Freeman said the tribe anticipates drawing 5,000 new vehicle trips per day through Airway Heights.

One of the main reasons for financial optimism, according to the plan, is the region’s projected baby boom population of 290,000 people who will be 55 years of age or older by the year 2010, the marketing study said. This is significant because studies have shown a surge in the number of seniors who gamble, unmatched by any other age group.

Plans call for a consistent design throughout the project, which would include Native American themes, with artwork illustrating the tribe’s ties to fishing. A water feature that doubles as a storm water collection swale would run through the center of the property and include waterfalls.

Due to the tribe’s development and new housing subdivisions proposed in Airway Heights, two roundabouts would be constructed on Highway 2, one at the intersection of Craig Road and the other just west of there at the main entrance to the tribe’s development.

The master plan, which includes the work of Hatch Mueller Planning and Design Consultants, Womer and Associates and Northwest Architectural Co. of Spokane, calls for completion of the project in phases.

Phase I, completed this year, saw the development of a service station and convenience store on the south side of the property. Phase II, to be completed in the fourth quarter of 2008, would include site design, a main entrance off Highway 2, water, sewer and power agreements, corporate offices and retail, including an as-yet unnamed big-box store. Phase III, the hotel and casino, would be completed in the first quarter of 2010, according to the plan.

The draft intergovernmental agreement calls for 80 percent of the tribe’s remittance to go to the county and 20 percent to go to Airway Heights until the 145 acres is annexed into the city, Commissioner Mielke said. After that, those numbers would be reversed. The agreement calls for the tribe to pay $14,500 the first year, and to add the same amount every year for 15 years, Mielke said. Beginning in the 11th year, the payment goes up by an additional 3 percent per year. For example, the payment in year 15, Mielke said, would be $235,214.

Mielke said a separate revenue sharing plan based on the earnings from the casino has not been negotiated yet. Following annexation, sewer and water service would be provided by Airway Heights, Freeman said. The tribe’s convenience store uses a septic system and a well previously designated for residential use, Freeman said.

It is not clear whether the construction timeline has been set back by the delay in negotiating a compact with the state.


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