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Wednesday, 07 February 2007 00:00

Upping the ante

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By Sarah Kucharski • Staff Writer

The Eastern Band of Cherokee Indians is placing a $650 million bet that visitors to Harrah’s casino and hotel are looking for amenities akin to those that are becoming standard across the gaming industry.

 

Plans were announced in late January for the addition of a 16,000-square-foot luxury spa, a third hotel tower with an additional 500 rooms and 28 suites, a new showroom double the size of the existing entertainment pavilion, new restaurants and shops, three additional parking garages and the total renovation and remodeling of the gaming floor, which will bring in nearly 2,000 more gaming devices and 20 more digital table games.

It seems the name of the game is — more.

“We look forward to what this brings for the tribe,” said Principal Chief Michell Hicks.

For now, the state’s only Indian gambling operation generates an estimated $155 million for the tribe each year. That revenue is split between the tribal government to provide for services and infrastructure and the 13,500 tribal members.

In 2006, tribal members received more than $8,000 each in per capita checks generated from casino profits. Hicks estimated that figure will increase 30 percent or more as the casino implements its plans for expansion.

The expansion also should bring an estimated 500 to 600 construction jobs to Cherokee and create 1,000 permanent jobs with an average pay of more than $30,000 per year by the time it is completed in 2012, casino and tribe officials say.

The surrounding community appears to be approaching the expansion with cautious optimism — the investment outlay is sure to be a boon to the local economy, jobs are welcomed, and the casino’s rising prestige is sure to increase its visitation, spilling revenue to nearby hotels, restaurants and attractions.

“I think it’s a positive all the way around,” said Brad Walker, general manager of the Fairfield Inn in Cherokee and president of the Swain County Chamber of Commerce.

 

A workforce in numbers

With a current staff of 1,800 employees, Harrah’s already is the largest private employer west of Asheville, drawing its workers from across Western North Carolina. More than 600 Jackson County residents are on the payroll, more than from any other county.

When the casino opened in 1997, unemployment rates were high and the various part-time and full-time jobs with benefits provided much needed work for a local economy on the manufacturing downturn. And while Consolidated Metco, the largest local manufacturing employers in Swain and Jackson counties, just announced a plant closure in Cashiers and layoffs in Bryson City, unemployment rates overall have significantly fallen.

Employment Security Commission figures show unemployment rates as of September 2006 at 3.1 percent in Haywood County, 2.6 percent in Jackson, 3.8 percent in Macon, and 3.9 percent in Swain. Jackson County’s unemployment rate recently has been the lowest in the state, said Anne Howell, ESC branch manager in Sylva.

Given that, adding 1,000 new employees to the Harrah’s roster most likely will have a three-fold impact — drawing commuters from a larger area, bringing in new employees who become residents to the area, and attracting local workers to change jobs.

“There will be some people that quit their job at my hotel and go over,” Walker said.

Harrah’s has enabled some tribal members who left the reservation in pursuit of higher education or professional employment to return, said Vice Chief Larry Blythe. Either they are finding employment with Harrah’s or the community has grown enough to need their services — from marketing to pressure washing.

Also, the year-round traffic Harrah’s generates is helping local businesses stay open longer during the winter months when tradition has it that tourists and seasonal residents head somewhere warmer.

“Here more people stay open than they ever did,” Walker said.

It’s all contributing to a growing local economy in and around the reservation, Walker said. More people beget more restaurants, real estate offices, and retail shops, which in turn beget more people.

Moreover, the addition of 1,000 new jobs will be gradual.

“We’re not going to mushroom to a 2,700-plus workforce overnight,” said Harrah’s Cherokee Senior Vice President and General Manager Darold Londo.

The introduction of new jobs will tie in with an already steadily growing population.

Those employees who do move to the area will be faced with the prospect of finding housing, an increasingly difficult task for those with average incomes. In Swain County, the mean housing price is about $200,000, said Prudential real estate agent Gene Strickland. To afford such a house requires an income of around $30,000 to $40,000 a year, he said.

“There are too few houses to serve that salary level,” Strickland said.

Moreover an increased demand will in turn raise the supply price. It’s looking as though Robbinsville in neighboring Graham County is becoming a bedroom community for Swain County, where developable land already is at a premium simply due to the high percentage of nationally protected park and forest land.

 

What’s driving the expansion

Discussions about expansion between the Tribe and Harrah’s began more than two years ago with a focus on continuing to build their growing business, evolving with the gaming industry and transitioning the existing property to a resort-type destination.

In Las Vegas — the home of gambling in all its neon pageantry — casinos have grown into small cities in and of themselves with multiple restaurants featuring various ethnic cuisines, a smorgasboard of entertainment from comedians to boxing matches, big name musicians to cabaret shows, spas, indoor gardens, and shopping malls in amongst the slot machines, craps tables and sports books. There’s more for visitors to do than just gamble.

This same concept applies to the Harrah’s expansion, which will include a luxury spa, more restaurants, retail and entertainment space.

“We expect to appeal to a broader market,” Londo said.

The goal is to make Harrah’s the leading tourism destination in the state, said Tribal Casino Gaming Enterprise Board Chair Norma Moss.

And while Harrah’s Cherokee generates $155 million for the Tribe, it gives the company something in return — exposure. Harrah’s Cherokee is the only Harrah’s presence in the Southeast. It provides regional customers with brand association, but also provides Harrah’s company faithfuls with a different property to experience.

“They just like a change of scenery every once in a while,” Londo said.

In order to fund the expansion, the Tribal Casino Gaming Enterprise will be borrowing the $650 million in several separate loans, said Vice Chief Blythe.

“The cost of what we’re talking about is a significant cost,” he said.

Payment on the loans will come as payout from operating revenue like any other budget item.

As the expansion gets underway, Blythe said tribal officials will again try to negotiate with the state to allow live dealer games at the casino. Currently, only video gambling devices are permitted. Tribal leaders were negotiating with Gov. Mike Easley for live dealers in 2005, but talks fell apart over a disagreement about how much money the tribe would share with the state. Blythe said things might be different now that the state’s lottery is in place.

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