Tribes to build casinos large and small
EDWARD SIFUENTES
Staff Writer
SANTA YSABEL ---- Five years after the first American Indian casino opened its doors in North County,San Diego County bands of American Indians.
About 30 miles east of Escondido, the Santa Ysabel Band of Diegueno Indians is putting the finishing touches on its casino near the northern tip of its rocky reservation overlooking Lake Henshaw.
"You are going to be amazed when you look at it," Santa Ysabel Chairman Johnny Hernandez said proudly about the casino. "It's a great view."
The 700-member tribe plans to open its casino in March. When it opens, it will join four others in the area north of State Route 78 and east of Interstate 15 at the Pala, Pauma, Rincon and San Pasqual Indian reservations. The La Jolla Band of Luiseno Indians, which opened in 2002 a small "slot arcade," closed it two years ago while it plans a larger facility.
Late start
North County casinos now attract thousands of visitors to the area. They have become economic engines for local Indian communities that were mired in poverty and whose residents were increasingly leaving them in search of better opportunities elsewhere.
Santa Ysabel tribal leaders said they hope their casino will generate enough revenue to provide health care for their elders, education for their young and better infrastructure for their community.
The casino will compete for customers with others closer to major highways. That's why the tribe intentionally kept it small, at about 35,000 square feet and 349 revenue-generating slot machines. Keeping the number of machines under 350 will allow the tribe to continue to receive stipends from the revenue-sharing trust fund from wealthier tribes' casinos.
Hernandez said they chose the spot perched on the hill for its scenic beauty. His tribe hopes to capture some of the thousands of travelers who visit Julian and the surrounding countryside looking to get away from "city life," Hernandez said.
"We made it our casino," Hernandez said. "We didn't want to make it Harrah's."
Harrah's, the Las Vegas casino entertainment giant, is a partner with the neighboring Rincon Band of San Luiseno Indians in a huge resort casino with a high-rise hotel near Valley Center.
Residents and some county officials have raised concerns over increased traffic accidents and crime as a result of the casinos.
"We have many people call us about the accidents there," on State Route 76, said Sheila Walson. She and her husband, Gerald Walson, are Bonsall residents and community activists on traffic issues related to State Route 76.
Last year, San Diego County sheriff's Lt. Sean Gerrity, commander of the Valley Center-Pauma substation, released a report that said the influx of casino customers was the most reasonable explanation of why crime figures more than doubled from 1999 ---- when there were no casinos in the area ---- to 2005.
But tribal leaders say they have contributed money to the county, as part of their state agreement, for law enforcement, emergency and fire services to help offset some of the problems.
New players
While Santa Ysabel begins its venture into gambling, two other tribes in the area have already negotiated deals with the state, allowing them to build larger casinos with more than 2,000 slot machines each. The Pala Band of Mission Indians owns a large-scale casino hotel and resort 15 miles north of Escondido.
The Pauma Band of Mission Indians a few miles east of the Pala Indian Reservation announced last year that it will build a $300 million casino and hotel with the help of its partners, the Mashantucket Pequots' Foxwoods Development Co.
Hernandez said he's not worried about competition. Most tribal leaders say that having a cluster of casinos attracts visitors to the area, benefiting all.
Alan Meister, an economist with the financial consulting firm Analysis Group, said that San Diego County tribes have reason to be optimistic. San Diego, Riverside, Orange and Los Angeles counties have a combined population of about 18 million.
"There are definitely going to be competition effects," Meister said. "That's why you see all the advertising. They want you to choose one over the other, but there are a lot of customers to go around."
In his annual Indian Gaming Industry Report, Meister estimated that Indian gambling revenues grew about 24 percent, from $5.8 billion in 2004 to $7 billion in 2005. There are 57 Indian casinos in California ---- including eight in San Diego County ---- with about 60,000 slot machines."
Based upon the continued statewide growth of Indian gaming, California does not seem to be near its saturation point," Meister wrote in his report. "Thus, an increase in the supply of gaming may continue to yield positive returns."
San Pasqual
Leaders with the San Pasqual Band of Mission Indians seem to agree. The tribe's casino is expanding to more than double its size, from 43,000 to 110,000 square feet. In November, casino officials unveiled a new six-story parking structure.
The $114 million project will also add a larger buffet area, a steak house, lounge, three bars and other amenities. When completed, the larger casino will accommodate 2,000 slot machines, said Joe Navarro, president of the tribe's casino development group.
Navarro said business is good and the expansion will meet growing customer demands."Our expansion is 100 percent guest-driven," he said. "We are bursting at the seams. We set records on our small facility. It's definitely a need-based expansion."
Navarro said the tribe abandoned a plan to build a larger casino and resort overlooking Lake Wohlford on the southern end of the reservation due to road access problems and other hurdles. He said the tribe instead plans to build on the current site, possibly adding a hotel later on.
Plans big and small
A few miles north of the San Pasqual reservation, the Pauma tribe's project is undergoing an environmental impact review ---- a requirement under agreements that tribes sign with the state. A new deal signed with Gov. Arnold Schwarzenegger in 2004 allows the tribe to operate more than 2,000 slot machines in exchange for paying the state more money.
For the project, Pauma originally struck a management deal with Las Vegas-based Caesars Entertainment. But the deal fell through after the company announced it would be sold to Harrah's, which is a partner with the neighboring Rincon tribe. A deal with Hard Rock Hotel & Casino also failed due to disagreements over the terms of the contract, tribal leaders said.
The new partnership announced last year with Foxwoods is expected to produce a 171,000-square-foot casino with about 90,000 square feet of gambling space and up to 2,500 slot machines. The complex would also include a 400-room hotel, a 1,500-seat event center, 2,500-seat outdoor amphitheater, and multiple retail and restaurant facilities.
The Mashantucket Pequots' Foxwoods Development Co. operates Foxwoods casino, one of the largest casinos in the country with 7,100 slot machines and a 1,400-room hotel in eastern Connecticut."
Our reasons for partnering with the Pequots on this project involves more than the fact that they bring with them a spectacularly successful track record," Pauma Chairman Chris Devers said in a statement announcing the project. "The Pequots respect native sovereignty and have a long history of struggle and perseverance, and we can relate to that."
Farther east of Pauma, the La Jolla band unveiled a plan last year to build a 35,000-square-foot casino with 500 slot machines, a 5,000-square-foot restaurant and a 150-room hotel. The tribe's Web site describes the first phase of the project as having a casino with 349 slot machines, and subsequent plans include a golf course, expanded casino and other entertainment.
At Santa Ysabel, Chairman Hernandez said the casino is attracting tribal members back to their ancestral home. His tribal government is already working to provide electricity to reservation homes that did not have it before.
"This is a springboard for economic development, to get electricity, bring water, build better homes and roads on the reservation," he said.
Contact staff writer Edward Sifuentes at (760) 740-3511 or esifuentes@nctimes.com.
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