In Our View, Jan. 26: Silver Lining

Dark, dreary and durable as the economic recession cloud remains, there are occasional, relatively minor silver linings that appear from time to time. One has been the slump’s stunning impact on tribal casinos across the country, and the residual thwarting effect on new casino development efforts. Translated locally, that can only mean bad news for the Cowlitz Tribe’s proposal for a tribal casino near La Center.

The Columbian has strongly opposed the project for years, mostly because of numerous deleterious effects the mega-casino would have on the local quality of life. And as much as we lament the tough economic times and long for a swift recovery locally, statewide and nationally, any restriction this recession places on the Cowlitz project can only be seen as a positive for Clark County. We’re certain the casino promoters are paying attention to what’s happening elsewhere in the state. The Seattle Times on Saturday reported that revenue “dipped as much as 30 percent at some tribal casinos in the state in 2009. The Nooksack tribe is in court with its lender and the Snoqualmie tribe is struggling to make payments on its casino debt. The Skokomish tribe closed its casino last fall rather than keep hemorrhaging cash.”

All of which proves that promises of casino promoters — as with all business development interests — are subject to the whimsy of fragile economic conditions. For example, any jobs projections, this recession has proved, should be consider speculative and temporary.

The Times quoted W. Ron Allen, chairman of the Washington Indian Gaming Commission and chairman of the Jamestown S’Klallam near Sequim: “(Tribal casinos) were riding a high wave and a long one. You didn’t have to think, you could just go ahead and implement a marketing plan because it sounded good, you didn’t have to question it or challenge it. Now (the recession) is forcing tribes to step back to say, ‘Wait a minute now.’ ”

Couple that frank, new caution with comments made last fall by Lynn Malerba, chairwoman of the Connecticut-based Mohegan Tribe: “The wisdom in the past was that gaming was recession-proof. Obviously, that’s not the case. … It makes sense to have a kind of balanced portfolio.” Though situated on the other side of the country, the Mohegan Tribe has a role here because it is the main financier of the Cowlitz project. And as The Columbian’s Michael Andersen reported earlier this month, the Mohegan Tribe last fall “essentially cut a $10 million check to the Cowlitz project, enough to keep it from defaulting on a $23 million loan from Bank of America.”

Andersen also reported that the Mohegan casino between New York City and Boston “saw revenue and operating profit drop 12 percent last year.” One result of that slump was a B- rating of the tribe’s new debt by the credit-rating firm Standard and Poor’s. That B- rating is just above junk-bond status, and the S&P’s outlook for the Mohegan’s debt was negative.

Elsewhere in the country, according to the Times, three tribal casinos defaulted last year, including the largest tribal casino in the nation, the Foxwoods Resort Casino run by the Mashantucket Pequot Tribe in Connecticut. Overall revenue during the recession is up for tribal casinos, nationally and in the state, but the growth is at a slower rate.

It would be best for Clark County if the Cowlitz Tribe’s plans were rejected by federal authorities because of the negative impacts on this community. But if the project is postponed or — better — abandoned because the Cowlitz casino promoters simply don’t think they can afford it, well, that would also sit well with local citizens who cherish this area’s high quality of life.