Mohegan debt not fatal for casino plans

Prime backer still committed to project eyed for La Center

By Stephanie Rice, Columbian Vancouver city government reporter

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The Connecticut-based Mohegan Tribal Gaming Authority made news this week for its worsening finances, but the chips are still on the table with regard to the group’s plans to build a casino in Clark County, officials say.

“They are still committed to our project,” said Phil Harju, spokesman for the Cowlitz Tribe. “And we’re still waiting on the federal government to act.”

The tribe applied in 2002 to establish a 152-acre reservation near La Center and put a $510 million casino-hotel complex on it.

Harju said Wednesday he’s stopped guessing when the Department of Interior, which includes the Bureau of Indian Affairs, will issue a decision on whether the fields west of La Center’s Interstate 5 interchange will be put into trust.

“All the paperwork is in Washington, D.C., and you will know when it happens because you’ll hear us screaming from Longview,” Harju said.

This week, Moody’s Investors Service placed the gaming authority on review for a possible downgrade over debt concerns, the Associated Press reported.

Moody’s senior vice president Keith Foley told the Associated Press that the gaming authority may find it difficult to reduce its debt in time to refinance outstanding bonds on good terms.

The gaming authority operates the Mohegan Sun Casino in southeastern Connecticut and Mohegan Sun at Pocono Downs in Plains Township, Pa.

Last week, the authority said it would cut 355 jobs and reassign 120 other workers in Connecticut following falling slots revenue in the last year.

The Mohegan Sun Casino is one of the country’s largest tribal casinos and employs more than 9,000 people.

During a conference call in July, the chief operating officer of the authority, Jeff Hartmann, said the La Center project remains “very viable” despite the tribe’s $1.6 billion debt and dismal third-quarter profits.

Vancouver businessman Ed Lynch, president of an anti-casino group, Citizens Against Reservation Shopping, or CARS, said Wednesday that he doesn’t know enough details about the Mohegan’s finances to speculate on whether the proposed casino could be dead.

“We think it should be dead, but it’s not dead until the federal government says it is,” Lynch said. “It’s an exceedingly long process and I don’t think that helps either side of the issue. It’s costing the tribe money and it’s costing us money to keep battling this thing. In our view, it’s time for closure.”

Harju said the fact the authority’s rating may be downgraded isn’t big news.

“I don’t have any concerns,” Harju said. “The whole country is in a recession.”

While Mohegan executives say they are still optimistic a casino will be built in Southwest Washington, they’ve hedged their bets in their financial disclosure statements.

Their financial status must be reported to the federal government because its debt is traded publicly.

In the tribe’s 2009 fiscal report, it wrote off $8.6 million, a third of their investment so far in the Cowlitz project, on the expectation the deal could fall through.

While it’s unknown when the federal government will decide whether the Cowlitz can take the La Center land into trust, one complicating factor has been a Supreme Court decision blocking tribes not under federal jurisdiction prior to 1934 from taking land into trust.

Congress had been debating reversing that decision with what’s been called the “Carcieri fix,” named after the court case.

The Cowlitz tribe contends that even though it was not federally recognized until 2000, the tribe was under federal jurisdiction prior to 1934, when the Indian Reorganization Act was enacted.

The Associated Press contributed to this story.