Debt still burdens Mohegan gaming

Proposal for a Cowlitz casino is as secure as ever

By Stephanie Rice, Columbian Vancouver city government reporter

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The Mohegan Tribal Gaming Authority, the Connecticut-based group that is working with the Cowlitz Indian Tribe to build a casino near La Center, has not been able to restructure its debt yet remains committed to the Cowlitz project.

Those were among the highlights in an annual financial report by the authority, the gambling arm of the Mohegan Tribe that operates the Mohegan Sun in southeastern Connecticut and Mohegan Sun at Pocono Downs in Pennsylvania.

The authority has more than $1.6 billion in debt. About half of it comes due in March.

CEO Mitchell Etess told The Day, a newspaper in southeastern Connecticut, that the authority has been “working extremely hard to get (the refinancing) done. It’s an extremely complicated process.”

During a conference call, Etess said they have spent approximately $40 million on the Cowlitz project and remain committed.

Cowlitz Chairman William Iyall said Friday that he shares the same concerns the authority does about the debt, but said it’s not unusual considering the economy.

“All of the world is going through major financial upheaval,” Iyall said. “I’m hopeful that they will refinance in an expeditious manner.”

The plans for the Cowlitz site, which would be west of the Interstate 5 interchange in La Center, call for a two-story casino with 3,000 slot machines, 135 gaming

tables, 20 poker tables and a 250-room hotel, plus an RV park, 10 restaurants and retail shops.

But that $510-million complex was proposed before the economy tanked, and the project, if the tribe survives legal challenges, could be built in phases.

Moody’s, a debt-rating agency, said Thursday it still considers the authority to be at substantial risk of default despite improved fourth-quarter earnings.

Meanwhile, Clark County’s case against the federal government for approving the Cowlitz’s application to take the land into trust remains pending in U.S. District Court in Washington, D.C.

U.S. District Judge Richard W. Roberts has set an initial scheduling conference for Feb. 10.

During the conference, attorneys will agree on a timeline for how the case will proceed.

Iyall said Friday that it’s important to get the case on a schedule, and said he’s been reassured by high-ranking officials that the case will have national significance.

The challenge took on special significance after the Obama administration chose to make the Cowlitz land trust case a test of a 2009 ruling by the U.S. Supreme Court.

In that ruling, known as Carcieri, the high court said the government can put land into trust only for tribes that were under federal jurisdiction in 1934.

In saying the Cowlitz could establish a reservation on 152 acres west of the Interstate 5 interchange, Assistant Secretary for Indian Affairs Larry Echo Hawk addressed Carcieri at some length in his December 2010 decision.

“For purposes of our decision here, I need not reach the question of the precise meaning of ‘recognized Indian tribe,’ as used in the (Indian Reorganization Act), nor need I ascertain whether the Cowlitz Tribe was recognized by the federal government in the formal sense in 1934, in order to determine whether land may be acquired in trust for the Cowlitz Tribe,” Echo Hawk wrote in his ruling.

The Cowlitz were federally recognized in 2000; that recognition was challenged and reaffirmed in 2002.

“The Cowlitz Tribe’s federal acknowledgment in 2002, therefore, satisfies the IRA’s requirement that the tribe be ‘recognized,’” Echo Hawk wrote.

Clark County argues that Echo Hawk ignored the Carcieri decision.

Joining Clark County in the challenge of Echo Hawk’s decision: the city of Vancouver; nearby property owners Al Alexanderson, and Greg and Susan Gilbert; Dragonslayer Inc. and Michels Development, operators of the four La Center cardrooms; and Citizens Against Reservation Shopping, a group that includes Scott Campbell, publisher of The Columbian.

The plaintiffs also argue, and the defendants deny, that the current plans have inadequate mitigation for stormwater, traffic, light and noise.

The defendants are the U.S. Department of the Interior, the Bureau of Indian Affairs and the National Indian Gaming Commission.

The tribe filed as an intervenor.

The significance of the Cowlitz land trust decision was noted by the Fitch Ratings agency in a Dec. 22 news release. The agency predicted “little room for a rapid increase in Native American gaming investment in 2012, even as federal regulatory changes make it easier for tribes to gain approval for off-reservation expansion.” The agency mentioned the “administrative fix” to Carcieri and how it benefited the Cowlitz Tribe.

The agency said there’s potential for projects to move forward, including the Cowlitz project, but that “regulatory and legal roadblocks” make it difficult to predict.

Stephanie Rice: 360-735-4508; http://facebook.com/reporterrice;http://twitter.com/col_clarkgov;stephanie.rice@columbian.com.