Council approves $80 million for casino expansion

from Smoky Mountain News | November 4, 2020

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Ask How MSM Can Help! Council approves $80 million cost increase on casino expansion

resolution. He has a right to respond to those allegations, which is not going to happen at 6:30 in the evening today.”

Legislative Counsel Carolyn Ward told Council that Cherokee Supreme Court precedent holds that Tribal Council has the right to remove board members for cause by majority vote without a hearing, because the seat is not a property right. However, several council members spoke up to say that giving a person a chance to respond to accusations of lawbreaking seemed like the right thing to do, and Chairman Adam Wachacha pointed out that there is currently no written procedure in place regarding board member removals and that in the past the process has been handled differently at different times.

“I think that’s the right thing to do, to give everybody the right and ability to defend themselves,” he said.

Council voted 10-2 to table the resolution, with Crowe and Rose opposing the majority. Wachacha said that he would set a hearing date for late November.

DECISION TO ENTER CLOSED SESSION

Council’s vote to approve expanded funding for the casino project came after 90 minutes of discussion, more than 60 of which took place behind closed doors. When the body tabled the request Oct. 26, members complained that the resolution had been submitted without any backup documents justifying the heightened expense and that the TCGE should have Birdtown Representative Albert Rose (left) addresses TCGE members during an Oct. 26 Tribal Council meeting. EBCI image paused the project once it realized that the true cost would be well over $250 million, BY HOLLY KAYS STAFF WRITER RESOLUTION SEEKS waiting for Council approval before moving forward. During that session too, the body T ribal Council voted 11-1 during Annual Council Oct. 29 to approve the Tribal Casino Gaming Enterprise’s request to TCGE CHAIRMAN’S REMOVAL Wolfetown Representative Bo Crowe, the participated in a lengthy closed session discussion following the open session conversation but did not come to an agreement borrow up to $80 million more than the $250 only member to vote against the resolution that day. million initially budgeted to finish an expan- Oct. 29, responded to the vote with a walk-in On Oct. 29, TCGE board members were sion project at Harrah’s Cherokee Casino resolution at the end of the day seeking to accompanied by Zeke Cooper of Resort in Cherokee. The decision came fol- remove TCGE Chairman Jim Owle from his Dreamcatcher, the developer on the project, lowing an hour of closed session discussion position. who brought along stacks of documents for and just four days after initially voting to The resolution claims that, under Owle, Council to view. table the request. the TCGE has not been complying with tribal However, Council members were not

“I just want to explain that the reason I hiring preference laws and outlines the pro- happy about receiving large packets of inforvoted to do this is because the project has to tracted exchange between Tribal Council mation minutes before being expected to be finished. It has to be completed,” said members and the TCGE Board that followed vote on the request, or about the fact that it Birdtown Representative Albert Rose, who when in December 2019 Crowe requested was a Dreamcatcher representative, not the had expressed strong displeasure with the minutes from TCGE meetings. The request TCGE board members, who was explaining request when it was first discussed publicly was eventually fulfilled April 21, but key the issue. Oct. 26. “We’ve got down to why it’s running information regarding specific budget items “Why don’t we have a work session? This over, and they answered my questions, so was redacted, making it impossible for Tribal is ridiculous,” said Painttown Representative that’s all I got right now.” Council to do its due diligence in reviewing Tommye Saunooke. “Pass this stuff out and

While council ultimately approved the the gaming operation’s annual revenue and expect us to know it today? I need time to funding, multiple members said that they expenses, the resolution said. Finally, the res- review it.” were upset by the way the project had been olution took issue with the ballooning cost of “This here kind of demonstrates about handled. the casino expansion and particularly with how this project’s been run from the word

“I understand that this has to happen in the fact that the TCGE submitted the resolu- ‘go,’” Rose added. “You’re going to come in order for the project to be completed,” said tion requesting additional funds “without here and pile all this on us that we’ve been Wolfetown Representative Chelsea any explanation or backup.” asking for how many months?” Saunooke. “It’s not the way I want business to Oct. 29’s Council session was a long one, Cooper, however, said that the informabe done in the future.” and it was 6:30 p.m. before Crowe’s resolution he was handing out had been previously

Saunooke said that she plans to bring for- tion to remove Owle came to the floor. presented during a work session and that he ward legislation that will address capital con- “Mr. Owle has a right to defend himself,” merely wanted to highlight it again. tract guidelines as well as provide for a proj- Principal Chief Richard Sneed said after the Crowe then pointed out that one docuect manager that will act as Tribal Council’s consultant. resolution had been read. “These are allegations that are being brought forward in this ment he’d asked for was the contract with Dreamcatcher, but that F

the document was not part of the stack he’d just received. Cooper replied that he had copies of the contract but would like to go into closed session before reviewing them, and that council members would have to hand the copies back when the discussion concluded. When Ward pointed out that signed contracts are public record under tribal law, Cooper allowed that he could leave the contracts behind but would have to redact them first to remove anything that qualified as a trade secret, and that he expected Council would rather view the complete document instead.

Council ultimately conceded to Cooper’s request and voted to enter into closed session.

THE PLAN

According to casino spokesperson Brian Saunooke, when complete the expansion will feature a fourth hotel tower with 725 rooms to include 70 suites, a 2,000-space parking deck and a convention center with 83,000 square feet of sellable space. TCGE members told Council that the convention center will total 140,000 square feet including back-ofhouse space.

The project was first approved in January 2017 to include an 800-room hotel tower, a parking deck and a 100,000-square-foot convention center. It would cost between $150 and $200 million, Tribal Council was told, and giving the TCGE the OK to take out a $250 million loan would take care of any contingency spending.

However, on Oct. 26 TCGE Board Member John Houser told council that there were no actual plans backing up the $250 million figure and that a review from an independent auditor showed that the project was woefully underfunded to begin with.

A significant complication arose in 2018 when Tribal Council approved a retail project that, while a separate endeavor from the expansion at Harrah’s, intersects with that project in physical space. Approval of the retail development meant that the TCGE had to completely redesign the casino expansion project, Houser said, adding more than $30 million to the original project. In particular, accommodating the retail complex meant taking a more expensive approach to water and sewer infrastructure on the site.

Costs have also escalated since 2017 due to a booming economy and high demand for services at the time the project began, Houser said. The cost rose even more when the casino gave its input as to what specific features it required of the facility.

Houser said that the additional funds are necessary but allowed that the TCGE was “extremely disappointed” to be over budget, having spent six months on value engineering efforts that whittled away about $12 million but failed to cut costs sufficiently to stay within the budget.

Ground broke on the expansion in June 2018, and it’s expected to wrap up in fall 2021. The project is expected to bring in $17 million per year plus profits from conventions, Council was told Oct. 26, and the yetto-be-finished facility already has $15 to $20 million worth of pre-bookings.