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Tribe confident in casino financing

By Paul Grimaldi -- The Providence Journal, R.I.

PROVIDENCE, R.I. (MCT) - The American Indian tribe counting on Twin River;s parent company to help bankroll a casino in Massachusetts says it remains confident that the money will be there when the time comes to build a gaming hall.

''We have always said that the tribe will be able to fully finance whatever they build and that hasn't changed,'' said Scott Ferson, a spokesman for Mashpee Wampanoag Tribal Council Chairman Shawn Hendricks. ''There's nothing that we've heard that gives us concern.

''[BLB Investors LLC] remains the lead investors.''

The Mashpee Wampanoags won federal recognition a year ago, giving them the right to operate a high-stakes bingo hall. They want to open by 2010 an entertainment destination of slot machines, table games, a hotel, a golf course and other attractions similar to the complexes in Connecticut run by the Mashantucket Pequot and the Mohegan tribes. For that, the Wampanoags would need approval from the Commonwealth of Massachusetts.

The Wampanoags plan to spend $1 billion on a casino resort in Middleboro, Mass., money they expect to get from an investment syndicate drawn together by BLB Investors.

The plan is under review by the BIA, which held a public hearing the night of March 25 regarding the tribe's related application for federal trust status. That hearing was the beginning of an environmental review of the Wampanoags' plan and did not address the project's financing.

While the Wampanoags slog ahead with their casino plans, BLB's gaming operations have hit a muddy patch its representatives say was caused by tightening credit markets and more generalized economic worries.

BLB Investors, owned jointly by Kerzner International Ltd., Starwood Capital Group and Waterford Group, acquired the former Lincoln Park and four Colorado racetracks in a 2005 purchase from Wembley PLC. BLB paid $464 million for the Wembley properties.

The partners also receive a 5 percent dividend on the gross revenue at the Mohegan Sun casino in Connecticut, which they developed. The dividend continues until 2014.

BLB controls its Rhode Island and Colorado holdings through separate subsidiaries, UTGR Inc. in Rhode Island and Mile High Racing and Entertainment in Colorado.

UTGR is behind schedule on restructuring the loans it used to buy and rebuild Lincoln Park. It still owes $557 million on the Lincoln property - since renamed Twin River.

Its Colorado subsidiary scrapped a ballot initiative for video slots for its four racetracks in that state. If approved, the initiative would have allowed the company to install electronic gaming devices at its tracks in Arapahoe Park, Colorado Springs, Commerce City and Pueblo. The devices would have come as part of $250 million, combined, in renovations BLB planned at the tracks.

''We just didn't feel it was the right time,'' said Craig Eaton, general counsel for BLB. ''We're continuing to look at how to maximize our assets.''

UTGR has not asked Rhode Island officials to rework the payments it makes to the state out of Twin River's revenue.

For every $100 netted by Twin River's video slot machines (after paying out prizes), the state takes about $61. Altogether, the state expects to take in about $243 million from Twin River's video slot terminals for the fiscal year that ends June 30, and about $256 million for the year that will start July 1.

''We have not asked the state for any change in the revenue agreement,'' said Patti Doyle, Twin River's spokesman. ''We're locked in.''

The details of payouts the Mashpee Wampanoags would make to Massachusetts and its communities are yet to be worked out, according to Ferson, the tribe's spokesman.

''The state has a separate discussion about how best to raise [its own] revenue,'' he said. ''The tribe can be a part of that but it cannot be the whole answer.''

As for the discussions at the March 25 hearing before the BIA, ''the environmental questions were thoughtful and on point,'' Ferson said. ''That information will be folded into the draft [building proposal].''

About 300 people turned out at Middleboro High School for the hearing, many carrying signs supporting one side or the other over the request by the Wampanoags to have the federal government take the land into trust for them in this town about 30 miles east of Providence.

A decision by the BIA favoring the Wampanoags is a precursor to the tribe building the Middleboro casino. The tribe is seeking the same trust designation for 140 acres in Mashpee for a reservation.

The tribe wants to build the casino in two phases. The first would include a 600,000-square-foot gaming hall on two levels, with 4,000 slot machines and 200 table games, as well as an array of restaurants, retail shops and an event center. That phase would also include a hotel with 1,000 to 1,200 rooms - scaled down from the 1,500 initially proposed. The second phase would include a golf course and other recreational facilities.

More than 50 people spoke at the hearing, putting their views on record in three-minute intervals at a microphone set before video cameras, audio recording devices and a dais behind which a pair of BIA officials sat, overseeing the commentary.

The speeches touched on a number of issues, from the historic grievances of the tribe to a potential economic boom a casino would bring to the area, and the possible environmental and societal harms a gaming resort could foster.

''This is reservation shopping, pure and simple,'' said Mark Belanger. ''What the Mashpees should get is a Class II [slot machine] facility in Middleboro.''

Virginia Bowman, a recent transplant from San Diego, spoke about how a tribe there handled its casino development.

''The impact on the area economically was absolutely of a positive nature,'' she said. ''The people of the area trusted to the Barona Indians to respect the environment, and this they did.''

Copyright (c) 2008, The Providence Journal, R.I. Distributed by McClatchy-Tribune Information Services.