By Onell R. Soto, STAFF WRITER

The Viejas Band of Kumeyaay Indians said yesterday that it plans to build an $800 million casino-hotel resort – the most expensive in the state – just east of its existing 2,500-slot casino and outlet mall.

As envisioned, the new resort 35 miles from downtown San Diego would feature 2,500 slots, a 600-room hotel, a pool, a spa, shops, restaurants, a conference center, a multiplex movie theater, two parking structures and a new power plant.

“It’s a huge deal,” said Viejas Chairman Bobby Barrett, noting that the plans are still in the works and the numbers may change.

The tribe’s general council – made up of all its adult members – approved the plan Wednesday, Barrett said. The tribe hopes to complete construction in five years.

It’s a bold move for a tribe that has changed chairmen and seen the head of its business units leave in the past year.

If built, the new resort would make Viejas the first tribe in California to have two side-by-side casinos and the second to have two casinos. Agua Caliente has casinos in Palm Springs and Rancho Mirage.

The Viejas project is nearly as expensive as the $1 billion hotel and convention center that Gaylord Entertainment has proposed in on-again, off-again negotiations with Chula Vista. Gaylord’s development would have three times as many rooms, and it wouldn’t have a casino.

“They’ll be going after a different market,” said David Peckinpaugh, CEO of the San Diego Convention & Visitors Bureau.

“(Viejas’) focus is primarily leisure,” Peckinpaugh said. “Not group business, convention business.”

Lyn Baxter, interim CEO of Viejas Enterprises, the tribe’s business arm, said: “It’s not just about the slots. It’s more about a complete resort experience.”

The new Viejas resort would be the most expensive casino in the state, said Michael Lombardi, a gambling consultant who has run several tribal gambling operations.

“Eight hundred million dollars? Oh yeah, absolutely,” Lombardi said. “Now you’re talking.”

There’s plenty of demand in Southern California for such a large project, if done the right way in the right place, Lombardi said. Viejas is close to a freeway and near urban areas.

San Diego County casinos are bringing in about $300 per slot machine per day, analysts say.

“The demand for slot machines is greater than the supply,” Lombardi said.

The resort plans also open up the possibility that there eventually could be three casinos on the Viejas reservation.

The Ewiiaapaayp (pronounced WEE-a-pye) band has signed a deal with Gov. Arnold Schwarzenegger to put a casino on the Viejas reservation, although the federal government has indicated that it would reject it.

Several casino observers had the same reaction as Cheryl Schmit when told of the Viejas plans: “Wow.”

A casino that big could be a risk, said Schmit, who heads Stand Up for California, a state gambling watchdog group. However, she said, it shows that Viejas is willing to set itself apart not only in what it does, but how it does it.

Many tribes have done casino expansions piece by piece. The Viejas plan calls for the tribe to plan everything and enter into a deal with county officials on how it will deal with all the impacts, Schmit said.

“It’s different than the ways tribes have done it in the past,” she said.

Barrett, the tribe’s chairman, said he knows Viejas will have to deal with how its project affects traffic, water, problem gamblers and other issues.

“We will be sitting down with our neighbors,” he said.

Viejas opened the county’s third Indian gambling hall, a 10,000-square-foot card room, in 1990 and expanded it three times so that it is now home to more slot machines than any other.

A 1999 compact allowed Viejas and a number of other tribes to operate two casinos each, but capped slots at a total of 2,000 per tribe.

In 2004, the tribe signed a new deal with Schwarzenegger allowing it as many slot machines as it wants. But the extra machines come with a catch: Contributions to the state ratchet up.

While the tribe now pays the state $12,000 a year for each machine it has over 2,000, the next set of machines will cost more. Contributions to the state will top out at $25,000 per machine if it goes over 4,500 slots.

Last year, Viejas Casino brought in about $300 million, according to the tribe.

After salaries, taxes, goods and services and other expenses, the tribal government said it ended up with a quarter of that, which was spent on a variety of services: fire protection, health care, education, roads, water and sewers. What remained was divided among the 213 tribal members, it said.

“We need the revenues that we can generate to sustain the lifestyles that we currently have for the children and the generations that aren’t here yet,” Barrett said.

The huge new resort would be part of a third wave of casino expansions in the state. The first started in the 1980s and ’90s, before slots were legalized. The second began when voters approved Proposition 1A in 2000. This one started with deals signed in 2004 that allowed some tribes unlimited slots.

The Pauma Band in North County is proposing a $300 million resort with the help of a Connecticut tribe. Its neighbor, Pala, is planning to spend $100 million to expand its casino.

Sycuan signed a compact that would allow it to build a second casino on a golf course it owns near its reservation, but that deal will require approval from the federal government and, possibly, California voters.

Before construction begins on the new casino, Viejas will have to pay for environmental studies and negotiate an agreement with the county, said John Snyder, the county’s public works director.

Snyder is the point man for negotiations with the tribes, and he said a 48,000-square-foot expansion last year at Viejas was seen as a practice run for this larger project.

“It’s likely that we will be able to work together and reach agreement,” Snyder said.

First on the list for Dr. Jane Fitz, an Alpine Planning Group member, will be traffic. “They need to build their own off-ramp from the freeway,” she said, concerned about drivers on roads near her house, three miles from the existing casino.

Fitz also is worried about water. “Right now they’re using groundwater, and I don’t see how that can support what they’re planning, particularly with the drought that we’ve been having.”

The tribe said that it believes there’s enough water on the reservation for its expansion plans, but that it’s also working on buying water from Northern California or the Colorado River.

It has an agreement to store water underground in Kern County.

“I don’t really see that as a viable plan,” Fitz said. “It’s something that will rob Peter to pay Paul.”

Onell Soto: (619) 293-1280; onell.soto@uniontrib.com
© Copyright 2007 Union-Tribune Publishing Co.

Posted on August 24th, 2007 by admin
Filed under: Gaming, Hotel & Resorts