The Saint Regis Mohawk Tribe and Park Place Entertainment Corporation (NYSE: PPE) today signed comprehensive development and management agreements that will govern the construction and operation of the Tribe’s planned $500 million casino and resort complex in Sullivan County.
The agreements were signed in a formal ceremony at the legendary Kutsher’s Resort Hotel and Country Club in the Catskills town of Thompson, near the planned site of the 750-room resort hotel and 130,000 square foot casino.
“These agreements will help us move the Mohawk casino and resort complex off the drawing board and onto the construction site,” said Saint Regis Mohawk Tribal Council Chief Paul Thompson.
“This project will provide the Saint Regis Mohawk Tribal Council with the necessary resources to improve the sub-standard of living that currently prevails in our community. We hope to guide the Saint Regis Mohawk Tribe on the path to economic recovery and self-sufficiency,” Chief Thompson said.
“As the world’s largest gaming company, Park Place is honored to be partnering with the Saint Regis Mohawk Tribe on this very exciting project,” said Park Place President and Chief Executive Officer Thomas E. Gallagher. “The Saint Regis Mohawk casino and resort will bring hundreds of millions of dollars of investment to Sullivan County and create thousands of local jobs, both during and after construction,” Gallagher said.
In addition to providing 2,000 construction jobs and thousands more permanent positions for casino employees, the project will generate millions of dollars in annual tax revenue for the New York State and $15 million a year in direct payments to Sullivan County, the Town of Thompson and locally impacted entities.
“The agreements signed today put the Saint Regis Mohawk project well ahead of the pack in New York State,” said Park Place Senior Vice President Kim Sinatra. “We’re ready to break ground as soon as the Tribe finalizes its compact with the state and receives the remaining government approvals. In our view, the Saint Regis Mohawk casino is on the fast track.”
The casino and resort will be built on a 66-acre site to be held in trust for the St. Regis Mohawk Tribe. Park Place has acquired an option to purchase an additional 1,350 acres of adjacent Kutsher property.
In addition to the hotel and casino, the project will feature 15,000 square feet of meeting space, eight restaurants and a spa.
Under the terms of the agreements signed today:
* Park Place and the Tribe will develop and construct the Mohawk casino and resort and other related facilities, including a parking garage, on the Kutsher site.
* Park Place will secure construction financing for the majority of the development costs from a financial institution on behalf of the Tribe.
* Park Place will manage the Mohawk casino and resort for an initial term of seven years, which is renewable upon the consent of both parties.
* The Tribe will receive 70 percent of EBITDA (earnings before interest, taxes, depreciation and amortization) from casino and resort operations, with a guaranteed minimum payment of $9 million a year.
* Park Place will receive a management fee of 30 percent of EBITDA from casino and resort operations.
* While the Sullivan County project is under development, the Saint Regis Mohawk Tribe will grant Park Place exclusive development rights for any new Saint Regis Mohawk casino projects in New York State, excluding the Tribe’s Casino and Bingo Palace in Akwesasne.
* Park Place will not manage or have any other interest in any non-Mohawk tribal casino projects in New York State within 50 miles of the Sullivan County Mohawk project.
In addition to finalizing a compact with the state, the Saint Regis Mohawk Tribe must receive the approval of the Bureau of Indian Affairs for its Land into Trust Application. The National Indian Gaming Commission must approve the Tribe’s Management Agreement with Park Place and local officials must grant zoning and construction permits.