Business & Real Estate

Rockin’ mega-casino headed to the Sacramento region

A Hard Rock casino-hotel is coming to the outskirts of greater Sacramento, upping the competitive ante in the region’s increasingly crowded gambling market.

The Hard Rock Cafe International chain has announced it will partner with the Enterprise Rancheria Indian tribe to build a mega-resort in Yuba County, not far from the Toyota Amphitheatre in Wheatland.

“The Enterprise Rancheria is thrilled and honored to work with Hard Rock International, one of the world’s most recognized brands,” said tribal Chairwoman Glenda Nelson in a prepared statement. Hard Rock, which operates 11 casinos, including one at Lake Tahoe, called the Sacramento area “a great fit for the brand.”

While preliminary site work is under way, neither Hard Rock nor the Enterprise tribe would discuss details about the resort. However, credit-rating agencies that have reviewed the project’s financial documents say the resort will cost about $440 million and is expected to open in October 2019. A report by Moody’s Investors Service said the resort will be known as Hard Rock Sacramento.

Ken Adams, a casino consultant in Reno, said the Hard Rock is likely to put pressure on the region’s major tribal casinos — Thunder Valley in Lincoln and Cache Creek in Yolo County. “That’s an entirely different competitor,” he said of Hard Rock. “Their corporate resources are so much larger than anybody else’s.”

Hard Rock International is owned by the Seminole Tribe of Florida, which operates two casino resorts under the Hard Rock brand.

Thunder Valley in Lincoln, considered by Adams and other experts as the most financially successful casino in greater Sacramento, tried unsuccessfully to block the Yuba County project but now says it’s prepared for the competition.

“We’ll continue to be the dominant player in the region, given our location and our established customer base,” said casino spokesman Doug Elmets. “We don’t believe that the (Enterprise) casino will have a significant impact on Thunder Valley given its isolated location.”

Thunder Valley, located about 20 miles south of the Enterprise site, recently completed $56 million worth of upgrades, including an expansion of its hotel and the addition of a poker room and bingo hall.

Meanwhile, two more tribal casinos are in development in the region. Caesars Entertainment Corp. and the Buena Vista Band of Me-Wuk Indians announced they broke ground in April on a $168 million casino outside Ione, about 30 miles east of Sacramento. The Wilton Rancheria tribe plans to build a $400 million casino, hotel and conference center in south Elk Grove, although it hasn’t yet scheduled a groundbreaking.

Yuba County officials, who’ve been struggling for years to develop the area around the amphitheater into an entertainment and hospitality center, welcomed the Enterprise project.

Planned Hard Rock casino site map

County Supervisor Gary Bradford, whose district includes the casino site, said the resort can “help spearhead other things in the area. ... Hopefully, this will be just the start of future projects.” He said the tribe has agreed to send the county up to $5 million a year in payments in lieu of taxes, and earlier this year county supervisors approved a deal with the tribe that provides fire and emergency services to the casino.

For Enterprise Rancheria, the Hard Rock announcement represents a remarkable turnaround in what has been a long and difficult quest to get into the casino business. The tribe first applied to the federal government in 2003 for permission to acquire the Yuba property.

Two years ago it finally broke ground on a smaller, $170 million casino known as Fire Mountain Resort. But a few months later it was forced to halt construction because of legal and financial obstacles. Thunder Valley, Colusa Casino and anti-gambling groups were suing to block the project, saying Enterprise didn’t have the legal right to build a casino 35 miles from the tribe’s ancestral grounds near Oroville. Because of the litigation, the Enterprise tribe said it couldn’t secure permanent financing for the project.

Since then the tribe has cleared up its problems. Although tribal casinos generally must be built on ancestral lands, the courts said the Enterprise tribe, formally known as the Estom Yumeka Maidu Tribe, could be granted an exception because most of its original home was wiped out when Oroville Dam was built in the 1960s. A federal appeals court in May tossed out the lawsuit.

The tribe also has secured permission to operate slot machines and other games of chance, putting it on a more equal footing with existing tribal casinos.

When it broke ground on the Fire Mountain project in 2016, Enterprise only had the right to run electronic versions of bingo and other games. Enterprise’s efforts to obtain a so-called Class III license — allowing the tribe to operate a full-fledged, Vegas-style casino — had been stymied after the Legislature refused to ratify a gaming compact negotiated with Gov. Jerry Brown. State compacts govern tribal casino operations.

After a federal judge ruled the state was acting in bad faith, the U.S. Interior Department intervened. The department, which regulates tribal casinos on the federal level, stepped in and granted the tribe the equivalent of a Class III license. The tribe will be allowed to open the casino with up to 1,600 slot machines and add another 500 slots after two years.

Slot machines are generally considered the biggest profit center in a casino.

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