Much like the U.S. commercial casino industry, tribal gaming has suffered a dearth of new, ground-up development over the past four years or so, the result of a depressed national economy combined with recent court/government decisions that have limited the ability of Native American nations to construct off-reservation wagering facilities.
The news has been better of late-the Department of Interior recently announced that a number of decisions that could ultimately revive a tribe’s ability to place land into trust for the purposes of off-reservation gaming and large-scale Indian gaming projects are under consideration in Massachusetts, New York, Oregon and California. But the negative trends of the past few years are likely to carry forward into 2012, meaning extensive greenfield casino development within the Indian gaming marketplace is uncertain at best for the foreseeable future.
“Revenue and cash flow trends for most tribal gaming operators have stabilized in 2011, after growth came to a standstill during the recession. However, regional economic weakness and the still-sluggish labor and housing markets continue to limit growth opportunities,” wrote Fitch Ratings in a report it released late last year.
The development news is not all bad on the tribal gaming front, however. According to Nathan Associate’s annual Indian Gaming Industry Report, the industry has grown to become a $26 billion a year business; and while revenues were off 1 percent or so in the latest report, tribal facility performance still overwhelmingly outpaced its commercial counterpart, which saw declines of 8 percent or more over the same time period. Indeed, some predominately Indian gaming markets such as Oklahoma actual grew upwards of 7 percent a year over the course of the recession.
“Tribal gaming grew at a slower rate during this downturn than they did prior to it, but they were growing at a faster rate than almost the rest of the gaming industry as a whole,” said Robert F. Kelly Jr., president of Innovation Project Development, a multi-disciplined project management services company capable of providing consulting advice or total development oversight that has worked as an owner’s representative for a number of tribal entities. “Because of their unique locations, people were traveling less to the big destination resorts and going to their local tribal casinos which increased their foot traffic and, ultimately, their revenue.”
To respond and take further advantage of this uptick in attendance and profits, a growing number of Indian gaming properties have undergone or are undergoing renovations and expansions. “Really, it’s simple economics,” Kelly said. “Tribal properties are doing well economically, and are expanding to address current market conditions. They are willing to invest to keep their market share and guests.”
Of course, there are also reasons beyond pure economics as to why so many tribes are redesigning and expanding facilities these days.
“Properties certainly get tired; they just get physically worn out,” said Dike Bacon, principal of Memphis, Tenn.-based Hnedak Bobo Group, an architecture and design firm that has worked with 25 gaming tribes-most recently on the Four Winds Hartford Casino in Hartford, Mich., and the Northern Quest Resort &Casino in Spokane, Wash.-and derives 75 percent of its business from the Indian gaming marketplace. “This can lead to customers getting tired as well and developing a ‘been there, seen that, done that’ mentality. If you want your good customers to remain loyal, you need something new, fresh or different to keep them coming through the door.”
A renovated look, design or layout, if properly conceived and developed, can go a long way to accomplishing this goal. “It’s all about spiking business, not just refreshing carpet and paint,” said Rick Gardner, AIA and senior partner with Hnedak Bobo Group. “Given that all your direct competitors likely have casino, hotel, restaurant and entertainment similar to what you have, design is often the only differentiator.”
Redesigning and expanding tribal properties presents other unique challenges as well. For example, although their markets conditions may be better, most Indian casinos operate under the same recession-style budgetary constraints as the commercial gaming industry. The days of unlimited economic resources to realize grandiose design visions are long gone.
“You start out with a vision, every owner has one,” Kelly said. “Then you negotiate with lenders to figure out what you can actually afford to build. It’s a collaborative process and concessions often need to be made. At the end of the day, you need to have balance between your capital costs and return on investment. You don’t want to sink $100 million into project design and find later that you can’t make any money with it.”
Coming to agreement on cost and design is not always pleasant, and sometimes can be a time-consuming process, especially when a tribal government has to placate a number of different and often disparate interests.
“The design approval process is different,” Gardner said. “Consensus has to be built within the tribe and councils so the pace tends to be slower than it might be with a private company. But it is a necessary process-tribes tend to serve a much different kind of internal clients than commercial casino developers.”
Here are some recent tribal casino expansion and renovation projects that managed to find the balance between cost and game-changing design:
El Cajon, Calif.
Under the ownership and operation of the Sycuan Band of the Kumeyaay Nation, Sycuan Casino has undergone three major expansions since its establishment as a bingo hall in 1983. The latest was last year, when the property underwent a $28 million upgrade that involved the integration and facelift of two stories of gaming amenities. A new design vision, brought to life by Hnedak Bobo Group, featured updated and completely new high-end amenities with the ultimate goal of transforming the highly competitive property into the premier gaming and entertainment experience for the greater San Diego region.
According to Hnedak Bobo company literature, key to the design are a more unified gaming and food and beverage experience, enhanced views and better circulation to all amenities. The new interior features a sophisticated design aesthetic and rich color palette. Signature features include a new entry and grand stair, providing guests with a more exciting welcome experience, while visually integrating the two existing casino levels.
“What we did with the casino was pretty dramatic,” Gardner said. “Much of it involved re-organizing the circulation and flow through the casino and re-branding the casino and some of the food and beverage and other special venues. The previous aesthetic was a hybrid-Moroccan-very highly themed. We stripped away a lot of that that and introduced a much more contemporary aesthetic.”
A new 6,500 square foot sports bar and grill was also a significant addition, according to Gardner. Designed to appeal to the region’s younger demographic, the new venue provides large-format monitors for “in-the-action” sports viewing, oversized murals of sports photography and a ceiling active with elements that simulate high-energy movement.
“I think we built the best sports bar in southern California,” Gardner said. “Overall, we had a very good experience with the tribe and a nice outcome there.”
When it came time to update its gaming property, the Pascua Yaqui Tribe decided to go big, spending $130 million to add a 161,000-square-foot hotel, spa and convention center to the existing casino facility. At the core of this expansion was the goal to become and remain the leading casino property in the region, according to Innovation Project Development’s Kelly, whose company assisted the Pascua Yaqui Tribe with Casino Del Sol’s design and development process.
“The desire of the tribe was to grow their business,” Kelly said. “We sat down with the tribe, listened to their vision and worked with the architects to create a master plan that would fit their business plan and their ultimate ability to make money with their expansion.”
The expansion, which was unveiled last November, adds 215 new luxury hotel rooms, along with a conference center that can accommodate up to 2,000 people. The addition also brings a new fine-dining steakhouse that can accommodate up to 100, an international buffet with seating up to 250, an elaborate lobby lounge and bar, a full spa and outdoor pool with sundeck, exercise ffacilities and a warehouse.
“This project is about more than just opening up a beautiful resort in the Sonoran desert,” said Wendell Long, CEO of Casino Del Sol Resort in a prepared statement. “We are creating hundreds of jobs and boosting the local economy, something that the Pascua Yaqui tribe is very proud of.”
The Pascua Yaqui Tribe turned to LEO A DALY, a Washington, D.C.-based international architecture and design firm, to create the new design and integrate it with the existing casino. DALY accomplished this task with the resort’s most prominent design feature, an illuminated copper dome topping the 10-story hotel, which serves as a beacon for guests and exemplifies the Tuscan theme found throughout the casino and the resort addition. The dome, built out of perforated copper and housing color-changing LED lights, measures 26 feet in diameter, is 26 feet tall and weighs 11,000 pounds.
“The tribe has gone to the next level to create an elegant resort and memorable experiences for visitors,” said Ronn Lansky, associate and executive director for LEO A DALY’s Phoenix office.
The Confederated Tribes of the Umatilla did not skimp when it came to the latest expansion for their Wildhorse Resort Casino complex in Oregon. The $45 million addition, which had a soft opening last September, will eventually include a 10-story Tower Hotel with 202 hotel rooms, three new meeting spaces, fitness area, retail space, and 3,500 square foot pool building. The expansion also extended the current casino’s gaming floor by 24,000 square feet, allowing up to 1,400 additional slot machines and a five-screen Cineplex.
The tribes took an active role in the design of the expansion, insisting it reflect the motifs and heritage of the Umatilla Indian Reservation. Las Vegas-based Thalden, Boyd & Emery Architects were up for the challenge and created a facility design that was a “culmination of nature, tribal history and the future,” according to materials supplied by the tribe.
Both the interior and exterior evoke a clean and modern style-“Plateau Architecture”-which reflects the region, in its history and geology. The style conveys an optimistic vision of the future for the Umatilla but is rendered in natural materials to make a connection with the past.
The exterior architectural form of the Tower Hotel is a reflection of the “Cayuse Sisters.”
The design intent was to form a beacon so “you can see it for miles.” Copper, a traditional material used in personal adornment, is woven into accent details on the exterior to achieve the same effect.
The interior design is infused with references to traditional materials that were significant to the life and, culture of the Umatilla. Trade goods such as Dentalium Shells are represented in polished and honed white tile. Abalone is referenced in the use of mother-of-pearl in several forms as well as with iridescent glass. Obsidian was an imported material crucial to daily life and is represented primarily in jet-black glass mosaic tiles.
“We want the new property to be a beacon so there’s a sense of arrival when you get here,” said Wildhorse CEO Gary George when the project was first announced in 2010. “When you come down off of the Blue Mountains or travel east down I-84, we want you to see the property and know that you have arrived.”