Muscogee (Creek) Nation rejects Red Clay Casino proposal for Broken Arrow
BY SUSAN HYLTON World Staff Writer
Wednesday, December 12, 2012
12/12/12 at 7:18 AM
Read previous stories and key documents about the Kialegees’ planned casino.
OKMULGEE - A Muscogee (Creek) Nation committee rejected a proposal for the tribe to take over a controversial Broken Arrow casino project by a 7-2 vote Tuesday night.
Florida developer Luis Figueredo presented the proposal, which would have given the tribe 70 percent of the revenues from 475 gaming machines at the yet-to-be-completed Red Clay Casino.
The Red Clay Group's 30 percent share of revenues would have been expected to pay for construction of the casino and cover a $450,000 annual lease payment to Creek Nation-allotted land owners Marcella Giles and Wynema Capps, with the tribe given the option to purchase the land, according to a draft of the proposal.
According to the proposal, the landowners would have had the option of selling the five-acre site at the southwest corner of Florence Street (111th Street) and Olive Avenue (129th East Avenue) to the tribe for $5 million. The Red Clay Group would have reimbursed the tribe if the purchase took place before the sixth year of the agreement.
The developer's plan predicted that a smaller-venue casino in Broken Arrow would have less than a 1 percent to 2 percent impact on the Creek Nation's River Spirit Casino in Tulsa, which is preparing to start its second phase with a new hotel.
But Pat Crofts, CEO of Muscogee (Creek) Nation Casinos, told the committee that another casino would have "an immediate and very significant" impact on River Spirit, where an estimated 28 percent of the gambling business comes from Broken Arrow residents.
Another 10.5 percent of River Spirit's business comes from the Muskogee area, where the tribe also has a casino that Crofts said would also be significantly affected by a Broken Arrow casino.
"Eighty percent of people gamble at the most convenient location to their residence," he said. "We operate 11 casinos, and we know that to be a fact. One of the biggest challenges right now is competing with ourselves."
Crofts said he was asked to conduct a financial feasibility study on the impact to River Spirit when the idea of the Creek Nation's managing the Broken Arrow casino was proposed in September.
But National Council member Keeper Johnson, who sponsored the proposed legislation that would have authorized that business deal, said the city of Miami, Okla., has 11 casinos that make money and that he didn't think a casino in Broken Arrow would affect the tribe's other casinos.
"It's money we need for our Muscogee people. It's a win-win situation," he said.
Johnson predicted that the proposed casino in Broken Arrow would make millions of dollars for the tribe's people.
"This thing will really benefit the programs we need in the Muscogee Nation," he said.
The developers estimate that the casino would generate $15 million to $25 million a year for the tribe.
Although it was thought that discussion of the issue might take place in a closed, executive session, the speakers' comments, committee discussion and vote were all held in open session.
Originally, the Kialegee Tribal Town was going to lease the property from Giles and Capps for the proposed casino.
But construction was halted in May when U.S. Chief District Judge Gregory Frizzell ruled that the Kialegee Tribal Town, whose fewer than 450 members are also Creek Indians, did not have jurisdiction on the Creek allotment.
With that court defeat pending in an appeal to the 10th U.S. Circuit Court of Appeals in Denver, Figueredo and Shane Rolls had pitched the new plan in which the Creeks would receive a significant cut of the gaming revenues without having to invest a dime.
Creek Nation Chief George Tiger told the committee that he had spoken to Kialegee Town King Tiger Hobia about the possibility of a "nation-to-nation" project.
The chief said that if the committee thought the casino is something the tribe should pursue, the terms could be negotiated.
"I know that it's been controversial to some degree," he said. "The fact is that the Kialegee tribal members are our tribal members, too."
Tiger declined to state his official position on the proposal and told the committee it was their decision.
When asked again by reporters, he replied that he supports economic development.
Asked if he thought the casino in Broken Arrow could be beneficial, he said: "I don't know; that's a good question."
Tiger said it's up to the National Council whether the issue is addressed again in the future but that the issue seems to be dead for now.
"There's always public outcry as far as Indian gaming is concerned. ... I don't think that's relevant to whatever decision we make," he said.
Before voting on the issue, council member David Nichols cautioned that councilors shouldn't make a decision hastily and that an attorney should review the proposal.
"I remember a time when we didn't want to be tied up in management agreements," he said.
Committee members also mentioned having the tribe's gaming commission look at the proposal and cautioned against moving too quickly.
Voting in favor of the proposal were Franklin Coachman and Mark Randolph.
Those voting no were Shirlene Ade, Adam Jones III, David Hill, Robert Hufft, Dode Barnett, David Nichols and Darrell Proctor.
Mike Bergman, a spokesman for the group Citizens Protecting Native American Sovereignty, said after the meeting that he thinks the committee should have fully examined the pros and cons before deciding to reject the proposal.
"According to their own statistician, people gamble closest to their home. If this is true, and I think it is, they are losing valuable revenue to the Hard Rock (Cherokee Nation casino) now since the majority of Broken Arrow is closer to the Hard Rock Casino than the River Spirit Casino," Bergman said.
Jared Cawley, spokesman for Broken Arrow Citizens Against Neighborhood Gaming, provided a statement saying the group is grateful to the tribe.
"They recognized that this is not an appropriate business deal for the tribe or the city of Broken Arrow. There is a place for the casino, but it is not next to our homes, churches or schools. Hopefully, the developers will finally realize this as well," he said.
Original Print Headline: Creek panel shuns BA casino
Susan Hylton 918-581-8381
Red Clay Casino developer Shane Rolls (left), and Kialegee Tribal Town King Tiger Hobia listen as Red Clay developer Luis Figueredo (right) speaks to a Muscogee (Creek) Nation committee in Okmulgee on Tuesday. JAMES GIBBARD/Tulsa World