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Parent Company of Las Vegas' Hard Rock Hotel Reaches Agreement
 with Pauma Band of Mission Indians for $300 million
 Hard Rock-themed Destination Resort/Casino
 near San Diego
By Chris Jones, Las Vegas Review-Journal
Knight Ridder/Tribune Business News

Feb. 4, 2005 - Rome wasn't built in a day. And now it won't be built at all in suburban San Diego.

Sixteen months after it tabbed Las Vegas-based Caesars Entertainment to develop and operate a $250 million, Roman-themed hotel-casino in Southern California, the Pauma Band of Mission Indians said Thursday it has reached a new agreement with the parent company of Las Vegas' Hard Rock Hotel.

Plans call for a $300 million development on tribal land east of Interstate 15 off state Route 76. The Hard Rock-themed property would include a casino with 100 gaming tables and 2,000 slot machines; a spa; restaurants; and a 300-room hotel.

"We expect this will be a world-class resort destination," said Hard Rock President Kevin Kelley, whose company hopes to open its first hotel-casino outside Las Vegas in late 2006, pending approval by the National Indian Gaming Commission.

Kelley also said the site would have a concert venue slightly larger than The Joint, a small Las Vegas hall that can accommodate up to 2,200 people.

"We want to have the best concerts in the country there, just like we do in Las Vegas," he said. The Joint last year hosted acts such as David Bowie, Green Day and Velvet Revolver.

Tribal leaders in recent months repeatedly declined to publicly discuss the status of their September 2003 agreement with Caesars Entertainment, then known as Park Place Entertainment. But speculation that the deal was in jeopardy arose last summer when Las Vegas-based Harrah's Entertainment said it would acquire Caesars in a $9.4 billion deal that's still awaiting regulatory approval.

Harrah's in August 2002 opened a 58,000-square-foot casino near the Pauma site on land controlled by the Rincon San Luiseno Band of Mission Indians. A $165 million, 460-room hotel and casino expansion opened in December, and insiders questioned whether Harrah's or the Rincon tribe would welcome a competing Pauma casino in such close proximity.

Pauma leaders fueled more speculation the Caesars deal was in trouble in August when they asked gaming companies to submit new casino proposals, an opportunity Hard Rock quickly seized. A Caesars spokesman at the time said his company was still optimistic it could still reach an accord with Pauma leaders, but those hopes were dashed this week.

"Persistence pays off," said Kelley, who learned of the new Pauma deal Tuesday evening. "We've developed a great working relationship with the tribe. Our chairman (Peter Morton) really hit it off with the tribal council, and they've realized our brand has a lot of appeal in that area."

Pauma Tribal Chairman Chris Devers did not return a call placed Thursday afternoon.

Other bidders, Kelley said, included Las Vegas-based Ellis Gaming, which runs tribal casinos in Canada, Oklahoma and central California; as well as the Mashantucket Pequot Tribal Nation, which operates the Foxwoods casino resort in Mashantucket, Conn.

Hard Rock in September said it will build a $1 billion hotel-condominium complex on 24 acres adjacent to its Las Vegas hotel-casino. Kelley said Thursday that project is moving forward "at light speed" but added the Pauma development would be an equal priority for the company. He said it's too soon to speculate which executives will run the Pauma site, though he expects to interview candidates from inside and outside the company.

George Smith, a gaming analyst with Richmond, Va.-based Davenport & Co., said Thursday that the Hard Rock should do well in San Diego.

"Competition is heating up in terms of the number of Native American casinos attempting to cater to the (Southern California) market, but this is a great opportunity for Hard Rock," Smith said. "Applying their brand name can take things to the next level."

Kelley hopes to cross-promote the two properties, bringing Southern California customers to its Las Vegas venue while driving Southern Nevada locals to Pauma Hard Rock when they visit San Diego.

-----To see more of the Las Vegas Review-Journal, or to subscribe to the newspaper, go to http://www.lvrj.com.

(c) 2005, Las Vegas Review-Journal. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com. CZR, HET,

 
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