|By Arnold M. Knightly, Las Vegas
Review-JournalMcClatchy-Tribune Regional News
February 7, 2009 --While Station Casinos plans to file for bankruptcy in March, a joint venture of the casino company plans to seek financing and break ground within weeks on a $200 million American Indian casino in Michigan.
Station Casinos spokeswoman Lori Nelson said its tribal gaming contracts wouldn't be affected by the restructuring because contracts are held separately from the casino company's financing structure.
Station Casinos announced late Tuesday its plans for prepackaged bankruptcy pending approval from investors holding $2.3 billion of the company's $5.4 billion debt load.
Dennis Farrell Jr., a bond analyst for Wachovia Capital Markets, agreed the pending bankruptcy would not affect financing for the new casino.
"It will be financed on its own and Stations will help support the project," said Farrell, adding that the company will collect a management fee once the casino opens.
The locals gaming company has financed other projects under this structure.
The newly opened Aliante Station, which is a 50-50 partnership with the Greenspun Corp., was financed with $260 million in partner equity and a $391 million term loan against the property, not against other assets in Station Casinos' portfolio.
The Michigan casino was able to move ahead when a 10-year legal struggle by the Gun Lake Tribe, also known as the Match-E-Be-Nash-She-Wish Band of Pottawatomi, ended Jan. 30. At that time, the U.S. Department of Interior authorized the placing of 146 acres into trust. That move was made possible when the U.S. Supreme Court decided Jan. 21 not to hear an opposition group's petition to block the casino.
The tribe's gaming compact should be voted on in the Michigan Legislature in the next few weeks, tribe spokesman James Nye said.
He said the tribe plans to break ground on the casino in the next "several weeks."
It would take nearly 16 months to convert an old 192,000-square-foot factory and warehouse into a casino with up to 2,500 slots machines, 75 table games, restaurants and a buffet.
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