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Seminole Tribe Needs a Hotel to Go With Their Hard Rock Hotel & Casino Ambition

By Michael Sasso, Tampa Tribune, Fla.McClatchy-Tribune Regional News

Dec. 12, 2011--TAMPA -- The Seminole Tribe seems to have endless ambition for its Hard Rock Hotel & Casino in Tampa and enough money to pull it off.

The new 32,000-square-foot expansion of its gaming area should give it one of America's biggest gambling floors, at 220,000 square feet. That's the size of a Walmart Supercenter.

But there's one thing the tribe doesn't have: somewhere for all of its overnight visitors to sleep.

The casino's 250-room hotel is maxed out nearly every night, either through paying customers or gamblers given the rooms for free. A host of developers, nearby landowners and hoteliers have tried to capitalize on the demand, either by planning their own hotels or offering to build hotels on the Seminoles' behalf.

One entity that may not directly benefit, though, is Hillsborough County. County tourism officials years ago determined they couldn't require the tribe to collect hotel "bed taxes" to benefit local tourism. The amount the county forgoes in bed taxes will increase as the tribe adds hotel rooms.

How much money runs through the Hard Rock has been water-cooler gossip for years. One widely quoted figure is that 7 million people visit the Tampa casino annually, which comes to about 20,000 people a day.

Seminole Tribe spokesman Gary Bitner last year told the Tribune he couldn't confirm that figure, but said 20,000 a day is at least possible.

The Tampa Hard Rock is especially lucrative for the Seminoles. The location alone generates about half of the gaming-operating profit at the tribe's seven Florida casinos, estimates Alex Bumazhny, a debt analyst who follows the Seminoles for Fitch Ratings.

The Tampa casino profits from its local monopoly on Las Vegas-style slot machines and certain table games, while the Seminoles' South Florida casinos have to share the slot-machine market with dog and horse tracks, Bumazhny said.

To reach its potential, though, the tribe may need to greatly increase its hotel space.

The most valuable high-roller gamblers demand to get their rooms for free -- to be "comped" -- Bumazhny said. In some bigger gambling centers, such as Atlantic City, complimentary hotel rooms, meals and free gaming eats up about 30 percent of casinos' total revenue, Bumazhny said.

The tribe likely will also want to boost the average length of its customers' stay, increasing the number of multiday visitors compared with day-trippers, Bumazhny said.

For now, the tribe's hotel is bursting at the seams. The casino immediately could use another 500 to 1,000 rooms, and to handle excess visitors, it's making do by striking deals with four hotels near the casino: Comfort Suites, Hampton Inn, Holiday Inn Express and Fairfield Inn. That includes paying for gamblers' lodging at these off-site hotels.

Long-term, the Seminoles plan to build a 22-story hotel tower on the tribe's Orient Road property, which could result in another 1,000 rooms. Bitner, the tribe's spokesman, couldn't give a timetable for when construction might start. It expects to finish its 32,000-square-foot casino expansion early next year.

In the meantime, local landowners and developers have been courting the Seminoles for several years, but with nothing to show for it so far.

A Virginia group, Republic Land Development, wants to build a massive hotel, shopping and sports complex across from the casino at the Florida State Fairgrounds. It has talked with the Seminoles about using some of the hotels it would build at the fairgrounds.

Bitner said those talks occurred at least a year ago and the tribe hasn't heard from the would-be fairground developer in months.

A Tampa retail developer, Dunphy Properties, tried to interest the Seminoles in a 36-acre project it's planning near Interstate 4 and U.S. 301. It hasn't heard back from the tribe, owner Jim Dunphy said. And hotel developer Menna Development and Management several years ago considered building a hotel across from the casino on Hillsborough Avenue, hoping to draw spillover business.

The idea was yanked off the table, company executive Anthony Menna said, because money for new hotels is tight and a hotel developer might struggle to compete against the Seminoles for overnight visitors.

"I would hate to compete with a hotel that has its own demand generator inside," Menna said.

Hillsborough County can only hope the casino's growth will mean more gamblers will tear themselves away from the black-jack tables to visit off-site restaurants and shops. That may be at odds with the casino's strategy of keeping people on-site, though.

The county likely will lose more bed taxes if the casino goes ahead with its plan to build a 22-story hotel.

Eight years ago, county tourism officials investigated whether they could require the tribe to collect bed taxes, which is a tax on hotel stays. They contacted tax officials in Connecticut, who already had researched whether they could demand sales and bed taxes from the tribal owners of the huge Mohegan Sun and Foxwoods casinos.

Connecticut found that it couldn't because of the tribes' status as separate nations, and Hillsborough followed suit.

The Seminoles don't collect a bed tax at their Tampa hotel, said Bitner, the tribe's spokesman. But they do levy a tribal government fee on hotel stays that equals the bed tax that other area hotels charge so the Seminoles don't have an unfair advantage. Other hotels charge a bed tax of five cents on each dollar charged customers.

The tribe contributes to Hillsborough County's tourism bureau, Tampa Bay & Company, to support local tourism, Bitner said. A spokesman for Tampa Bay & Company did not know the level of the Seminoles' contributions.

Even if the county misses out on taxes from the tribe, local tourism benefits from the extra draw that a casino provides for convention business, said Bob Morrison, executive director of the Hillsborough County Hotel & Motel Association.

Morrison is expecting the Seminoles to expand their hotel.

"The only question is when it will happen."


(c)2011 the Tampa Tribune (Tampa, Fla.)

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