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Potawatomi Casino in Milwaukee, Wisconsin
Plans 382-room $97.5 Million Hotel

By Tom Daykin, Milwaukee Journal SentinelMcClatchy-Tribune Regional News

Jan. 18, 2012--Potawatomi Bingo Casino, which has grown to 2,500 employees from its modest launch as a bingo hall in 1991, would add another 230 jobs at a proposed 20-story hotel, while helping Milwaukee draw more overnight tourists, casino officials said Tuesday in announcing their plans.

In addition to generating about 1,000 construction jobs, its estimated $97.5 million cost would make the 382-room hotel Milwaukee's largest current development project.

The hotel, its employees and guests would generate $9.7 million in annual state and local government revenue, including sales, property, income and hotel room taxes, according to a study commissioned by the Forest County Potawatomi Community, which owns the casino, 1721 W. Canal St.

The hotel also would expand the casino's customer draw from what's now a 25-mile radius to a roughly 100-mile radius, said Mike Goodrich, casino general manager.

Potawatomi Bingo Casino, which draws 6 million annual visits, is the largest tribal casino nationwide that lacks a hotel, Goodrich said.

"The most commonly asked question we get from our guests is, 'When are you going to get a hotel?' " he said.

If it secures financing and zoning approval, the Potawatomi community plans to begin construction in late spring on the hotel, which would be near the casino's main entrance. It would open in spring 2014 and include a casual dining restaurant, spa and 500 to 600 additional parking spaces.

About 90% of the hotel's guests would be visitors who aren't now staying overnight in Milwaukee, according to a report by consulting firm Pinkowski & Co., based in Memphis, Tenn.

The expected rate of new visitors is high, Goodrich said, because the casino hotel would not target business and convention travelers, which are the main source of revenue for most downtown hotels.

He added that the new hotel would not hurt downtown hotels.

"It's not going to affect us," said Tim Dixon, who operates the Iron Horse Hotel at 500 W. Florida St.

Dixon's high-end boutique hotel is about a mile from the casino.

A lot of casino customers appear to be Milwaukee-area residents, or people who arrive in the morning by charter bus, gamble throughout the day, and then return home by bus in the evening. None of those people spend money outside the casino, Dixon said.

With a hotel, the casino would attract gamblers who stay overnight and are likely to find something else to do outside the casino, Dixon said. That could mean more customers for businesses like Smyth, the Iron Horse Hotel's restaurant, and The Yard, its outdoor lounge.

Gaming revenue rose

The casino hotel would be the third-largest in the downtown area, after the 729-room Hilton and the 481-room Hyatt Regency.

The Forest County Potawatomi Community still must secure financing for the project, said James Crawford, tribal vice president. He's confident a loan will be approved in time for a spring construction start.

The casino has continued to draw gamblers, despite the slow economy.

In August, the Potawatomi tribe paid the city and county of Milwaukee a reported $5.47 million each from its most recent fiscal year.

The two annual fees total 3% of the tribe's net gaming revenue at the casino, which means gamblers lost nearly $365 million in the year that ended June 30. That was an increase of about 4% over the $350 million in gaming revenue from the previous fiscal year.

Also, lenders have been showing more willingness to finance tribal projects over the past year, said Jeff Heimann, managing director at Tribal Financial Advisors Inc., based in El Segundo, Calif. He cited successful debt refinancings by three California tribes, with each transaction valued at over $200 million.

Approvals needed

The hotel also needs city zoning approval. That process is expected to begin in February with a Plan Commission hearing.

Mayor Tom Barrett said he expects the Common Council to approve rezoning the site. Barrett and three aldermen, including Common Council President Willie Hines, were among local officials attending the news conference where tribal officials announced the hotel proposal.

Barrett, Hines and other officials praised the jobs that would be created.

The hotel's estimated annual payroll would be $6.5 million, according to the Pinkowski study, an average of $28,261 for each new employee. The construction payroll would be $47.1 million. That figure includes indirect jobs, such as those created at firms that supply construction materials.

The casino hotel would be the latest in a series of new hotel projects under development in or near downtown Milwaukee.

Downtown area hotels have seen a big increase in revenue over the past two years, much of that driven by more business travelers. New hotel projects are expected to add more than 500 rooms to downtown over the next two years.

Casino officials have long studied the possibility of adding a hotel, Crawford and Goodrich said.

After opening in 1991 as a bingo hall with 100 employees, the Canal St. facility expanded in 2000 with more gambling devices, restaurants and a 500-seat theater. Another expansion in 2008 tripled the casino's size.

The proposed hotel is a natural progression, Goodrich and Crawford said.

"If you're a gamer, you want to be able to stay at a hotel next to the casino," Crawford said.

Cary Spivak of the Journal Sentinel staff contributed to this report.


(c)2012 the Milwaukee Journal Sentinel

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