On October 29, in an 11-1 vote, the Eastern Band of Cherokee Indians tribal council approved the Tribal Casino Gaming Enterprise’s controversial request to borrow up to $80 million more than the budgeted amount of $250 million to complete an expansion at Harrah’s Cherokee Casino Resort in Cherokee, North Carolina. The council had voted to table the request four days earlier as members complained the resolution was submitted with no backup documents to justify the increased expense. Council members also said the TCGE should have paused the project once it realized that the true cost would be well over $250 million. “Once you knew it was going to be over $250 million, the work should have stopped. That’s when it should have come back to council,” said Wolfetown Representative Bo Crowe.
But at the October 29 session, Birdtown Representative Albert Rose said, “I just want to explain that the reason I voted to do this is because the project has to be finished. It has to be completed. We’ve got down to why it’s running over, and they answered my questions, so that’s all I got right now.”
Despite approving the project, Rose and other council members expressed displeasure with the way it had been handled. Wolfetown Representative Chelsea Saunooke said, “I understand that this has to happen in order for the project to be completed. It’s not the way I want business to be done in the future.” Saunooke said she plans to introduce legislation to address capital contract guidelines and provide for a project manager.
Casino spokesperson Brian Saunooke said the completed expansion will feature a fourth, 725-room hotel tower including 70 suites, a 2,000-space parking deck and a 140,000-square-foot convention center.
The project was approved in January 2017 to include an 800-room hotel tower, a parking deck and a 100,000-square-foot convention center, costing $150 million to $200 million. However, on October 26 TCGE Board Member John Houser told the council no actual plans existed to back up the $250 million figure, and that an independent auditor’s review indicated the project was seriously underfunded. “The schematic for the plans for this project were pretty much done on the back of a napkin. It was a concept,” Houser said.
He noted costs have escalated since 2017 due to a booming economy and rose even more when the casino gave its input about the specific features it required at the new facility. The TCGE sent out the bid package to more than 20 contractors but only received three bids back. “Then retail was assigned to us, and boom, we had to redesign the whole place. Totally. That cost a lot of money. It was the right thing to do, but that’s how we ended up so much over,” Houser said.
He stated the TCGE was “extremely disappointed” to be over budget. He said TCGE spent six months on value engineering efforts that eliminated $12 million but failed to cut costs sufficiently to stay within the budget.
Ground broke on the expansion in June 2018, and it’s expected to be completed in fall 2021. Tribal council was told the project will bring in $17 million per year plus profits from conventions. Houser said the unfinished facility already has $15 million to $20 million in pre-bookings.
Principal Chief Richard Sneed told council members the loan would be serviced through gaming revenues. He said the tribe can afford the expense, as its debt to income ratio of 1.4 is far lower than that of most casino operations. “Hopefully there will be an investigation on the TCGE that will bring up why this is going on,” Rose said.
