Gun Lake Casino has foes at bay

September 5, 2009
| By Pete Daly |
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(Editor's note: This is the first installment in a series of stories examining the plans for the Gun Lake Casino.)

WAYLAND TOWNSHIP — After nearly a decade of legal battles, the victorious Gun Lake Tribe of Pottawatomi Indians will begin construction Sept. 17 of its long-delayed casino near U.S. 131 in Wayland Township, about 25 miles south of downtown Grand Rapids, but it won't soon forget the forces that opposed the project virtually from its infancy.

The tribe has an acute interest in the companies that will be involved in the construction of the casino and its vendors and service suppliers, once it is in operation. That's because early public opposition to the Gun Lake Casino included the Grand Rapids Area Chamber of Commerce and the Holland Area Chamber of Commerce. The tribe later adopted a policy to exclude members of those chambers from consideration as vendors/suppliers.

"They did not want to see this happen. Why should they be part of it?" said John L. Shagonaby, CEO of MBPI Inc., the tribe's economic development corporation. Shagonaby told the Business Journal the Gun Lake Tribe is "helping" Portage-based Skanska USA, the general contractor for the project, "identify subcontractors."

Richard J. St. Jean of Las Vegas-based Station Casinos, with which the tribe has contracted to operate the Gun Lake Casino, tempered that stance somewhat by explaining that "obviously, we're going to do what's best for our business." He added that if the tribe decides there are opportunities in working with a given vendor or supplier, "then we certainly won't shut those doors."

St. Jean said the tribe is well aware that "everyone's going to be banging down the door now." In previous cases where Indian casinos were opposed, "as soon as the doors open, then everyone will want to be their best friend."

However, James Nye, spokesman for the tribe, said that any decisions the tribe makes in regard to vendor selections will "first and foremost be for the benefit of the tribe and our local community."

Also widely reported during the process were the exploits of a former bankroller of Michigan anti-gaming efforts that financially supported efforts to thwart Gun Lake and other Michigan casino projects. Las Vegas gambling interest Boyd Gaming opened the Blue Chip Casino property on the Michigan-Indiana border, and then backed lobbying efforts against all three casinos parallel to opposition from religious groups and Grand Rapids economic interests.

The new Gun Lake structure will be about half the size of the casino the tribe originally planned, but designed for expansion after the economy and credit rates have improved. Tribal leaders said they will be investing $157 million in an 83,000-square-foot casino with 1,200 slot machines, 36 table games, an entertainment lounge and a restaurant seating 300.

"Given the current economic conditions, it makes sense for us to build this project in phases," said D.K. Sprague, tribal chairman. "This will allow us to bring jobs to our area sooner, and we look forward to planning and developing the next phase as the economy recovers."

Tribal officials said the casino will directly employ 600 people, of which only about 50 or fewer will be members of the Gun Lake tribe. They said the average job will be worth $40,000 in wages and benefits. The tribe expects the casino to generate approximately $9.1 million annually to the state revenue sharing fund and about $2.3 million annually to the local revenue sharing board.

Tribe leaders predict the economic impact of the casino will spark another 1,000 new jobs in the area, with spending on vendor goods and services estimated at about $30 million annually. They do not plan to build a hotel but said the new casino will generate 60,000 room rentals at area hotels annually.

The original casino plan would have created an estimated 1,800 direct jobs.

A series of lawsuits against the tribe blocked plans for about 10 years, with the final suit by Wayland resident David Patchak dismissed by a federal judge in Washington, D.C., in mid-August.

"There are no more challenges whatsoever," said James Nye, spokesman for the tribe.

"Unfortunately, we were delayed out so many years that after we finally got all our approvals and everything settled, we (are dealing) with less than a stellar credit market and economy," said Shagonaby.

He said they expect the new casino to be open in 10 to 12 months. The Portage office of Skanska USA will be the managing general contractor on the project. Skanska USA is part of the Skanska Group, a Swedish firm that is one of the world's largest construction companies.

St. Jean said the first phase of the Gun Lake Casino will be designed for eventual expansion to the size originally planned: a 193,000-square-foot structure.

Shagonaby told the Business Journal the Gun Lake Tribe is "helping" Skanska, the general contractor, "identify subcontractors."

The tribe's casino development near the Bradley exit on U.S. 131 will include installation of its own water supply and sewage treatment facility. The 147-acre site, about three miles from the tribe's original settlement in Bradley, had been an Ampro Industries manufacturing facility when the tribe bought it in 2001. The Gun Lake Tribe, officially known as the Match-e-be-nash-she-wish, won federal recognition in 1999.

"My dream is to have the casino running in one year," said Sprague in 2001, when announcing the tribe's purchase of the Ampro site.

Local groups both for and against the proposed casino were already mobilizing, however. In 2005, the federal government announced it would take the tribe's casino site into trust, and that same year a group calling itself Michigan Gambling Opposition (MichGO) filed suit to block the casino. MichGO received financial support from 23 is Enough, an organization of Grand Rapids opponents to the casino, led by former ambassador Peter Secchia. The group's name was in reference to the 20 casinos already open in Michigan at that time, plus three more that were being planned.

MichGO lost its suit, and last January the U.S. Supreme Court declined to hear it on appeal.

The competition for the Gun Lake Casino has increased significantly in recent years while it waged its legal battles. The Four Winds Casino in New Buffalo in southwest Michigan, one of the largest Indian casinos in the state, opened two years ago. An even closer Indian casino opened this year: FireKeepers Casino southeast of Battle Creek.

Another Indian casino in the proposal stage would be the closest yet to the Gun Lake Casino: The Little River Band of Ottawa Indians, who already have a casino in Manistee, bought the former Great Lakes Downs horse racetrack just east of Muskegon last year and plan to open a casino there. If they are successful, that casino would be about 25 miles west of downtown Grand Rapids — about the same distance away as the Gun Lake Casino.

Shagonaby told the Business Journal the Gun Lake Tribe is "helping" Skanska, the general contractor, "identify subcontractors."

Next week: A detailed look at the Gun Lake Casino project with an eye toward even more possible competition in the market in the future.

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