By Steve Wiegand
Published 2:15 am PDT
Station Casinos officials were taking a gamble when they decided to
invest in Thunder Valley, but then that's the business they're in. The
Las Vegas-based company fronted the United Auburn Indian Community
nearly $47 million when the company signed a seven-year deal to manage
the casino, as well as guaranteeing a $215 million construction loan -
and all of that before the casino had cleared its final legal
hurdles.
The calculated risk has paid off handsomely. Not only is Station
receiving 24 percent of the casino's net revenues, which should amount
to at least $70 million in the first year, but the success of Thunder
Valley has piqued interest among other tribes looking for help in
opening a casino.
"I'm not sure they saw this coming," said John Mulkey, a gaming and
lodging research analyst for Bear, Stearns & Co., "but the very
nice product that they built, and the speed at which it was constructed
once they broke ground, has become a real model for tribes across the
country that are looking to get into gaming.
"They see the speed at which it was built as well as the strength of
Station's management team and balance sheet, and they say, 'That's what
we want,' and the first call goes to Station."
Even before Thunder Valley opened, Station had signed a similar
agreement with the Federated Indians of the Graton Rancheria for a
proposed casino in Sonoma County.
Since then, the company, which owns all or part of 11 casinos in the
Las Vegas area, has reached operating agreements with two other tribes
in Northern California and one in Michigan.
"This was always something Station had an interest in," said Scott
Nielson, Station's general counsel and corporate vice president, "but
obviously the success of Thunder Valley has kept us moving along this
path."
Nielson said the lessons the company has learned at Thunder Valley have
helped it in developing deals with other tribes.
And the company may not be done developing in the Sacramento area.
Station owns 188 acres near Thunder Valley.
"We really haven't formulated any plans for the property across the
street" from the casino, Nielson said. "This first year has gone by so
quickly, we just haven't had the time."
