Stop Graton Casino
Chukchansi Gold Resort & Casino missed half it's payment last month to the bank. Should we expect the same from Graton Casino?
The Biggest Gamble at Graton Casino: Tribe's Debt Obligations
The biggest bet involving Graton Casino won’t be made at a card table or slot machine. It’s with the project itself. At more than $800 million, Graton Casino is the costliest development project in Sonoma County history.
The tribe has borrowed heavily in order to foot the bill. But, what if the tribe misses expectations?
That’s been the case with other tribal casinos, which has quickly become an over-saturated market. If Graton Casino can’t attract enough gamblers from the Bay Area, it means the tribe will be in a debt predicament similar to the Chukchansi Casino.
Last month, the Chukchansi Gold Casino & Resort missed their interest payment by $6.25 million.
Vice-Chairwoman, Nancy Ayala and “her small faction of supporters have been seizing money for themselves,” according to tribal chairman, Reggie Lewis. A court order has been made to see where the money was spent and to ensure the remainder of the debt is paid, so the casino can remain open.
Should we expect a similar scandal if Graton Casino opens? Only time will tell to see who really reaps the benefit of this casino’s profit. .
The article below is from The Fresno Bee giving a brief story on the Chikchansi’s missed payment.
Chukchansi tribe misses half of casino payment
The Picayune Rancheria of the Chukchansi Indians was unable to make a full payment last month to the bank that restructured financing for the tribe’s Madera County casino, according to court documents released Friday.
The tribe’s financial predicament surfaced in a ruling by a New York judge who is requiring the two opposing factions, led by Nancy Ayala and Reggie Lewis, to give all their financial information to the trustee, Wells Fargo. Judge Melvin Schweitzer also wants a professional audit completed.
The Ayala group took control of the Coarsegold tribal business center and Chukchansi Gold Resort & Casino after a February referendum that the Lewis faction — which split from the Ayala group — contends was unconstitutional.
Schweitzer subsequently intervened and ruled that both sides need to sign off on payments.
In a hearing Wednesday, the judge said casino operators were obligated to make an interest payment of $12.49 million to the bondholders on Sept. 30, but paid only $6.25 million.
“We asked why they did not have sufficient money to make the interest payment,” said Richard Verri, lawyer for the Lewis group. “The Ayala group has been in control of the till; we want to know why the casino doesn’t have a plan for operating the business so it can pay its debts.”
The casino and Chukchansi Economic Development Authority, the agency in charge of the casino, “state that they have no existing plan for payment of the remaining interest,” court documents said.
But a spokesman for the Ayala group said it pledged to have the payment made by the end of the year.
“We continue to work with the bondholders in an effort to become current on bond payments across the fourth quarter of this year,” said spokesman David Leibowitz.
He said the bank was receptive to the Ayala group’s plan.
“They have been very receptive to this and we have every intention of paying our debts and making sure that the Chukchansi Gold Resort & Casino stays open,” he said.
Wells Fargo holds the $250.4 million note for casino investors. The bank sued because the Lewis group controlled a Rabobank account used to pay off the casino bonds, but the Ayala group refused to put money in that account and instead opened other accounts.
Schweitzer intervened and ruled that both sides need to sign off on payments that would go through Rabobank.
The tribe restructured $310 million in loans last year when it couldn’t make its payments. Under a new plan, the tribe agreed to extend its loan to 2020, allowing a longer-term payback for much of the remaining loan, but to pay a 9.75% interest rate. The previous interest rate was 8%.
The tribe has borrowed heavily in order to foot the bill. But, what if the tribe misses expectations?
That’s been the case with other tribal casinos, which has quickly become an over-saturated market. If Graton Casino can’t attract enough gamblers from the Bay Area, it means the tribe will be in a debt predicament similar to the Chukchansi Casino.
Last month, the Chukchansi Gold Casino & Resort missed their interest payment by $6.25 million.
Vice-Chairwoman, Nancy Ayala and “her small faction of supporters have been seizing money for themselves,” according to tribal chairman, Reggie Lewis. A court order has been made to see where the money was spent and to ensure the remainder of the debt is paid, so the casino can remain open.
Should we expect a similar scandal if Graton Casino opens? Only time will tell to see who really reaps the benefit of this casino’s profit. .
The article below is from The Fresno Bee giving a brief story on the Chikchansi’s missed payment.
Chukchansi tribe misses half of casino payment
The Picayune Rancheria of the Chukchansi Indians was unable to make a full payment last month to the bank that restructured financing for the tribe’s Madera County casino, according to court documents released Friday.
The tribe’s financial predicament surfaced in a ruling by a New York judge who is requiring the two opposing factions, led by Nancy Ayala and Reggie Lewis, to give all their financial information to the trustee, Wells Fargo. Judge Melvin Schweitzer also wants a professional audit completed.
The Ayala group took control of the Coarsegold tribal business center and Chukchansi Gold Resort & Casino after a February referendum that the Lewis faction — which split from the Ayala group — contends was unconstitutional.
Schweitzer subsequently intervened and ruled that both sides need to sign off on payments.
In a hearing Wednesday, the judge said casino operators were obligated to make an interest payment of $12.49 million to the bondholders on Sept. 30, but paid only $6.25 million.
“We asked why they did not have sufficient money to make the interest payment,” said Richard Verri, lawyer for the Lewis group. “The Ayala group has been in control of the till; we want to know why the casino doesn’t have a plan for operating the business so it can pay its debts.”
The casino and Chukchansi Economic Development Authority, the agency in charge of the casino, “state that they have no existing plan for payment of the remaining interest,” court documents said.
But a spokesman for the Ayala group said it pledged to have the payment made by the end of the year.
“We continue to work with the bondholders in an effort to become current on bond payments across the fourth quarter of this year,” said spokesman David Leibowitz.
He said the bank was receptive to the Ayala group’s plan.
“They have been very receptive to this and we have every intention of paying our debts and making sure that the Chukchansi Gold Resort & Casino stays open,” he said.
Wells Fargo holds the $250.4 million note for casino investors. The bank sued because the Lewis group controlled a Rabobank account used to pay off the casino bonds, but the Ayala group refused to put money in that account and instead opened other accounts.
Schweitzer intervened and ruled that both sides need to sign off on payments that would go through Rabobank.
The tribe restructured $310 million in loans last year when it couldn’t make its payments. Under a new plan, the tribe agreed to extend its loan to 2020, allowing a longer-term payback for much of the remaining loan, but to pay a 9.75% interest rate. The previous interest rate was 8%.
Click here to read the full article.
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