Debt restructuring sought by River Rock Casino World Casino Directory Almost immediately upon the rival casino's opening, River Rock's revenues were just about cut in half, according to tribal officials who blamed the ...

River Rock Casino seeks to restructure debt

CLARK MASON

THE PRESS DEMOCRAT | August 5, 2016

River Rock Casino, which took a financial blow after the bigger, glitzier Graton Resort and Casino opened nearly three years ago, is offering to restructure its overdue debt, but in a deal that would pay bondholders a fraction of what they are owed.

The offer comes more than two years after the Geyserville-area casino operated by the Dry Creek Rancheria Band of Pomo Indians defaulted on interest payments on $165 million owed to bond holders.

In a proposal announced Thursday, River Rock Entertainment Authority, the operator of Sonoma County’s oldest tribal casino, said it would offer cash payments amounting to 30 percent of the principal amount of outstanding senior notes that are due in 2018.

River Rock intends to borrow up to $50 million from Benefit Street Partners, a New York City-based investment firm, to finance the restructuring and settlement deal.

A gaming analyst on Friday indicated bondholders may have few options other than to accept the offer.

“There’s only so much creditors can extract from a casino under stress,” said Alex Bumazhny, a Fitch Ratings senior director. “Thirty cents on the dollar is still quite a bit of debt.”

He said tribes are quasi-sovereign entities that can’t be put through bankruptcy, and courts are also a risky arena for creditors of tribal casinos.

River Rock was the first tribal casino in Sonoma County when it opened in 2002. It enjoyed a monopoly until Graton became the second in the county with the opening of its large gambling hall next to Rohnert Park in late 2013. Revenues plummeted almost immediately at River Rock by about 50 percent, according to tribal officials, who blamed it on the new competition from Graton.

A year ago, David Fendrick, River Rock Casino’s general manager, said that drop stayed pretty consistent and revenues were still down in the mid 40 percent range, compared to before Graton opened.

On Friday, Fendrick said business at River Rock has leveled off. “We’ve experienced no further erosion of business since the initial drop from Graton. Business is holding steady,” he said in an email.

River Rock reported $124 million in revenues in 2010, the last full year it publicly disclosed such financial information.

Last year, the Dry Creek Pomos also renegotiated the amount they had agreed to pay Sonoma County for off-reservation impacts from the casino for things like sheriff’s coverage and road maintenance.

The tribe reduced by $33 million the amount it was obliged to pay the county under a new payment schedule that was extended from 2020 to 2030. In return, the tribe is precluded until early 2025 from trying to build a casino on land it owns south of Petaluma.

River Rock has been forced to make a series of cost cutbacks as a result of its precipitous drop in revenues. Last year it employed 388 people, down from a high of 600.

The number of slot machines and table games were also reduced from a previous high of 1,300 slots and 22 table games. Last year, it had 1,150 slots and 18 table games.

Fendrick declined comment on the planned restructuring and resettlement proposal, which was described in a news release.

Dry Creek Tribal Chairman Chris Wright, who typically does not speak to the media, did not respond to a request for comment.

In addition to the 30 cents on the dollar that River Rock intends to pay bondholders, the press release also mentioned cash held in a “Parity Lien Debt Account” that will be paid to bondholders. It did not state the amount.

Institutional holders of River Rock’s senior notes are represented by an “Ad Hoc Holder Group,” which must approve the restructuring of the debt.

River Rock intends to hold a conference call with the group to discuss the offer. Also participating will be Stuyvesant Square Advisors, acting as financial advisor to River Rock, the Senior Notes trustee, and attorneys for all the parties.

To obtain financing for the settlement, River Rock will need to show it’s supported by majority of the holders of the principal amount of the senior notes.

Most of the half-dozen or so other tribal casinos across the country that defaulted on their obligations convinced creditors to accept new bonds with a lower face value, or other modifications, Fitch Ratings analyst Bumazhny said Friday.

“Usually it’s new debt to an existing creditor rather than cash,” he said of the typical restructuring, adding that River Rock’s cash offer could be attractive.

“Usually it’s safer to take cash than a new piece of debt,” he said.

http://www.pressdemocrat.com/news/5934053-181/river-rock-casino-seeks-to

Labor Rights And Tribal Sovereignty Collide At Indian Casinos

Posted: 06/15/2015 12:24 pm EDT Updated: 06/15/2015 1:59 pm EDT

In 2013, Gary Navarro took a job working the slots at the Graton Resort and Casino, an Indian-owned casino in Rohnert Park, California. He was just 45 days into the job when he learned that an effort to unionize the workforce was underway.

“I wasn’t too keen on the union at first,” explained Navarro, a registered Republican. “Because I didn’t know what a union was, I didn’t understand what the union stood for.”

Navarro hit it off with a union representative and had a change of heart. He took a lead role in the union effort, and now he and his fellow slot workers are members of Unite Here, a union representing service workers.

But Navarro now finds himself at the center of a clash between labor rights and tribal sovereignty. He is a Pomo Indian from the Round Valley Tribe. His casino is owned by Pomo Indians from a different tribe, the Federated Indians of Graton Rancheria. Many tribal casinos are now asserting that a U.S. labor law protecting workers like Navarro does not apply to tribal businesses on tribal lands. Members of Congress from both sides of the aisle seem to agree.

On Wednesday, Navarro was among 60 workers from Unite Here, including 16 employees of tribal casinos in California, who donned red shirts emblazoned with the slogan “All-American rights for all Americans," and packed the Senate Committee on Indian Affairs hearing for a bill that would exempt tribes from the National Labor Relations Act, or NLRA, the Great Depression-era law that covers collective bargaining in the private sector.

The bill reveals ongoing tensions between labor and native rights about whether the National Labor Relations Board, or NLRB, the agency that enforces the law, can adjudicate disputes between tribal businesses and their workers. The jurisdiction of the NLRB in Indian Country has been a contentious issue between unions and Indian Nations that extends back to the Indian Gaming Regulatory ACT of 1988.

Indian casinos are at the heart of the issue. In 2012, Indian casinos brought in $28.13 billion, representing 43 percent of all U.S. casino gaming revenue for that year. The largest market for Indian gaming is California, where the Graton Rancheria brought in $190 million during the first six months of 2014 before their partner, Station Casinos of Las Vegas, stopped publicly reporting its income.

To unions, Indians Casinos are big business. “The issue of tribal sovereignty is being used as a phony way to say, ‘We’re for sovereignty,’ when in fact, [they're] really just for the money behind this,” said Maria Elena Durazo, vice president of civil rights and immigration for Unite Here. Unite Here, which represents 270,000 hospitality workers in North America, including 6,000 workers from Indian casinos, insists that the NLRA’s jurisdiction extends to tribal businesses on Indian reservations.

Although Indian casinos may be operated by major players in gaming -- in Graton's case, the Las Vegas-based Station Casinos -- they are owned by tribal members, rather than the Donald Trumps or Sheldon Adelsons of the world. Many casinos are relatively small operations that use their revenues to fund vital services such as education, law enforcement and healthcare that would otherwise be severely underfunded by the Bureau of Indian Affairs.

Tribes argue that the NLRA regulates relations between workers and private employers. As sovereign governments, tribes insist, the NLRA does not apply to them.

An exemption from the NLRA would prevent tribal casino workers from unionizing through the same legal framework that protects most U.S. workers. So far, the NLRB appears to be leaning toward the unions.

In a 2004 decision, the board dismissed the San Manuel Tribe’s petition for exemption from the NLRA. In its ruling, however, the board stated that exemptions might apply under specific treaties and also in disputes entirely internal to tribes.

Last week, the NLRB declined to assert jurisdiction over the Chickasaw Nation’s WinStar World Casino in Oklahoma. In its decision, the board cited sovereign rights specific to the Chickasaw in the 1830 Treaty of Dancing Rabbit Creek.

Other tribes, such as the Saginaw Chippewa and Little River Band of Ottawa, both in Michigan, have also challenged NLRB jurisdiction. On Tuesday, an appeals court ruled that the Little River Band of Ottawa must stop enforcing provisions of tribal labor laws that conflict with the NLRA.

Meanwhile, the Saginaw Chippewa case against the NLRB is still being adjudicated. Like the Chickasaw, the Saginaw Chippewa have built their case on treaty rights, which they argue reserve “broad, general rights” of self-government to tribes on the reservation. But California tribes such as the San Manuel -- and Navarro’s employer, the Graton Rancheria -- do not have treaties that were ratified by the United States. Under the precedent set by the San Manuel ruling in 2004, the NLRA still presumably applies to Indian casinos in the state.

However, that could all change with the Tribal Labor Sovereignty Act, versions of which have been introduced in both chambers of Congress. The Senate bill passed a voice vote in the Committee on Indian Affairs on Wednesday. The legislation, which was introduced by Sen. Jerry Moran (R-Kan.) and sponsored exclusively by the eight Republicans on the committee, would amend the NLRA to exempt tribes as employers under the act.

Critics like Unite Here say the bill “will strip thousands of American workers from rights and protections.” Proponents, like Sen. John Barrasso (R-Wyo.), the committee chairman, say the bill “will empower tribes and respect them as sovereign governments.” These two opposing positions suggest a tradeoff: You can have labor rights, or you can have native rights -- but you can’t have both.

The conflict has made Democrats uneasy, with many members of the Committee on Indian Affairs reluctant to comment on the issue. Democratic Sens. John Tester (Mont.) and Heidi Heitkamp (N.D.) are expected to cross the aisle and vote in favor of the bill. Both Senators hail from western states with strong tribes.

In a statement through his spokesperson, Tester explained, “I support the critical role the NLRB plays in protecting workers, but my vote on this issue is a vote in support of tribal sovereignty.” Despite having reservations about the bill, Tester consulted with tribal leaders in the state, who were unanimously in favor.

Navarro will testify at the hearing for the House version of the bill on Tuesday. The legislation has a strong chance of passing both GOP-controlled chambers, as Republicans in general have been hostile toward the NLRB, threatening its funding and powers. 

If the legislation makes it all the way to President Barack Obama’s desk, he will face the same political tradeoff as his fellow Democrats in Congress. Since his visit to the Standing Rock Indian Reservation last June, Obama has emerged as a strong advocate for Indian Country, particularly on issues facing youth. But despite his current battle with organized labor over his massive trade deal, the president has also been closely aligned with labor unions.

These divisions extend down to Navarro, whose background as a Pomo working the wildly successful casino of his kin is unique. (The vast majority of workers at tribal casinos are not Native American.) Navarro’s experience and family history reveal just how deeply this bill cuts into the fraught relationship between the first peoples of this land and workers over scarce resources and opportunities.

In the early days of the United States’ control over California, Navarro’s Pomo ancestors faced enslavement and massacre at the hands of settlers, and were eventually forced onto the impoverished Round Valley Reservation. Had Navarro’s ancestors fled south to live with their Southern Pomo kin, Navarro might have been an owner rather than a worker at the Graton Resort and Casino.

Instead, his great-grandmother grew up in a trailer with 14 siblings on the Round Valley Reservation before running away and marrying a migrant worker. Navarro, their great-grandson, has maintained that tradition of work. He believes union rights are important to preserving good work.

“I’m not super rich, I’m nowhere near it,” he said, “but I’ve worked my ass off for everything that I get, and I’m not going to stop!”



http://www.huffingtonpost.com/2015/06/15/native-americans-labor-unions_n_7573322.html?utm_hp_ref=politics