New Catawba chief rejects money deal to break up with Two Kings Casino developer
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Casino Chaos
After winning a long-shot quest to build a North Carolina casino, Catawba Nation tribe members are frustrated with fumbles delaying its completion.
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The Catawba Nation’s new chief rejects the cost of a financial deal that would break most ties with a company that’s been instrumental in launching its Two Kings Casino outside Charlotte.
The deal, approved by the tribe’s previous administration, would require the Catawba to pay SkyBoat, LLC a $125 million payout, Chief Brian Harris said.
The agreement would allow the Catawba to resolve the National Indian Gaming Commission’s opposition to SkyBoat’s agreements with the tribe and the company’s planned profits from the casino project when it’s finally built.
But it’s too much money, said Harris, who was elected chief this summer and must sign the agreement for it to be finalized.
“Our ability to expand for the future growth of our people and our property is very limited under this settlement,” Harris told the Observer. “That’s very detrimental to us conducting business and generating welfare to our tribal people.
The agreement was “certified” by the gaming commission last month, Harris said.
In a statement to the Observer, a SkyBoat attorney said the settlement amount was based on “reports, data and arguments of the Tribe as to why it is a profoundly reasonable resolution. SkyBoat waited patiently for 10 months while NIGC picked apart the deal but ultimately came to the conclusion that it is fair and a commercially reasonable use of gaming revenue that does not violate any of its metrics and guidelines that are in place strictly to protect the Tribe.”
A $800 million casino on hold
The settlement agreement calls for the tribe to pay SkyBoat, which is led by politically connected Wallace Cheves, $125 million for the company’s work helping the Catawba Nation acquire 17 acres and have it put into a land trust for the casino project.
Harris, speaking to The Charlotte Observer from Las Vegas on Tuesday, declined to say how much money he thinks SkyBoat deserves.
“The $125 million is based on air, so to speak,” Harris said. “They (SkyBoat officials) have not turned in any type of receipt, any type of documentation… There is no proof as to where the $125 million comes from.”
A year ago, the National Indian Gaming Commission concluded that the development contract between the tribe and SkyBoat violated federal law. SkyBoat, the gaming commission ruled, had too much ownership and authority over the project, which is supposed to benefit the roughly 3,000 Catawba members.
The agreement gave SkyBoat “management authority” over the casino operation, a violation of the Indian Gaming Regulatory Act, the commission said. The gaming commission also ruled that the Catawba Nation and SkyBoat failed to submit a management contract within 60 days of its execution, as required by law.
The Catawba, a South Carolina-based American Indian tribe, won federal approval to build a casino on its historic North Carolina lands in 2020. Then Secretary of the Interior David Bernhardt placed about the 17 acres in Kings Mountain in Cleveland County into trust for the benefit of the Catawba Indian Nation.
The nation opened a temporary casino, which runs 1,000 gaming machines and a sports book, off I-85 in the summer of 2021. Construction on the permanent $800 million Two Kings Casino has been on hold ever since the gaming commission’s listing of violations with its contracts in December 2022 ruling.
Once built, the permanent casino, located about 35 miles west of Charlotte, will house more 3,000 slot machines, 120 table games and include 400 hotel rooms in its initial tower. It will also include several restaurants and help employ some 2,600 people, Harris said.
The potential profitability of the Catawba casino got a boost this fall when state Senate leader Phil Berger failed to get legislative approval for casinos to be built off Native-American controlled land in North Carolina, including Rockingham County, where Berger is from. House Speaker Tim Moore, who is from Cleveland County, where Two Kings is located, said he could not find enough votes among Republicans in his chamber to secure what Berger wanted.
Parking wars
Just as contentious as who has authority over the 17-acre casino site is who will own the neighboring nine-acre parking lot, Harris said.
Kings Mountain Land Development Partners, LLC, which Cheves has a stake in, owns the parking lot and subleases it to SkyBoat. King Mountain has offered to lease it to the tribe for $6 million a year, Harris said.
That’s not acceptable, said Harris, adding that the tribe offered to buy the parking lot but was turned down. He declined to say the offer price.
Harris said the tribe has invested some $5.5 million into developing the parking lot and wants the change of ownership either worked into the settlement agreement or in a separate agreement with the tribe.
“We want the parking lot,” Harris said. “We want it outright. We cleared it. We graded it. We paved it, put all the parking stripes there, all the security lights.”
In a statement from attorney James “Wally” Fayssoux, Jr., SkyBoat said the gaming commission has not allowed the tribe to purchase the parking lot. SkyBoat said more than 1.5 million cars have used the lot in the past few years and neither Kings Mountain Development Partners nor SkyBoat have been paid.
Back at the negotiating table
Harris said the tribe and SkyBoat began negotiations last week to finalize the terms of the settlement agreement. No resolution has been reached.
In its statement, SkyBoat said negotiators have been trying to secure additional benefits for the tribe outside of the $125 million agreement.
“The Developer has offered additional concessions in terms of rights of first refusal, construction access, lay down yards, construction parking and utility access to facilitate immediate growth at no charge,” the statement read.
Either way, construction on the casino will start in early- to mid-2024, Harris asserted. The casino will open fully in two or three years later, he predicted.
Exactly how the tribe would do that without a finalized settlement agreement with SkyBoat is unclear. But Harris said he is confident.
“I can’t explain that because that would be giving up my strategy,” Harris said. “We have three different options that we’re pursuing.”
This story was originally published October 11, 2023 at 2:47 PM.