Churchrock casino may miss deadline
Delay would cause money problems, loan default

By Kathy Helms
Diné Bureau

WINDOW ROCK — The Navajo Gaming Enterprise has less than six months to construct the Nation’s first casino in Churchrock and may not meet its Oct. 15 target opening date, according to NGE General Counsel Ray Etcitty. If that happens, the Gaming Enterprise would be in default on its loan agreement.

In a report last week to the Budget and Finance Committee, Etcitty said, “We would like to hit Oct. 15 but we are looking at November and are trying to speed up to try to get back to October.”

There are two issues that could cause the Enterprise to miss the proposed opening date. “One is the easement. The site is located on a frontage road, however, the frontage road is considered and designated as Route 66,” Etcitty said.

Because Route 66 is historical in nature, it requires special clearances. Etcitty said they have to go to Santa Fe for those clearances.

“The other scenario we’re looking at is drainage.” Etcitty said they have made application to U.S. Environmental Protection Agency Region 9 for a drainage pipe permit.

“We do have an arroyo that goes nearby there and we have water that goes out there, so therefore we have to demonstrate that we are not going to affect any water discharge,” Etcitty said.

The Churchrock project is expected to consist of a casino building of approximately 60,000 square feet, various restaurants, entertainment facilities, paved parking areas, and a structure for about 600 vehicles, according to Navajo Nation Controller Mark Grant.

Grant told the committee that as of May 8, the Gaming Enterprise has not made any draw-down requests on its $35 million loan from the Land Acquisition Trust Fund, however, he said, Robert Winter, chief executive officer of the Gaming Enterprise, is preparing a draw-down request for approximately $2 million.

“This first draw-down will cover operating expenses, equipment costs, legal fees plus other pertinent costs,” Grant said, adding that Winter is expected to send the request in shortly.

B&F Chairman LoRenzo Bates reminded the committee that there is a condition in the loan document regarding finishing the project by Oct. 15. He asked Grant what the penalty would be for not finishing the project by then.

“I guess it would be considered a technical default if they did not make that time line,” Grant said. “I did speak to Mr. Winter and he has assured me that the issues surrounding the right of way off of the freeway are actually going to be resolved quite soon. As far as the time line, I think that it is actually an item that we could adjust if we found it necessary.”

Bates responded, “Mr. Grant, if there is going to be a problem with them not meeting Oct. 15, that needs to be taken care before any disbursements of those monies.”

Bates said Monday that if construction goes into November, it puts the Gaming Enterprise in default. “That’s why the directive was made to Mark and the gaming people to fix it. If they go into default, the deal is off. The Gaming office is well aware of the consequences, so they need to come back to B&F and figure out what to do so they don’t go into default.”

“Just because it’s Navajo Nation money doesn’t mean we’re going to stand idly by and let them go into default and not do anything about it, now that we know. They’d better come up with a plan.

“It’s not a ‘good old boy, trust me’ loan. They’ve got to pay attention to this,” he said.

“They either need to come back to the committee or Mark Grant and amend the date, and then it will have to come back to B&F. Somebody has to say OK.”