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Casinos build for future in the desert

With new compacts in place, casinos consider future growth

11:28 AM PDT on Thursday, May 8, 2008

By CAROL PARK
Special to The Business Press

Rooms at the Agua Caliente Casino Resort Spa in Rancho Mirage are booked up and business is looking good. Rooms were sold out at the new hotel in April and May sales are through the roof, officials say.

"It's been a good couple of weeks," General Manager Scott Cooper said. "It's looking good for May and we're booking into June."

Rooms at the hotel are nearly 90% booked for May, said Nancy Conrad, spokeswoman for the tribe.

"We have good numbers, even with the economic downturn, the price of gas and talk of recession," Conrad said.

The Agua Caliente Band of Cahuilla Indians hired 350 people and opened the $300-million, 340-room Agua Caliente Casino Resort Spa in April.

Set to be part of that new resort is a 2,000-seat, 35,000-square-foot entertainment center scheduled to open in early 2009.

The tribe is also looking to develop land across the way from the hotel on Bob Hope Drive into retail shops.

"The tribe owns the land across the street and it has been proposed to develop that into retail," Cooper said.

"Bob Hope Drive, which is the street in front of the casino, will be extended and connected to the I-10 by 2010 and that whole corridor will be developed; there are all kinds of possibilities."

The new resort features restaurants, a 10,500-square-foot spa, a 50,000-square-foot pool area and a 13,000-square-foot conference center with breakout rooms.

Group bookings have picked up since the opening of the hotel, Cooper said. The hotel cut deals with groups to help get the word out about the new meeting space, he said. Groups that booked rooms and ate at hotel restaurants were offered the use of the conference space for free.

The 423-member Agua Caliente tribe also plans to redevelop its Spa Resort Casino in downtown Palm Springs.

"Before we do anything, we're looking at the underground mineral waters, which are the heart and soul of the tribe and Palm Springs," Conrad said. "We won't move forward unless the aquifers are preserved."

The tribe added 800 machines to the Rancho Mirage casino, increasing the number of slots to 1,800 after voters approved amended compacts in February. Under its new compact, the tribe can operate a total of 5,000 slot machines at both its casinos in Palm Springs and Rancho Mirage. The hotel employs a total of 2,400 people at its two casinos.

Two other tribes in the area also added slots after voters approved the compacts in February.

"Although the compact allows Pechanga to increase gaming machines until it reaches a total of 7,500, the tribe will evaluate consumer demand, the market and economy, the best interests of the tribe and other relevant factors before deciding on whether or when to add further devices," spokesman Jacob Mejia said. "We are continually replacing and updating games. Pechanga currently has no new casino development projects in the works."

The new compacts allow the Pechanga tribe and the Morongo Band of Mission Indians to operate up to 7,500 slot machines each.

Morongo currently operates more than 3,000 slots, up from 2,000 last year. The tribe added nearly 1,000 slots after its compact was approved.

"We are now discussing plans to add more slot machines," said Sean Sullivan, Morongo Casino Resort & Spa general manager. "We believe an opportunity for expansion exists."

Separately the San Manuel Band of Mission Indians added 1,500 slots to its casino in San Bernardino for a total of 3,500 machines.

The tribe also opened a steak house and lounge May 9.

San Manuel's compact did not go up for voter approval in February. The tribe's compact was approved by the federal government in January. San Manuel can operate up to 5,500 slots. The tribe will pay an estimated $7.2 billion of its slot revenue over the life of the agreement if it operates all 5,500 slots. The compact extends through 2030.

The Agua Caliente tribe has upped the ante on attracting visitors to its casino. The tribe launched an advertising campaign May 1. The campaign consists of several television ads with actor John O'Hurley touting the casino's proximity.

"We're a great Vegas alternative for Southern California; we're closer," Cooper said. "We may not have the mass of hotels that they do, but we have reasonable room rates and we're close. You don't have to sit in in traffic for five or six hours to get here."

The Coachella Valley's growing population is also fueling awareness of the casino, hotel and spa.

The valley's population grows by 53 people daily, according to the Coachella Valley Economic Partnership.

By 2020, about 212,000 permanent residents are projected to move to the valley; more than 600,000 people will live there just over a decade from now.

Agua Caliente's new casino, resort and spa "will enhance tourism, which will bring funds to the valley," said John Soulliere, Coachella Valley Economic Partnership president and chief executive officer. "Tourism brings outside dollars into the region. The casino is in alignment with our tourism brand; it's a good thing."