An artist’s rendering shows the Sand Hills Casino, which will be built on Swan Lake First Nation land near Highway 5 south of Carberry and is scheduled to open in the spring of 2014.
A major casino project near Carberry has finally beaten the house odds.
Ground has been broken on the Sand Hills Casino on Swan Lake First Nation land south of Carberry on Monday. (BRUCE BUMSTEAD/BRANDON SUN)
Sand Hills Casino, which will be built on Swan Lake First Nation land near Highway 5 south of Carberry, is scheduled to open its doors in the spring of 2014, according to a press release issued Monday by Hemisphere Gaming, the company building the casino.
"If you went to see the project right now you would see a big hole in the ground, a construction trailer and a few pieces of heavy equipment," Sand Hills Casino spokesman Barbara Czech said, "so work is underway."
When it is completed, the $20 million, 31,000-square-foot casino will house 350 slot machines, gaming tables, a restaurant and a bar.
Czech expects the casino to have a significant economic impact on the entire area.
"There will be 150 full-time jobs and another group of part-time jobs," she said. "Those jobs will range from information technology to human resources, from marketing to dealers on the floor and cashiers to restaurant servers.
"It’s a great opportunity to keep young people working in good positions close to home."
It will also curb some of the flow of Canadian dollars leaving the country bound for casinos in the United States, she said.
The Sand Hills Casino project, formerly known as the Spirit Sands Casino and Resort, will be the third First Nations-owned casino in the province and when it is finished it will be the second casino that has been built by Hemisphere Gaming.
Czech couldn’t speak to the specifics of the contract between the Assembly of Manitoba Chiefs and Hemisphere Gaming, but she did confirm the company will manage the casino for a period of 10 years after construction.
"After that, the board of Sand Hills Casino can choose to extend the agreement or move in another direction."
In November 2012, the Brandon Sun obtained a copy of the agreement between the AMC and the Minnesota-based gaming company.
While Czech maintains the deal is different than the controversial contract the company signed to manage the South Beach Casino, further inspection revealed several similarities — mainly that the casino owner, AMC, pay Hemisphere a hefty annual management fee, in this case 22.5 per cent of EBITDA (the annual net income before management and licencing fees are taken off), an additional 12.5 per cent of the same and two per cent of the total gross revenues for each fiscal month.
The deal also states that if Hemisphere is able to negotiate a better project financing interest rate with a bank than the stated project rate of 13.5 per cent, the casino owner will have to pay the company a financing incentive fee that is equal to the difference between the two rates. That means, for example, if Hemisphere obtained an annual interest rate of nine per cent on a $20-million building loan, the casino owner would have to pay the difference between the nine per cent and 13.5 per cent rate, which works out to $900,000 per year.
"We expect that the initial $20-million investment is phase one of what will ultimately be a multi-phase project," Hemisphere Gaming president Ali Alizadeh said.
"At Sand Hills, we’ll create well-paying jobs and intend to source goods and services from the region whenever possible."
Profits from Sand Hills will be shared by all Manitoba First Nations.
However, Hemisphere’s deal is expected to take a big bite out of revenues that would have flowed to First Nations.
In a press release issued earlier this year, the AMC stated that the casino "near Brandon is anticipated to return $1.9 million," meaning each First Nation would receive approximately $30,000.
Swan Lake First Nation Chief Francine Meeches is eager to get the much maligned project up and running.
Meeches was at the official sod turning for the casino back in November 2010. At that time the plan was to build a $41-million facility that included a hotel. While the casino has been scaled back and undergone a management change, she is now looking forward to the potential impact the casino will have for her reserve.
"It’s taken quite a toll on us and it’s taken a lot of time to get the project on the go and that’s what we’re so excited about is that it is finally happening," Meeches said.
Swan Lake is set to capitalize, according to Meeches, using the casino as a tourism anchor for which other projects can link themselves to.
"Whatever we choose to develop and build around the casino will be ours," Meeches said.
The city’s economic development officer Sandy Trudel said Brandon is also poised to benefit from the proximity to the casino.
"A couple of our local companies have already been awarded parts of the construction project and anytime that happens it bodes well for the region," Trudel said.
She said the city will work hard to capture as many of the tourism dollars that will be generated by the project as possible.
Republished from the Brandon Sun print edition June 11, 2013