Hemisphere Gaming Inc. has signed a 10-year agreement with the Assembly of Manitoba Chiefs to develop and manage the Spirit Sands Casino near Carberry. The casino, which is estimated to cost $15 million, will be located 16 kilometres south of the Trans-Canada Highway. Construction is expected to begin in the spring. (GOOGLE MAPS/TYLER STEPHENS/BRANDON SUN)
Though the Assembly of Manitoba Chiefs has decided to continue its support of the Spirit Sands Casino development, a bid to bring a casino to Brandon isn’t dead just yet.
At the same time, Brandon Mayor Shari Decter Hirst says a 2007 gaming market study, which concluded the Brandon and western Manitoba market could only support one small-sized casino facility, is outdated and needs to be conducted anew.
"The province has said that, based on what I believe is an outdated market analysis from 2007 — it’s outdated because of the huge population boom we’d had in western Manitoba — that market analysis says there’s only room for one casino in western Manitoba and that license for that one casino had been awarded to the AMC who gave it to Carberry," Decter Hirst said on Thursday morning.
"I don’t think there’s anyone who doesn’t agree that the Brandon market is a much stronger market for tourism and gaming. We have the capacity with our existing infrastructure to have a more efficient operation of a casino."
The mayor made the comments in the wake of an announcement by the AMC yesterday that Hemisphere Gaming Inc. has signed an agreement to develop and manage the much-delayed Spirit Sands Casino project near Carberry.
In an early morning press release, Grand Chief Derek Nepinak said Hemisphere Gaming had a "solid track record" managing the South Beach Casino, and that it had developed a good relationship with the AMC and Manitoba’s First Nations since 2005.
Under a 10-year deal, Hemisphere Gaming will finance, develop and manage the Spirit Sands project on leased reserve land owned by Swan Lake First Nation. Initial construction will begin in early spring 2013, and consist of a facility with up to 450 slot machines and up to 12 table games.
The original design for the $40-million Spirit Sands Casino, which had been developed by HLT Advisory Group, called for 300 slot machines, five gaming tables, three restaurants and a full-service hotel. Under Hemisphere Gaming, however, the scaled down project cost about $15 million to build and will not include a hotel in the initial phase of construction.
"That’s not part of the current plan, initially at least," Hemisphere spokesperson Barbara Czech told the Sun. "Hemisphere want to build a project that the market can bear. Build to existing demand, and then grow the business, and then expand it as demand increases."
The Spirit Sands Casino project has been in the works for at least two years and was originally supposed to open in 2012 following a ground-breaking ceremony in 2010. But construction never began.
As part of the original agreement with the AMC, Red Lake Gaming Enterprises — a Minnesota-based tribal casino operating company owned and operated by Red Lake Nation — was not only to manage and operate the Spirit Sands Casino, but was also expected to secure financing for the project, something the chair of the AMC Gaming Chiefs Committee, Fisher River Chief David Crate, said the company was unable to do.
"So we basically ended the agreement with Red Lake and we moved on. Then we started discussions with Hemisphere Gaming," Crate said yesterday.
One year ago, Hemisphere Gaming was the subject of a CBC News investigation which found that the company had made more than $43 million — mostly in management fees — on the South Beach Casino, while the casino itself had total net earnings of nearly $39 million.
However, Crate said none of the gaming chiefs were concerned with Hemisphere managing Spirit Sands.
"Basically it’s a new agreement. It’s a different agreement than the South Beach agreement. Management is going to be through the Spirit Sands board, which is comprised of leadership from AMC and we also have the definitive agreements which were signed with Hemisphere which clearly sets out the arrangement and the kind of relationship we’re going to have with them."
An excited Swan Lake First Nation Chief Francine Meeches was relieved that an agreement to build the casino was finally signed.
"Even ourselves at Swan Lake, we’ve been wondering when this is going to come to fruition because we never know when," Meeches said. "Whatever we build around that area is ours. All the projects that we were hoping to put in that area, now we can actually really focus on those projects that we were hoping for and create some jobs for the people."
Last May, the City of Brandon partnered with a First Nations business group to examine the financial case for a casino development inside city limits.
Through what the city called an "unprecedented partnership," the agreement in principle paired the Tribal Councils Investment Group — the business arm of seven Tribal Council groups representing 55 of Manitoba’s 61 First Nations bands — and the municipal government with the intent of building a casino on city-owned land.
Decter Hirst said she and the head of the TCIG were caught flat-footed by the Thursday morning announcement.
"Both of us were quite surprised," Decter Hirst said. "As soon as I saw the info on the (Brandon Sun) website I sent a quick email off to (TCIG CEO Allan McLeod) who is a subscriber to the website — it was ‘holy cow.’"
At an AMC assembly earlier this year, Chief Nepinak had promised to hold another assembly to meet with City officials in September, and then again in October, according to Brandon city manager Scott Hildebrand. But those meetings never took place.
As a result of the announcement, Decter Hirst and Hildebrand said those involved in talks with the AMC feel blindsided.
"We were puzzled in that the Assembly didn’t take place and apparently we were held at arms length while they negotiated the deal with Hemisphere. And that’s not good partnership. That’s not the kind of relationship we want to have," Decter Hirst said.
"The most frustrating part is the business decision," added Hildebrand. "There’s millions and millions of cars that go by (the Trans-Canada Highway and Highway 10). We never decided what location but it makes so much sense to have Brandon as the partner."
When asked whether the city was abandoning its pursuit of a casino in Brandon, Decter Hirst suggested that the province and the AMC have let outdated information guide their decisions.
"The province has said based on the 2007 market analysis there’s only room for one casino. So we need different market analysis if we’re going to have two casinos. AMC today announced they’re putting their casino eggs in the Carberry basket.
She also suggested that the AMC’s announcement was not the end of the road.
"We never want to jeopardize the investment that’s going to be made in Carberry, however, Brandon needs to be at the table of a casino. Whether that’s a provincially run casino based in Brandon or whether that’s a market that’s large enough that supports a casino that has Brandon at the table, it’s a good economic development opportunity."
Her comments were echoed late Thursday by McLeod, who said the TCIG always operated under the assumption that Spirit Sands was going to be built near Carberry by Red Lake Gaming.
While he said a Brandon casino is "stuck politically" at the AMC and with the province, he still believes a gaming development partnership with Brandon is possible, and he has a mandate from his board of directors to pursue it.
"If we thought that the Brandon casino made sense, why not let us continue on and do that one?" McLeod said.
"Everything that we do, we do with the blessing of our board of directors. And our board met on Oct. 24 and suggested, and passed a resolution for us to continue with a Brandon casino.
"Things have happened today pretty fast. We don’t like knee-jerk reactions so we’re going to regroup. We’ve got our business plans and we’ll do the best we can do every day."
Republished from the Brandon Sun print edition November 2, 2012