Indian casino in San Diego bankrupt

An Indian casino in the San Diego area, about which there has always been rumors circulating of poor management, has filed for bankruptcy protection.

See: Wall Street Journal article by Katy Stech

Southern California's Santa Ysabel Resort and Casino filed for bankruptcy protection as it faces threats of foreclosure from the Yavapai Apache Nation, which had lent the casino's owners more than $9 million.

The casino—which is owned by another tribe, the Iipay Nation of Santa Ysabel—will continue operating as it seeks to restructure its debt.

In February, a tribal court that governs federally recognized tribes granted the Yavapai Apache Nation a judgment for more than $9 million.

The casino was initially designed to have a resort and hotel, but its owners had to forgo construction of the hotel when money became tight. More bad news arrived when wildfires shut down the casino for a week, and the owners didn't provide enough funding to advertise the operations, according to court papers.

The facility was built with a $26 million loan from J.P. Morgan ChaseJPM -4.18% & Co. and $7 million from Yavapai Apache Nation. The Yavapai Apache Nation later took over J.P. Morgan's debt related to the project, according to court papers.

If I'm not mistaken, that's about the only circumstance in which N.A. casinos could potentially close. If they just owe money to the government or lenders, they are given quite a grace period to get it paid off (see Foxwoods for a case study on that). However, if you owe money to another tribe, they can come after you quickly.

It doesn't sound like the other tribe wants anything to do with the current operations, so they'll abandon ship as soon as they foreclose.

Is the tribe that forclosed the same ones that are operating the glass balcony over the Grand Canyon? Do they have their own casino, or interests in other Southern California competitors? Losing the slot licenses has got to worth a significant amount of money. I wonder if there is more to this story than a down economy.

Quote: Tiltpoul

It doesn't sound like the other tribe wants anything to do with the current operations, so they'll abandon ship as soon as they foreclose.

Whats to foreclose on? IGT has a lien on all the slots, the building ain't worth squat unless its a casino,

Quote: FleaStiff

the building ain't worth squat unless its a casino,

There's no market for a 35,000 sqft warehouse on a mountain top in southern california? shucks!

The Yavapai own & operate Cliff Castle in AZ. I'm not sure if they also have interests in Southern California. Santa Ysabel is laughably in the middle of nowhere. Coming from Rincon, you take a desolate road to a more desolate road, to a laughably empty road. Then, just when you think you MUST'VE passed it, there's a sign directing you to a series of switchbacks heading up the side of the mountain. It's a nice enough casino, and the view from the parking lot is pretty good. But it's just not worth the drive. I can't think of a direction a person could come from without having to pass at least one other casino...

Quote: rdw4potus

There's no market for a 35,000 sqft warehouse on a mountain top in southern california? shucks!

The Yavapai own & operate Cliff Castle in AZ. I'm not sure if they also have interests in Southern California. Santa Ysabel is laughably in the middle of nowhere. Coming from Rincon, you take a desolate road to a more desolate road, to a laughably empty road. Then, just when you think you MUST'VE passed it, there's a sign directing you to a series of switchbacks heading up the side of the mountain. It's a nice enough casino, and the view from the parking lot is pretty good. But it's just not worth the drive. I can't think of a direction a person could come from without having to pass at least one other casino...

LOL, and I thought Rincon was way the hell out of the way! hahaha