Casino opening defies odds – and the recession

Apr 23, 2009 7:54 PM
by David Stratton |

When the Quechan Tribe opened its $250 million Quechan Casino Resort earlier this year, it defied and overcame the effects of a slumping economy that nearly put the project – and the tribal government – into a financial abyss.

About 120 days before the opening, there was no resort or expectation of a grand opening. Because of a lack of funds, the project was just a shell with no staff, no brand, no slot machines, and no one to put the development back on track.

At the time, Fitch Ratings downgraded the Quechan Tribe’s ratings to "Negative Watch," based on the "erosion of the … tribal government balance sheet" and "potential for project construction disruption or delay."

But tribal leaders went out and secured a $13 million stop-gap loan from another tribe, then hired a management team led by CEO Marty Gross, a former Las Vegas casino boss who helped open the new M Resort and Station Casinos’ $1 billion Red Rock Casino, Hotel & Spa.

"There was nothing that resembled an imminent Mecca in the desert," Gross recalls. "In fact, there were no slot machines ordered, hotel amenities, menus for the restaurants were not designed, no future on the books.

"I knew right then that this new team would have to very quickly put our experience to work and roll up our sleeves and get to work in a very short fashion," Gross continues. "No one knew anything about this tremendous project being built in the Yuma/Imperial County and surrounding areas of Mexico."

Joining Gross were four experienced executives, all with roots in the Las Vegas gaming industry: David Julian, executive director of marketing; William McFerson, executive director of hotel operations; William M. King, executive director of slot operations; and Dale A. Jager, executive director of food and beverage.

Together, the management team had more than 120 years of experience. "We meshed immediately and decided to make some history," Gross says.

The team went to work with remarkable speed and efficiency. After Thanksgiving weekend, having worked together for just 30 days, the team set an optimistic grand opening date of Friday, February 13, 2009. That meant going from vision to reality in a mere 75 days.

Thus, Gross and has gang had to, among other things, establish and oversee the construction design, branding of the property, advertising campaign, recruitment of staff, pre-opening training, installation of surveillance and security systems, implement policy and procedures for each department and establish a sound financial reporting system.

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"We needed to create a world-class environment from near scratch," said David Julian, who previously worked for seven years on the Las Vegas Strip and 12 years for one of the country’s most successful Native American casinos. "Imagine the scope of the task: We had to pull everyone into our vision, architects and builders, vendors, suppliers. We virtually had to go overnight from no staff to one with 1,000 individuals covering the full spectrum of hospitality and gaming talent and somehow be ready to greet the public with a fully-operational, absolutely stunning casino and resort. And we needed to do this in 75 days.

"Everyone responded," Julian continues. "Marty was right. In my 24 years in the gaming business, I have never witnessed such a concerted, progressive and successful endeavor."

The payoff came, as predicted, on Friday, February 13, when the Quechan Casino Resort – affectionately called "The Q" by its developers – opened its doors, on schedule and slightly under budget.

The opening was greeted by thousands of patrons, many of whom navigated a 6-mile long traffic jam that drew customers from California, Arizona and Mexico.

For more than 15 consecutive hours, more than 20,000 customers streamed into the 300,000-square-foot, Mediterranean-themed resort, its state-of-the-art casino and gaming floor with 1,000 of the latest slot machines, 24 table games, poker room, 166-room hotel and five top-shelf restaurants.

Since its opening, The Q has prospered, generating significant revenues and cash flow to put the Quechan tribal balance sheet back into the black.

The new casino’s success hasn’t gone unnoticed by the financial markets. On Tuesday, Fitch Ratings removed the Quechan Tribe from its Negative Watch list, and affirmed the tribe’s rating outlook as Stable.

"Stable" may not sound like much, but in today’s financial climate, it certainly beats the alternatives.

Question? Comment? E-mail me at: David Stratton