Hard Rock scores management deal

By Liz Benston (contact)

Friday, Feb. 4, 2005 | 10:57 a.m.

The Hard Rock Hotel and Casino Inc. in Las Vegas has snagged its first casino management deal with an Indian tribe, though an executive said the move was strategic and doesn't indicate a desire by the company to develop a full-blown tribal casino franchise like some of its competitors.

The Pauma-Yuima Band of Mission Indians tribe near San Diego voted this week to allow the Hard Rock to help develop and manage a casino and hotel for the tribe. The Pauma tribe had signed a development agreement with Caesars Entertainment Inc. in 2003 but that deal fell apart after Harrah's Entertainment Inc. announced plans last year to acquire Caesars.

Harrah's already manages a casino for another tribe near San Diego.

The Hard Rock, which is owned by restauranteur Peter Morton, had also been in the running for the contract.

The Hard Rock envisions building a "full-blown, world-class resort destination" for the tribe featuring up to 2,000 slot machines, 100 table games, restaurants, a spa and a 300-room hotel, President and Chief Operating Officer Kevin Kelley said.

The resort will feature entertainment venues similar to those at the rock and roll-themed Hard Rock but will still have its own identity, Kelley said.

"You still have to build a facility for your respective market," he said.

The Pauma tribe already operates a small casino with about 800 slots. The tribe has envisioned building a new casino at its existing site on more than 30 acres of tribal land off Interstate 15 south of Temecula. The tribe is already recognized by the federal government and has a compact with the state to operate the casino.

Before they can build a new casino, the Hard Rock and the tribe must enter into a written agreement with the county that spells out how the tribe will pay for emergency services and other ways the casino could tax public agencies.

The management and development contract with the Hard Rock also must be approved by the National Indian Gaming Commission, a federal agency that oversees tribal casinos.

Kelley said the company will be busy developing a previously-announced condominium complex next to the Hard Rock and isn't exploring other contracts with tribes.

"We really don't have any designs on doing other deals right now," he said. "We recognize this is a large deal that is going to necessitate a lot of time ... for our executives."

"We looked at this opportunity as unique," he said.

The project isn't related to two existing Hard Rock-brand tribal casinos in Florida and other Hard Rock-brand resort underway in Biloxi, Miss. Those properties are developed under a licensing arrangement with Rank Group Plc, a British company that bought the Hard Rock restaurant chain from Morton.