An investment group is making plans to build what would be the state's first casino near Hardeeville, but it's already meeting resistance from Gov. Nikki Haley's office.
The project, which would be owned by Cherokee Indians, would include a 400-room luxury hotel, dining, an events center and access to a golf course. It's would employ 2,250 and create $92 million in wages, salaries and benefits in jobs-poor Jasper County, according to a consulting firm hired by the investment group.
The gambling resort would be within Hilton Head Lakes, a residential development on U.S. 278 -- 18 miles from Hilton Head Island and three miles from Exit 8 on I-95. The United Keetoowa Band of the Cherokee Indians in Tahlequah, Okla., would own it.
Jasper County and city of Hardeeville councils passed resolutions endorsing the project Thursday and asked the state and federal government for support. The local leaders hailed it as a boon to Lowcountry tourism that could help cure chronic unemployment.
"I will push to support any big business that wants to come here to add jobs and take some tax burden off of our residents," said the Rev. Samuel Gregory, chairman of the Jasper County Council. "It's a great idea and sell for Jasper County at a time when we're all fighting for jobs."
Significantly, one of the people involved in trying to bring the casino resort to the Lowcountry is a well-connected Columbia attorney who has been involved in successful business recruiting deals in the past. Dwight Drake, who is with the Columbia-based law firm Nelson Mullins Riley & Scarborough, was a key player in paving the way for BMW to build an assembly plant in the Upstate. Drake ran for governor as a Democrat in the 2010 election.
GUBERNATORIAL, FEDERAL OK NEEDED
The U.K. Band of Cherokee Indians is a federally recognized tribe that traces its history and ancestral territory to South Carolina, according to Drake. The casino would require approval from Gov. Haley and the U.S. Department of the Interior's Bureau of Indian Affairs.
Under the federal Indian Gaming Regulatory Act, before a tribe can request that "off-reservation" land be taken into trust by the U.S. government for gaming purposes, the bureau must determine that doing so is in the tribe's best interest and not detrimental to the surrounding community. The state's governor must also agree.
"The governor has no intention of signing any memorandum of understanding that would enable casino gambling," said Rob Godfrey, a spokesman for the first-term Republican.
Bill Miles, president and CEO of the Hilton Head Island-Bluffton Chamber of Commerce, said he was unfamiliar with the project and remains to be seen whether it will benefit the area.
A principal with firm that is pushing the casino resort said he's in no hurry.
Ralph Teal of Myrtle Beach -- managing partner of SB Investment/Development, which is representing the tribe and owns Hilton Head Lakes with Stratford Land -- said the group plans to make its case to Haley in the next few months.
"This is not a sprint, but a marathon. We're in the first steps," Teal told Jasper County officials Thursday. "It could be 12 to 24 months until construction ... but we are 100 percent dedicated to working with the community to make it possible as soon as possible. We are full-steam ahead."
Teal also said the investment group and tribe do not plan to seek tax incentives for the project.
"We have the wherewithal to do it ourselves," he told the local leaders.
The casino would not require legislative approval. State law prohibits casino gambling, but federal law supersedes when it comes to regulating gaming on Indian lands, according to the Interior Department.
Congress passed the Indian Gaming Regulatory Act in 1988, "as a means of promoting tribal economic development, self-sufficiency and strong tribal governments." Proceeds are used to pay for tribal government, health care, education and housing.
South Carolina lawmakers banned video poker in 2000 after years of debate and legal wrangling but approved a lottery to fund education that began in 2002. Since then, some legislators have occasionally called for other forms of legalized gambling.
At its height, video poker was in 37,000 establishments and did nearly $3 billion a year in business, bringing $60 million into the state treasury. But opponents argue it came at a price that included addiction, crime, lost work time, bankruptcies and financial hardship.
Every year, thousands of visitors flock to the docks of Little River north of Myrtle Beach to board one of two casino gambling boats that travel to international waters, beyond the state's territorial limit, allowing passengers to gamble legally. Since their arrival more than a decade ago, the boats have been steeped in controversy but survived court challenges and lawmakers' efforts to ban them.
The General Assembly later passed a bill allowing local governments to ban or regulate the gambling cruises. North Charleston approved casino boats in 2010, but financing issues have postponed their launch, according to The (Charleston) Post and Courier.
CONSULTANT: AREA AN 'UNTAPPED MARKET'
Indian gaming held steady in 2010, providing a bright spot in a U.S. economy that continued to slide into a deeper slump, according to most recent figures from the National Indian Gaming Commission.
The industry enjoyed gross revenue of $26.5 billion in 2010, roughly matching revenue a year earlier, according to the commission.
"You have an untapped market," said Brent E. Wittenberg, vice president of Marquette Advisors. "Tribal casinos out-performed commercial (ones) because U.S. gamers are trading down from more expensive trips to Las Vegas (and) Atlantic City, and many tribal casinos are now offering a similar experience closer to home."
The nearest are in Cherokee, N.C., Tampa, Fla., and Wetumpka and Montgomery, Ala.
The economic-impact analysis of the gambling resort proposed for the Lowcountry estimates it will attract more than 4 million visitors a year, with 70 percent from outside the state.
"We are talking about a tremendous economic surge for the entire area," Teal said. "People from out of state who normally bypass South Carolina will bring their money here, which will benefit businesses and individuals throughout the Lowcountry and (state)."
Other findings from the analysis claim the resort will generate $20.3 million in statewide sales tax, including $14.2 million in the Lowcountry. The casino would be exempt from property taxes but still subject to other state and local laws, Drake said.
In total, the investment group claims the project will create 4,700 new jobs with $185 million in employee compensation. This includes the impact of casino purchases for goods and services and spending by employees and guests in the state.
"A rising tide floats all ships, and that's exactly what will happen with this venture," Hardeeville City Manager Bob Nanni said. "To turn your back on this type of opportunity, you don't have the best interests of the region at heart."
Hardeeville Mayor Bronco Bostick agreed.
"It's one of the biggest things that can happen in our state other than BMW," Bostick said. "It's going to change this whole territory and that's what we need. We need jobs."
Follow reporter Tom Barton at twitter.com/EyeOnHiltonHead.
- U.S. Department of the Interior -- Indian Affairs
- Hilton Head Lakes promises to be first-class living: Dec. 20, 2011
- Residential real estate sales heat up in greater Bluffton: Aug. 16, 2011
- Tradition Hilton Head, Hilton Head Lakes to become single community: Jan. 15, 2011
- Development group invests in Hilton Head Lakes, Tradition Hilton Head: Dec. 29, 2010