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Sealaska's $14.7 million investment in a California casino has been repaid along with more than $7 million in management fees and interest, officials from the Native corporation said Thursday.
Casino returns for Sealaska Corp.
Amount invested: $14.7 million.
Amount paid to Sealaska: $22 million.
Amount of additional revenue between now and 2010:
$2 million per year, or $14 million.
Sealaska is the Juneau-based regional corporation for Southeast Natives. It was formed by Congress in 1971 under the Alaska Native Claims Settlement Act.
The San Pasqual Indian Band in San Diego County, Calif., paid Sealaska under a debt-restructuring package that allowed the band to initiate an early-payment option in the investment agreement, said Todd Antioquia, director of corporate communications for Sealaska. A total of about $22 million was paid in December, he said.
"We received all principal, accrued interest and management fees," Antioquia said. "As the first lender, we were also entitled to a carried interest in the operation, so we'll get a return of their gross revenues until May 2010."
The return should be about $2 million a year, he said.
The San Pasqual Indian Band opened the Valley View Casino, a $27 million project, in April 2001, said Dave Toler, a member of the band's management committee. The casino is 25 miles inland from the Pacific coast, between San Diego and Los Angeles. Sealaska was the only private investor in the casino.
"We've been looking at opportunities in Indian gaming for some time now," Antioquia said. "It's part of our strategic plan, and this was our first venture into it."
The two companies were brought together by a "middleman," Toler said.
"What happens in this business is they, I believe, were looking for an investment and they were contacted by a middleman in a sense who brought us together," Toler said.
"They're good business people," Toler said of Sealaska's management. "They protect and look after the interests of their shareholders."
The band chose to restructure its financial management in December 2002. It repaid Sealaska and refinanced the project with a loan from Bank of America, Toler said.
"We had an opportunity for a better interest rate," he said.
The band will use the money it saved with the refinancing to expand the Valley View Casino. No plans for future investments have been made between Sealaska and the San Pasqual Indian Band, officials said.
Sealaska plans to continue its strategic growth plan, which is focused on securing federal contracts, Antioquia said. Indian gaming and telecommunications also are part of the corporation's fiscal strategy, although no specific investments are planned.
Christine Schmid can be reached at firstname.lastname@example.org.