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Station Casinos files bankruptcy


The Las Vegas gaming company bankrolling plans to build a casino resort on the western edge of Rohnert Park filed for bankruptcy protection Tuesday after it failed to reach an agreement with its creditors about restructuring debt.

The bankruptcy filing by Station Casinos Inc. casts more doubt about its plan to build a casino in Sonoma County in partnership with the Federated Indians of Graton Rancheria. The project is already embroiled in a federal lawsuit and staunchly opposed by some community members.

?I?m deeply satisfied that this bankruptcy will slow it down,? said Chip Worthington, founder of Stop the Casino 101. ?It?s a significant victory for the opponents of the casino, but we are not letting our guard down. We are not stopping our opposition.?

A casino spokeswoman said the bankruptcy had no effect on its plans for the Rohnert Park gaming resort, which would house 2,000 slot machines, a 300-room hotel, convention center and theater.

?There will be no impact to our tribal gaming partnerships,? said Lori Nelson, director of corporate communications for Station Casinos. ?We move forward with the business plan.?

Station Casinos purchased 273 acres of land in Rohnert Park in 2005 in anticipation of converting the area into a reservation for the Graton tribe, which could then potentially open a casino on the site.

Progress has been slowed by opponents of the casino, who sued the federal government to prevent the land from becoming a reservation. The case is still in court.

Station Casinos announced in February it was working with bondholders to reorganize debt in an attempt to stave off bankruptcy. Those negotiations failed and it voluntarily filed for Chapter 11 bankruptcy protection Tuesday.

Station Casinos has spent more than $140 million trying to develop the Rohnert Park land into a casino, according to its quarterly earnings report. It spent $100 million buying the land, and has given millions of dollars directly to the tribe.

Opponents of the casino believe the tribe will have to cut back its spending if Station Casinos is having financial difficulty and unable to continue making payments.

?The cash cow is dead, or at least injured,? said Marilee Montgomery, an opponent of the casino. ?This will affect the tribe.?

Since the casino deal was announced in 2003, the tribe has donated $4.3 million to the Rohnert Park police special enforcement unit. It also has donated at least $2.5 million to the Sonoma State University, which is located within 3 miles of the proposed casino site. The university used the donation to create an endowed chair of Native American studies and offered the position to the tribe?s chairman, Greg Sarris, who is a former tenured UCLA professor. The endowment paid him $477,347 over a three-year period ending in 2007, according to SSU foundation tax records.

Sarris did not return a telephone call seeking comment.

Station Casinos planned to get third-party financing to help pay for the $1 billion casino, according to its financial reports. Opponents on Tuesday questioned whether a company in bankruptcy could raise that kind of money.

?I would not be able to address that,? Nelson said.

Station Casinos, which blamed the faltering economy for a falloff in its finances, has $5.7 billion in debt, said Chief Accounting Officer Tom Friel.

Most of Station?s assets are maintained in casino-operating subsidies and affiliates and were not included in Tuesday?s filing with the U.S. Bankruptcy Court in Reno, Nev.

Station Casinos, which owns and manages 18 casinos and resorts, primarily in Nevada and in California, also announced Tuesday it planned to borrow up to $150 million in cash from a subsidiary.

In May, the company said it lost $33.7 million for the first quarter. That compares with a loss of $70.9 million a year earlier.

Revenue fell 20 percent to $282.7 million from $352.3 million on declines in room, casino, food and beverage revenue.