River Rock Casino misses bond payment

  • River Rock Casino, near Geyserville, has seen its revenue plummet and has had to reduce its workforce, since the opening of the Graton Resort & Casino, in Rohnert Park. Photo taken on Tuesday, March 18, 2014.

    (Christopher Chung/ The Press Democrat)

In another sign of the economic impact from a rival casino, the Dry Creek Pomo tribe failed Thursday to make a scheduled interest payment on bonds used to build the 12-year-old River Rock Casino near Geyserville.

The tribe is now exploring its options to repay investors and lure back customers who jumped to the new Graton Resort and Casino in Rohnert Park, which opened in November.

"We took a significant hit to our revenues," said River Rock General Manager David Fendrick.

River Rock's revenues declined by more than 30 percent after the rival casino opened, the Dry Creek Pomos' chairman, Harvey Hopkins, said in March.

River Rock will make use of a 30-day grace period to seek ways to reduce costs and to have "significant dialogue with our bondholders," said Fendrick, who also is CEO of the tribe's entertainment authority.

"We're going to evaluate where we are for the next four weeks or so before we make a final decision on what we're going to do," he said.

River Rock opened in 2002 as the county's first tribal casino. To finance construction of the facility on a hill overlooking Alexander Valley, the tribe sold $200 million in senior notes to investors at 9.75 percent interest.

In 2011, the tribe restructured the debt after two rating agencies warned that the business otherwise faced a high risk of default.

By March, about $50 million of that debt had been repaid, Hopkins said at the time.

But the tribe has acknowledged that it now faces stiff competition.

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