FEIS - Tahoe Regional Planning Agency

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RESPONSE TO COMMENTS ON THE DEIS B o u l d e r B a y C o m m u n i t y E n h a n c e m e n t P r o g r a m P r o j e c t E I S Comment 100-b: Comment Summary - The observed existing traffic levels baseline of 1,835 trips may be too high based on evidence of decreasing use of the Biltmore and neighboring casinos, perhaps due to competition from Indian gaming. Year Notes Table 8.5-4 provides a North Lake Tahoe Market Analysis from 1998 to 2008. Table 8.5-4 North Lake Tahoe (NLT) Market Analysis 1999-2008 NLT Gaming Win (1999 $) NLT Gaming YOY% (1999 $) Operating Indicators NLT Gaming Revenue Index (1999 $) 1998 38,873,461 7% 87% 1999 Cache Creek Casino adds slot machines and table games Biltmore Revenue YOY% (1999 $) Biltmore Revenue Index (1999 $) 41,859,000 8% 100% 100% 2000 20 year peak in NLT gaming 42,034,243 0% 100% 4% 104% 2001 38,982,875 -7% 93% -4% 100% 2002 Crystal Bay Club (CBC) files for bankruptcy (BK) in May 20 year peak in Biltmore revenues due to CBC BK 2003 Crystal Bay Club opens under new ownership in July 2004 Cache Creek opens $200 million resort with 2,400 slot machines and 150 table games Thunder Valley Casino opens June 9th 35,590,235 -9% 85% 10% 110% 33,195,886 -7% 79% -8% 101% 36,853,852 11% 88% -9% 92% 2005 36,506,011 -1% 87% -10% 83% 2006 35,001,809 -4% 84% -11% 75% 2007 33,977,282 -3% 81% -10% 67% 2008 Red Hawk Casino opens December CalNeva receives Notice of Default 26,370,109 -22% 63% -20% 54% Source: Boulder Bay Resort, 2010 As shown in the table, Indian gaming began providing competition to Tahoe gaming in 1999 when Cache Creek Casino added slot machines and table games. The Tahoe Biltmore continued to operate at optimum conditions through 2003. In 2003, Cache Creek Casino expanded and Thunder Valley Casino opened. The Biltmore was operating at 92% of optimum conditions. The information in the table suggests that the operating conditions at the Tahoe Biltmore are not directly related to the operation of Indian casinos. PAGE 8- 38 HAUGE BRUECK ASSOCIATES SEPTEMBER 8 , 2010
RESPONSE TO COMMENTS ON THE DEIS B o u l d e r B a y C o m m u n i t y E n h a n c e m e n t P r o g r a m P r o j e c t E I S Based upon an evaluation of inflation adjusted Nevada Gaming Control Board (NGCB) reported annual revenues for the North Lake Tahoe (NLT) Market, the peak revenue year was 2000. This is consistent with NDOT and CALTRANS Average Annual Daily Trip (AADT) reports that show peak traffic volumes for the SR 28 corridor between 2000 and 2002. This analysis in Table 8.5-5 demonstrates that, between 2000 and 2007, the NLT market declined by approximately 19% or about 2.4% per year over 8 years. In 2008, the market declined by 22%, or over nine times the average rate of decline during normal economic conditions including the expansion of Tribal gaming. Between 2000-2008 a number of casinos were opened in California and across the country including Thunder Valley and the $200 million resort at Cache Creek, and are reflected in this 2.4% average annual decline. There is no evidence to suggest that between 2007 and 2008 the decline due solely to competition from Tribal gaming would increase from an average of 2.4%/year to over 22% in one year particularly given that no new casinos were opened during 2008 until December 17, 2008. This acceleration in decline suggests that there were temporary impacts such as the recession and gasoline prices as well as a permanent decline due to Tribal gaming. Table 8.5-5 Evaluation of Nevada Gaming Control Board Reported Revenues 2000-2009 Year Inflation North Lake Tahoe Gamin Revenues (1999 $) 2000 3.38% 2001 2.83% -7.3% Region II (NCAL) Tribal Gaming Revenues (1999 $) 2002 1.59% -8.7% +27.2% 2003 2.27% -6.7% +27.8% 2004 2.68% +10.5% +23.9% 2005 3.39% -0.9% +20.1% 2006 3.24% -4.1% +9.8% 2007 2.85% -2.9% -1.2% 2008 3.85% -22.4% -9.1% 2009 -0.4% -15.9% -5.0% Growth ’00-‘07 -19% +162% Avg. Annual Change 2.8% (Avg. ‘00-‘07) -2.4% +23.2% To explain this anomalous decline between 2007 and 2008 the Fehr & Peers alternative baseline technical memorandum assumes that the gaming and hospitality market at NLT experienced both a permanent 32% decline in revenue due to the expansion of Tribal gaming and a 28% decline in revenue due to temporary impacts SEPTEMBER 8 , 2010 HAUGE BRUECK ASSOCIATES PAGE 8- 39
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FEIS - Tahoe Regional Planning Agency

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