1/7/2009 9:05:00 AM Resort lays off 570, closing
Golden Moon on weekdays 260 Neshoba countians lose jobs; No. 1 mission to fund Tribe, CEO says
By DEBBIE MYERS and JIM PRINCE The Neshoba Democrat
The 570 layoffs announced on Monday by Pearl River Resort touched all properties and spared no level, from housekeeping to upper management, part of a broad plan to reduce expenses while continuing to fund Tribal government and debt obligations at nearly $100 million annually in a challenged economy that has riddled the gaming industry nationwide.
Pearl River Resort, an enterprise of the Mississippi Band of Choctaw Indians, also announced that the Golden Moon Hotel and Casino, one of two on the Reservation, will close on weekdays.
The layoffs, which affected only non-Tribal members and are expected to be permanent, left 260 Neshoba countians - or about 46 percent of the total - without jobs, officials said.
The Resort's No. 1 mission is to fund Tribal government in a robust manner, said Paul Harvey, president and chief executive of Pearl River Resort, the Choctaw enterprise that manages the Golden Moon and the other gaming property, the Silver Star Hotel and Casino.
"There are gaming companies that would die to make the money we make," he said.
The operational changes and layoffs come in response to the U.S. recession, a decline in gaming industry revenues and the over-expansion of Pearl River Resort relative to the size of its market, Harvey said.
While Neshoba County leaders said they were saddened by the job losses, they remain optimistic about potential new employment opportunities here in the near future. (See story below.)
David Vowell, president of the Community Development Partnership, said he's hopeful some of the affected workers could get on with the Census Bureau for the upcoming count. The Bureau is among those who will be on the Reservation Wednesday, he said.
"They will provide information on testing procedures that can lead to job opportunities," Vowell said.
The Silver Star, the Resort's original gaming property, will continue to operate seven days a week and the Dancing Rabbit Golf Club and Geyser Falls will operate under their normal schedules.
Harvey said employees were notified Monday morning without incident.
"It was very quiet with no incidents. Everything is going very smoothly," he said.
No more layoffs are anticipated, he said.
"People going into the Golden Moon this morning were coming out with paperwork in their hand," said one of the laid off workers from Neshoba County who asked not to be identified.
Employees being laid off received a large, white Resort envelope with about eight pages of materials, ranging from a letter explaining the layoff to 401K options, said the man who identified himself as a regular worker who had been employed for five years.
He said there had been a lot of rumors prior to the official announcement.
The man said the layoffs were handled much more professionally than four years ago when employees were called to a large assembly, terminated and then escorted out by security officers.
The layoff included about 120 employees from Winston County and the remainder from Leake, Madison, Attala and other neighboring counties.
Revenues at Silver Star remain strong, but the newer Golden Moon has strained Resort earnings since the day it opened in 2002.
Plans for a Ground Zero Blues Club in the Golden Moon have been put on hold, Harvey said.
A new management team installed when Miko Beasley Denson, leader of the Choctaw Indians, took office last year analyzed operations and found that the Golden Moon was an over-expansion for the market, poorly planned and based on a questionable feasibility study conducted by the now defunct Arthur Andersen, an accounting firm with little experience in gaming operations, Tribal officials said.
"The changes announced today will streamline the operations of the Resort for the market we need to serve," said Harvey. "Silver Star was and continues to be a strong business; however, the decision to build the Golden Moon, championed by the prior Tribal administration and Resort management, has overextended the Tribe financially."
He said the Golden Moon has dragged down profits for the entire Resort since it opened.
The financial strain has hampered the Resort's ability to make distribution or dividend payments to Tribal members.
Harvey said the Resort needs to earn at least $100 million annually to have:
• $60 million to fund the government;
• $20 million for debt service;
• $15 million for capital expenses or improvements.
Officials said they wanted to stress the fact that the Resort is sound financially and even made a $19 million debt payment last year above and beyond their obligation.
"We are focused on ensuring that Pearl River Resort continues to be a financially successful operation and we are confident that these measures will prove to be beneficial to our customers, employees, vendors, financial stakeholders and members of the Mississippi Band of Choctaw Indians," Harvey said.
James Streetman, general counsel for the Tribe, said the Golden Moon is a profitable property on weekends but not during the week.
"We want to emphasis the stability of the property. Although it is something we certainly didn't want to do, it was a necessary business move," Streetman said.
Per direction of Miko Denson, the Resort did not lay off any Tribal members.
In his 2007 campaign for chief, Denson ran on the platform of "Choctaw First" and has worked hard to sustain existing jobs for Tribal members during this economic downturn, officials said.
The Resort will make career counseling and job placement services available to all employees affected by the staff reduction.
Officials from the Mississippi Employment Security Commission were to be available today in the Choctaw Hospitality Institute to assist the affected employees with information about such things as unemployment benefits, Harvey said. (See story below.)
Employee health insurance will remain intact until the end of the month for those affected by the layoff, he said, noting that COBRA, which gives workers who lose their health benefits the right to choose a temporary extension, would also be available for those eligible.
Resort officials said an announcement would be made in the near future about the new operations of the Golden Moon and its plans to highlight the new weekend hours.
Preliminary plans call for themed weekends with great offers, promotions, events, entertainment and celebrity appearances, officials said.
"The new marketing plan will emphasis the Golden Moon making it a really special place on the weekends," Streetman said.
Harvey said Ken Davie, general manager of Silver Star, has resigned. Davie will return to Connecticut, where he had served as the vice president of table games for the Foxwoods Resort Casino before his arrival at Silver Star.
"We have a tribal member who has some very good casino experience and we are going to have her . . . be the general manager of Silver Star," Harvey said. "Susan O'Connell will remain the general manager at the Golden Moon."
During the tenure of former Chief Phillip Martin, the Tribe in the early 1980s began to emerge from extreme poverty with manufacturing jobs he attracted.
Later came the sprawling Resort with its casinos, Dancing Rabbit Golf Club and Geyser Falls water park.
The casinos have more than 100 table games, 1,074 hotel rooms, 16 restaurants, and European spa facilities. Last year, the Resort employed from 3,500 people to 4,500 in spring and summer when the two golf courses and its water park are busiest.
Harvey said Pearl River Resort is focused on replacing non-Tribal administrative officials with Tribal members.
"A great day for me is when I can trade seats and we'll have a Tribal president and CEO," Harvey said.
The Associated Press contributed to this story.
Reader Comments
Posted: Wednesday, January 07, 2009
Article comment by:
M. J. Phillips
I am sorry to hear that the Casino isn't successful.
I would like for the Chief to reconsider his language toward the NON TRIBAL people, THAT HE NEEDS to be successful. After all, if the NON-Tribal people , don't show up, all his income will dry up !
I hope you have a great year !
Posted: Tuesday, January 06, 2009
Article comment by:
TTown Jim
This morning I read a rather long article in The Tuscaloosa News about the Golden Moon being cut back to 3 days a week, the termination of only non-tribal employees, and the goal of removing ALL non-tribal management and other employees.
My wife, mother-in-law and I have been regular patrons of the Golden Moon since it opened and are very distressed about the financial problems the development has encountered. However, we are just as distressed about the dismissal of only non-tribal employees and management.
The past uccess of the resort has been primarily due to non-tribal patronage such as ours. Once the goal of eliminating all non-tribal employees is realized, I'm sure they will be successful with only tribal patrons. We can only assume that non-tribal patrons such as us will no longer be welcome, therefore, we won't be making the two hour drive over there again.
Posted: Monday, January 05, 2009
Article comment by:
Lisa
People who have looked at tribal revenue statements are saying the casion is making no less than it was 5 years ago. If it was going down so fast why did they spend so many millions on remodeling Phillip M's and spend 16 million for advertising with the Atlanta Braves.
Posted: Monday, January 05, 2009
Article comment by:
Jeff Goodwin
These people were not laid off. They were fired. You don't give laid off workers a severance package. By eliminating the people who can competently do their job to put Choctaw first , the place is really gonna suffer now.
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