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Dueling casinos: Pinnacle owner, Cherokee agreement sets up conflicting proposals for Southwest Va. gambling

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BRISTOL, Va. — Developer Steve Johnson and a federally recognized Cherokee tribe announced an agreement last week to establish a proposed casino in Washington County, Virginia, just one day before the General Assembly convenes for a session that could see the state legalize casino gaming.

The new casino proposal raises questions about whether longstanding plans for a casino at the former Bristol Mall site will face competition and how the dueling casino proposals may ultimately play out.

Under the announced agreement, the Eastern Band of Cherokee Indians [EBCI] would develop and operate a casino on part of a 350-acre tract owned by Johnson adjacent to The Pinnacle, a retail complex he developed across the state border in Bristol, Tennessee.

“I have visited the site along I-81 and I am impressed with its strategic, gateway location that serves a five-state area,” Richard Sneed, chief of the EBCI, said in a news release about the new proposal. “It is our wish to bring new tax revenue and jobs to Washington County and the Southwest Virginia region in a positive and impactful way.”

The tribe is known for its Harrah’s Cherokee Resort Hotel and Casino in Cherokee, North Carolina.

In addition to a proposed casino and luxury hotel, development on the Virginia side of the border would include a 15,000-seat outdoor concert venue, recreational facilities and a hotel with an indoor water park, the release states.

But this isn’t the only casino project in the works for the Bristol area — local businessmen Jim McGlothlin and Clyde Stacy have proposed opening a Hard Rock Bristol Resort and Casino in the former Bristol Mall, located within the city limits of Bristol, Virginia.

The Bristol casino group issued a statement Tuesday evening saying they have worked for 16 months with state and local leaders to complete the project, “as a catalyst to boost our local economy in Bristol and Southwest Virginia. We understand, first-hand, what these jobs mean to our community.”

Bristol is one of five cities across Virginia that state leaders have considered for legal casino sites. A Joint Legislative Audit and Review Commission study released in late November showed a casino in Bristol could prove financially viable and generate more than 1,000 direct jobs and $130 million in annual revenue.

The study did not consider a casino in Washington County, however, and it remains to be seen whether Virginia would license a casino outside of the Bristol city limits.

Plans for The Pinnacle-adjacent casino drew sharp criticism from Bristol Virginia City Manager Randy Eads shortly after their release.

“There is an old saying that imitation is the sincerest form of flattery,” Eads said during a news conference the same day. “And the city appreciates Mr. Johnson recognizing the tremendous effort we have made as a city to revitalize the old Bristol Mall and bring true economic development opportunities to Southwest Virginia by imitating our initiative to bring a resort casino to Bristol, Virginia.”

A casino just across the border in Washington County was not authorized by the General Assembly or studied by JLARC, Eads said.

“It’s not even a feasible thing to consider right now,” he said.

Proponents of the EBCI casino say the same JLARC report lends support to using a competitive bidding process to award casino licenses.

“That JLARC study came back and said several things of importance, but one of which is that regional competition is vital to identifying the best projects, and we agree with that,” said Greg Habeeb, a partner at Gentry Locke in Richmond, which was retained for the project by the EBCI. Habeeb is also a former member of the Virginia House of Delegates.

It’s unclear whether a competitive process would include casino operators outside of the studied cities.

For his part, Johnson said that he thinks his potential casino site makes the most sense for Southwest Virginia, citing its location along Interstate 81 and at interchanges between I-81 and U.S. Highway 11W and Gate City Highway.

“Any municipality would want a project like this. Again, I can’t help where the [locality] lines are drawn,” Johnson said. “To me, it’s not a Washington County–Bristol, Virginia issue. It’s a Southwest Virginia issue. It’s a state of Virginia issue.”

Asked about tensions over whether a competitive bidding process could extend across locality borders, Johnson said the General Assembly will decide the matter.

It would not be the first time Johnson has been in competition with Bristol, Virginia. His development, The Pinnacle, and The Falls, the retail/dining complex developed just miles away by the city of Bristol, Virginia, were announced days apart in 2012. For years, the developments have competed for tenants, though The Pinnacle has been more successful.

Johnson said he had been in talks with the Eastern Band of Cherokee Indians about the casino project in recent years but declined to provide more specifics.

Staff writer David McGee contributed to this report.


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