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Wednesday, 30 September 2015 14:17

New casino likely to transform Murphy

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coverThe new Valley River Casino and Hotel built by the Eastern Band of Cherokee Indians on the outskirts of Murphy will have far-reaching impacts on the far western corner of the state, forever changing the economic and cultural landscape of the region.

SEE ALSO:
Opening day draws a crowd to new Murphy casino
Why Murphy?
New casino to expand professional opportunities, financial security for Cherokee

The Murphy business community has heralded the casino’s arrival for both the jobs it will bring — 1,000 new positions — and the influx of visitors — an estimated 1.5 million a year.

The multiplier impact of added visitors is harder to measure, but the direct impact of jobs and payroll is immediate.

“The biggest impact we will see is jobs creation,” said Josh Carpenter, Cherokee County Economic Development Director.

Valley River Casino has become Cherokee County’s largest employer overnight. The casino is a game changer for the service industry workforce, which is typically a lower-wage, lower-benefit job type.

“What the casino has done for the service sector is amazing,” Carpenter said.

Lumpy Lambert, the general manager of the new Valley River Casino, said the casino is known for its second-to-none benefits.

“We feel like we have a good benefits package and competitive pay. Not just that, but we provide long-term career path opportunities,” Lambert said.

But the hourly wages for lower-end positions like food service workers and hotel housekeepers are still lower than those found in construction, health care, manufacturing and professional fields. 

“There were some concerns early on about ‘Hey is this the kind of thing we want?’” Carpenter said.

But the influx of jobs in the service sector — even if they aren’t as good as jobs in other fields — are better than no new jobs at all. And compared to other service sector jobs, the casino offers better wages and benefits than a comparable position at a fast-food chain or gas station.

“For a service sector job, it is offering a good wage and benefits,” Carpenter said.

Competition for the labor pool poses challenges for some small business owners, who have already been losing employees to the new casino.

“I am hiring everybody I can,” said Jeremiah Smith, owner of Doyle’s Cedar Hill Restaurant in Murphy. 

Smith was trying to snatch workers up — in part in hopes of overflow business from the casino patrons, but in part because he is concerned about a labor shortage.

Smith lost only one employee to the casino, one of his sous chefs who left because the casino offered better benefits and more money. Other restaurants and businesses have lost far more, he said.

“I did a lot better than other people,” he said.

But Smith worries about the labor pool in the future, when he has to replace employees due to natural attrition. 

“All the ones that have gone to the casino won’t be available when I go to hire next,” Smith said. “The pool for service is so limited.”

Carpenter said it’s not necessarily a bad thing if the casino puts upward pressure on service sector wages.

The opening of the casino will also help flatten out the seasonal ups and downs typically seen in the service sector. As with all mountain counties, Cherokee County’s unemployment rate ebbs and flows with the tourist season. But the casino will be year-round.

“It will help to stabilize that rate over the course of the year,” Carpenter said.

Smith concurred.

“I have watched so many restaurants open up and close down, open up and close down. Our summers are great around here, with the rivers and lakes and fun stuff to do. As soon as the first frost comes it is like ghost a town,” Smith said. “You save money during the summer and winter time you hope you saved enough to make it until April or May when business comes back.”

So far, the casino has not had trouble recruiting a willing labor pool, according to Lambert.

Finding 1,000 ready workers in a rural community was no small undertaking, but the casino has drawn from a labor pool in surrounding counties as well. The majority of employees hired are from Cherokee County — about 60 percent — with Clay, Graham and three north Georgia counties accounting for most of the remainder.

“There was initially a concern about where are we going to get all those employees, and we said, ‘Look, you have to realize you are not pulling from a small population,’” Carpenter said.

The casino has allowed its existing employees at the main Cherokee Casino and Resort in Cherokee to transfer to the new casino in Murphy. The main casino in Cherokee has more than 2,500 employees who commute from across the region.

More than 215 have transferred from the main casino in Cherokee to the new one in Murphy in order to be closer to home.

That in turn has freed up job openings at the main casino in Cherokee.

“We have a current base of employees that will transition to Valley River, and that will open up job opportunities at this property for folks in the Jackson County and Haywood County areas,” Robinson said.

The job creation at the casino will have an indirect economic impact on the region’s economy as well.

Carpenter has estimated there will be 500 additional jobs created in Cherokee County indirectly as a result of all the new casino employees.

The casino will have a payroll of more than $40 million.

“You got increased earnings circulating in the economy, which is more dollars people have to spend,” Carpenter said.

And that in turn will allow other businesses to grow and open.

 

Trickle-down and spill-over

Aside from jobs, the other obvious impact of the casino is the number of new visitors who will be passing through Murphy.

But the trickle-down effect from those visitors is hard to predict. Theoretically, it should be a positive.

“They are anxious for the property to come to life there. They realize there is the economic potential for them,” Lambert said.

But it’s unknown whether the larger community will be able to capitalize on the surge of people coming to the casino.

“Every merchant is eagerly waiting to see what the effect is going to be. We are all poised,” said Phylis Blackmon, executive director of the Cherokee County Chamber of Commerce. “There have been many meetings with groups of people looking at how we think it will affect us. Each group has a slightly different take on it.”

It’s hard for the business community to prepare, however, because they don’t know how many visitors the casino will bring. And the casino isn’t entirely sure either — it only has a best guess.

“Intuitively there are some unknowns,” Lambert said. 

They are guessing 1.5 million a year, but can’t predict how many will be staying overnight in the area or day-tripping.

“We don’t know the length of stay,” Lambert said.

As for the demographic of the average visitor?

“That’s to be determined,” Lambert said.

The raw numbers of visitors don’t tell the whole story, anyway. What’s more important is whether the surrounding community can get a piece of the pie.

“It remains to be seen, but we hope it will be the case. We are certainly going to put forth every effort,” said Murphy Mayor Bill Hughes.

There’s a chance — a good chance perhaps — that the visitors to the casino will drive in, hang out at the casino, and leave again. They may buy nothing but a pack of gum and soda at a gas station on the way through.

But that’s not going to stop the Murphy business community from trying.

“We all know that gamblers usually come in and go to the casino and gamble and usually leave. Right now we are trying to think of some marketing schemes to get them to come through the town of Murphy and leave a few dollars with the local merchants,” said Hughes. “There are plans being put together to entice folks to come in and look us over.”

If Hughes could get only a couple minutes’ face time with a fraction of the casino’s visitors, Murphy’s job would be done. Hughes is a self-described eternal optimist, rarely seen in public without cuff links and always willing to talk about why Murphy is the greatest town on earth.

“People are friendly, mannerly, they say hello, and when they say ‘Hello I’m glad to see you,’ they aren’t just being sociable, they are glad you’re here,” Hughes said. “We have fly fishing, whitewater rafting, lake fishing, biking, hiking  — put all those outdoors sports together. We have a wonderful artists’ colony here I never dreamed existed until we provided an outlet for them.”

Hughes is particularly proud of the hanging basket beautification project downtown, which appeared in last week’s edition of the local Cherokee Scout.

“If I say so myself, it is quite beautiful,” said Hughes, whose been the mayor for nearly 30 years.

Murphy is primed and ready to become the mountains’ new flagship small-town destination, Hughes said.

“The casino is going to supercharge the whole thing,” Hughes said.

The town landed a $50,000 grant to develop a branding campaign to market Murphy. The initiative is being spearheaded under Carpenter at the economic development commission. It’s in the early stages — a consultant to lead the branding process has just been hired. The brand will have to be flexible enough to appeal to a wide demographic because no one knows what the average casino visitor will look like.

Will they be senior citizens on a tour bus or Asian businessmen from Atlanta?

Carpenter said they will take all comers.

“We are going to try to convince them to come in to Murphy,” Carpenter said. “Whether they are the blue-haired lady from Atlanta on a motor coach for a day or a 50-year-old on a motorcycle coming for a weekend with a lot of disposal income — those are all people coming by your shops, and that that is what we are leveraging.”

Even if Murphy can convince 1 or 2 percent of the casino visitors to check out the town, it will be significant. 

“Somebody who has never, ever thought to come to Murphy may now have the thought, ‘Well, hey, let’s go there,’” Carpenter said. 

Meanwhile, a group of hotel and restaurant owners came together last year and formed a looseknit hospitality association. They began laying the groundwork for cooperation in capturing casino customers, and doing so by working together.

“My personal belief is marketing an individual business is a lot harder than marketing a destination,” said Smith, a founder of the new hospitality association.

“This is the biggest thing I want to jump ahead on. We want to tell people we have this awesome town and great places to eat and things to do, and we also even have a casino.”

Smith said that’s the message: Murphy isn’t that town where the casino is, but Murphy’s an awesome town, and oh, by the way, it has a casino, too.

 

Wait and see

Still, it’s been hard to get most business owners too excited before the casino actually opened.

“I can sit here and do projections all day, but ultimately, I think the biggest thing we are waiting to see is how much traffic there is, where are they coming from and who that person is,” Carpenter said. “I think you have a lot of people in the wait-and-see mentality.”

The most obvious business opportunity is in lodging. The on-property hotel at Valley River casino has only 300 rooms.

“At this point their hotel does not have enough rooms for people who want to stay there, so this will help the accommodations industry,” Blackmon said.

Entrepreneurs are leery about jumping on the bandwagon to capture casino overflow, however, knowing that the tribe will likely expand its operation in the near future, if things go well.

“That building is going to be under construction the next 10 years. They did the bare minimum to get open and get the hype going,” Smith said.

A hotel built today could rake it in for a few years until the casino expands its own on-site hotel.

But at least for now, the prospects are good.

“There will be plenty of overflow,” Smith said, particularly in dining.

The casino has limited food options. There is no sit-down restaurant yet. The only food onsite is a food court populated by chain franchises like Papa John’s and Panda Express.

Smith saw that as a huge opportunity. He bought a passenger van and struck a deal with the casino to run a shuttle from the hotel to his restaurant.

Meanwhile, four new restaurants have opened in the Murphy area over the past year.

Smith said he has already seen the impacts of the casino business at his own restaurant — primarily from the constant stream of subcontractors and vendors in town during construction.

“It used to be on a Friday night and I could look through the dining room and I could name everybody in there, and now, it seems like in the past year, I look around and only know half the people in there,” Smith said.

He expects that to continue even now that construction is done due to the steady stream of vendors and companies angling to do business with the casino.

“They send their top-end sales people out here trying to work deals, and we have been getting a lot of big parties from that,” Smith said.

The casino sits along the four-lane highway just north of Murphy. There is little in the way of development in the immediate vicinity — it’s mostly vacant land and fields. The coming of the casino hasn’t prompted a land rush, but speculators are watching. The only new business definitively on the horizon so far, however, is a Walgreen’s drug store.

“There are a lot of rumors floating around and you don’t really know what to believe,” Hughes said.

The four-lane highway through Murphy sees about 19,000 cars a day in both directions. The majority of casino visitors will come down this thoroughfare.

“Many people are interested to see how that is going to manifest itself, how that is going to play out,” Blackmon said.

A surge of development around the four-lane on the outskirts of town could have its down sides. It could create the classic sprawl conundrum, with the commercial center of town deteriorating as businesses relocate to the new center of action on the outskirts.

Carpenter said he doesn’t think new development will be at the expense of downtown, however.

“We don’t want to rebuild downtown outside of downtown. We want to compliment downtown Murphy,” Carpenter said.

 

Not all peaches and cream

Not every impact brought on by the new casino will be a welcome one. Some locals won’t like the heavier traffic along the four-lane highway through town. And those who like a small rural town won’t like the idea of hundreds of people relocating to Cherokee County for the job prospects the casino offers.

Cherokee County commissioners last week passed an updated ordinance regulating adult entertainment establishments, aimed at getting out in front of any untoward businesses that might open to cater to casino clientele.

And law enforcement agencies have been meeting to discuss a team response to the prospect of higher crime, particularly whether to expect higher incidents of drunk driving, as the casino sells alcohol.

“If people bring drugs in, we will be on the lookout for that. If they are driving under the influence they will be stopped and tried under North Carolina law,” Hughes said.

The bar scene is relatively new in Murphy. Until five years ago, wine was the only type of alcohol you could get at a bar or restaurant. While beer and liquor drinks are legally on the menu, there are still only three bars.

And there’s just one cab driver in the town.

Hughes said he doesn’t expect many negative side effects from the casino.

“We realize there will be some problems coming along, and if and when they do develop we want to act instead of react,” Hughes said.

In a worst-case nightmare, the main casino in Cherokee indirectly led to the murder of two men in Swain County several years ago.

A group of urban gangster-types from Atlanta were on a multi-day drug and gambling spree at the Cherokee casino and hotel when their money and drugs ran out. They ventured into the community to find more drugs to buy, and ended up killing two men in their home in nearby Bryson City in a ruthless robbery. 

While tragic events like that are incredibly rare, it’s safe to say had it not been for the casino, the group of thugs from Atlanta never would have found their way to Bryson City in the first place.

What’s far more likely is that the 1,000 jobs at the casino with continual openings will lead to newcomers who settle down in Murphy and Andrews.

“New people will be coming in with new attitudes and appreciations and habits and so forth, and it will be a mixing bowl,” Hughes said.

The last time there was a project of this magnitude in Murphy was the building of Hiawassee dam in the 1930s.

“This will make a change in our community,” Blackmon said of the casino.

Rarely does change come along in such a single, defining stroke.

“I think in 30 years we would have been different whether the casino came or didn’t come,” she said.

 

 

Labor pool snapshot

The Valley River Casino and Hotel in Murphy has 1,000 employees, primarily from Cherokee County where the casino is located, but drawing from surrounding counties as well. Here are rough employment numbers from select counties as of a week prior to opening.

North Carolina

• Cherokee County: 450

• Clay County: 80

• Graham County: 45

• Jackson County: 24

• Swain, Macon and Haywood: a dozen or so each

Georgia

• Union County: 70

• Fannin County: 65

• Towns County: 37

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