Pinnacle Management Reviews Hurricane Katrina Damage and Establishes Plan for Recovery
LAS VEGAS, NV, September 6, 2005. Pinnacle's CEO, President and Senior VP of Construction have just returned from assessing the damage in the Gulf Coast and New Orleans region and the Company has established a plan for recovery. Pinnacle has two properties in the region that were directly affected by the hurricane, Boomtown New Orleans and Casino Magic Biloxi.
"Hurricane Katrina has been a terrible natural disaster," noted Daniel R. Lee, Chairman and CEO of Pinnacle Entertainment. "Many of our employees and customers in the region have lost their homes and many of their possessions. Very few have escaped from the storm unscathed. We are determined to do everything that we can do as a company to help the region rebuild and help our employees return to their normal lives as quickly as possible."
Pinnacle is moving quickly to assess the situation and support its employees. That includes moving forward to try to get both properties reopened and functional as quickly as possible. In the meantime, Pinnacle has continued to pay the base pay and provide other benefits to all its employees. It is Pinnacle's intent to get its employees back to work in some capacity as quickly as possible so that they can have continuation of employment and income.
Boomtown New Orleans
Property damage to the Company's Boomtown New Orleans property is believed to be minimal. The property has remained closed since before the hurricane hit and has not been flooded. The Company has hired private armed protection services to protect its property and there has been no looting at the facility.
The West Bank of the Mississippi, where Boomtown is located, appears to be in much better condition than the East Bank. The City of New Orleans and the heavily flooded St. Bernard Parish are on the so-called East Bank, between the Mississippi River and Lake Pontchartrain. The flooding in the region is principally from levees breached from Lake Pontchartrain.
Boomtown is currently being used as a base for utility crews attempting to restore electricity to the area. The Company is planning to provide food and shelter in its ballrooms and buffet to such crews. Boomtown New Orleans is bringing some employees back to work to provide security, food, housekeeping and other services to the utility crews based at the property. Boomtown also intends to continue to provide employment and financial assistance to all its employees until the property can resume normal operation.
Based on what is known today, the Company intends to reopen Boomtown soon after normal power and utilities are restored and governmental authorities determine that it is safe and appropriate for people to return to the West Bank. Current estimates by governmental authorities are that it may be as little as a week or as much as a month or more before people can return to the area.
Casino Magic Biloxi
The damage to Casino Magic Biloxi is extensive. The large storm surge in the Biloxi area caused the casino barge to snap clear of its moorings and the barge is now located several hundred feet from the water, on the north side of Highway 90. The Company's high-rise hotel was also extensively damaged. The Company is arranging, and will coordinate with its insurers, for structural engineers to determine if any portion of its Biloxi buildings can be salvaged. In the meantime, Pinnacle has contracted with armed protection services to safeguard its Biloxi property and to prevent people from entering potentially unsafe structures.
Pinnacle currently intends to rebuild in Biloxi. The Company is preliminarily working with the same team of architects, designers and general contractors who recently worked so well and efficiently together to build its Lake Charles casino hotel. Subject to approval of its insurers, management believes that using the same team may be the most efficient way to rebuild the Biloxi facility as quickly as possible. This team includes the Bergman, Walls & Associates architectural firm and Avery Brooks & Associates design firm from Las Vegas, and the Houston-based Manhattan Construction Company. Pinnacle has also reached out to the relevant governmental authorities for direction as to the type of reconstruction that will be recommended or permitted, such as whether the replacement casino facility should be land-based or built over water.
"The well-being of our employees and their families is a very high priority for us," stated Mr. Lee. "We intend to take the unusual measure of requiring our General Contractor for the rebuilding effort to give preference to our existing employees for all reconstruction jobs. Manhattan's management has indicated their enthusiasm in assisting us in this effort. While the architects and contractors are getting organized, we intend to arrange training programs where necessary for our employees to learn skills appropriate for the construction environment. For many of our employees willing to work with us to rebuild and reopen our Biloxi facility, we hope to provide continuation of employment and income throughout the reconstruction period."
Other Relief Efforts
Pinnacle's sister properties have also been asked to assist in the relief efforts. Truckloads of clothing, food, water and other supplies have already been sent from the Pinnacle properties in Bossier City and Lake Charles and will be distributed to Pinnacle employees in Biloxi and New Orleans. Similar efforts are being organized at the Company's Belterra property in Indiana and even at Boomtown Reno and the corporate headquarters in Las Vegas. Such relief supplies include both donations from Pinnacle itself and from Pinnacle employees.
Pinnacle is also making it easy for employees to make donations to the American Red Cross through a payroll deduction program, with such donations designated for Hurricane Katrina relief. Pinnacle will match dollar for dollar the first $300,000 of such donations. Pinnacle is also allowing its employees to donate accrued vacation time to the relief effort. The Company will make both a cash donation and the above matching donation to the American Red Cross equal to the value of any accrued "paid time off" that is donated by any Pinnacle employee.
Employees who have questions should contact the Company's representatives via the Pinnacle Employee Hotline at 1-800-665-8738.
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