Bay Area Casino Bid Probes Limits of Control
16 Jun, 2010
The push by the Guidiville Band of Pomo Indians to build a casino resort at the shuttered Point Molate Naval Fuel Depot is a development scheme that promises to ferry gamblers across the waters from San Francisco and open up perhaps California’s most lucrative gambling market.
The project, advanced last month by a divided city council in the Bay Area town of Richmond, presents a very real challenge to the Obama administration. Since last year, it has been reviewing its policy for off-reservation gambling.
The plan also tests the will of outgoing Governor Arnold Schwarzenegger, who has proclaimed that he will allow no urban casinos on his watch.
One of two separate tribal casino developments proposed for Richmond, the Point Molate project underscores an intense push to build gambling establishments near California’s major cities or along its heavily traveled freeways.
“The Bay Area market is a rich market that has 16 million to 17 million visitors a year, and we anticipate this will be a national draw,” said John F. Salmon, a partner in Upstream Investments LLC.
The Point Molate developer, the tribe and investors have spent $16m for options to purchase the $50m property and another $14m toward the casino project.
In 2004, Upstream responded to a request for proposals from economically depressed Richmond to conceive a project to build housing and a hotel, conference centre and resort on Point Molate.
Salmon said Upstream eventually found Harrah’s Casinos – which found an eager tribe, Guideville, for a waterfront casino development.
Harrah’s dropped out – replaced by another investor, the Yocha Dehe Wintun Nation. Its Cache Creek Casino near Sacramento is already a heavy draw for gamblers in cities east of San Francisco.
But the Richmond proposal is drawing criticism from some tribes that built casinos on remote Indian lands and now resent efforts by others to jump to more lucrative real estate.
“It’s off-site gambling that goes against the regulations,” said Morris Reid, tribal chairman of the Picayune Rancheria of Chukchansi Indians in California’s Central Valley. “Outside investors choose these sites and then go to the tribes to entice them to come down. They’re not really thinking about the existing tribes that have established gaming on their own Indian lands.”
The Picayune Rancheria, which operates a casino in the rural community of Coarsegold, is resisting development plans for a rival tribe, the North Fork Rancheria.
North Fork, supported by Las Vegas-based Station Casinos, wants to move 40 miles from its tribal lands to construct a $250m casino on well-traveled California Highway 99, north of Madera and near the entry route to Yosemite National Park.
The US Department of Interior and the National Indian Gaming Commission are reviewing bids by tribes such as North Fork and Guideville, which has tribal housing in the Mendocino County community of Ukiah, to take off-site land into trust for casinos.
Since last year, US Interior Secretary Ken Salazar and the Obama administration has been reviewing federal policy for tribes seeking off-site land for gambling. A decision is pending on the administration’s policy.
“They said last September it was imminent,” Mark Van Norman, NIGA’s executive director told the National Council of Legislators from Gaming States conference in Napa Valley on Friday. “It still hasn’t happened.”
Nancy Pierskalla, management analyst for the Bureau of Indian Affairs’ Office of Indian Gaming, said the administration is “trying to develop a policy for the off-reservation gaming as well as the restored lands” for tribes that were terminated and later re-established by the US government.
She said officials are considering factors including “the location of the tribe, the miles they’re located from their homelands, and how receptive the local communities are to the tribes seeking the gaming establishments.”
Attorney Scott Crowell, who represents the Guidiville Band, said federal delays in setting policy for tribes seeking to acquire land undermines tribal economic development.
“There is definitely a moratorium going on,” Crowell said. “We don’t understand it… They have a legal obligation to move forward.”
Michael Derry, chief executive of the Guidiville Band, rejects charges it is reservation-shopping in its pursuit of a Bay Area casino. Though its housing units are more than 70 miles from the proposed casino development, Derry said the tribe lacks a reservation and has no land to use for economic opportunity.
“First you have to have a reservation to go off reservation,” Derry said.
The Richmond City Council last month voted 4-2 to grant Upstream Investments an extension until April 2011 of its rights to develop the Pointe Molate property. The vote came as Upstream’s five-year exclusive option to build on the property was due to expire.
The city of Richmond stands to get $16m a year from the tribe if the casino development occurs. The $1.2bn project calls for a hotel-casino with 1,100 rooms, 4,000 slot machines, a conference centre and regional ferry station for Bay Area commuters, gamblers or not.
But the issue still divides residents and members the City Council.
“It’s a city of 103,000 residents, and we have this proposal… to bring a massive off-reservation, Las Vegas-style casino,” said Richmond Mayor Gayle McLaughlin, who opposes the project. She added: “Citizen opposition is massive.”
McLaughlin said the city, as well as Contra Costa County, which stands to get $20m a year from the development, felt pressure to sign agreements. She said they fear Guidiville will win approval to take the Pointe Molate land into trust.
Meanwhile, another major casino project for Richmond is clearing hurdles.
Last month, the California Supreme Court rejected legal challenges from community groups seeking to upset plans by the Scotts Valley Band of Pomo Indians to build a $330m casino near the Richmond Parkway, a key San Francisco commuter route. The Scotts Valley tribe is based in the small town of Lake Port in Lake County.
But Schwarzenegger is aggressively fighting casino intrusion into the Bay Area. In a letter to the BIA last October, Andrea Lynn Hoch, the governor’s legal affairs secretary, declared that the Point Molate project “violates Governor Schwarzenegger’s proclamation opposing urban casinos”.
The letter quoted 2005 US Senate testimony from Mark Macarro, chairman of the Pechanga Band of Luiseño Indians and a key proponent in 1998 and 2000 initiatives that legalised tribal gambling in California.
Macarro asserted that California tribes pledged that legal gambling “would not result in the proliferation of urban gaming, but would be confined to a tribe’s existing reservation lands”.
Yet Schwarzenegger has been contradictory on reservation-shopping.
In 2006, he signed compacts with tribes 700 miles apart to locate side-by-side casinos in Barstow along Interstate-15, the prime route carrying gamblers from Los Angeles to Las Vegas. The compacts died in the Legislature amid vehement opposition from wealthy Southern California tribes led by the San Manuel Band of Mission Indians.
In 2004, the governor backed a plan for the Lytton Band of Pomo Indians to build a casino with up to 5,000 slot machines in San Pablo near San Francisco. But he then issued his no urban casinos edict as the development drew vehement opposition from California political figures from Sacramento to Washington DC.
Lytton later developed a successful 1,100-machine Class II gambling facility in the city.
Class II machines, including electronic bingo and other games that mimic casino-style slots in appearance, don’t require state approval.
The Guidiville band and its developer say they are prepared to move forward – with or without the blessing of Schwarzenegger or the next California governor.
If the tribe wins federal approval to take land into trust but California won’t agree to compacts for Las Vegas-style games, Salmon said Upstream will “downsize a bit” to develop a sprawling Class II gambling resort on the waterfront.
If it chooses that course, Derry said, “The governor doesn’t have say.”
The project, advanced last month by a divided city council in the Bay Area town of Richmond, presents a very real challenge to the Obama administration. Since last year, it has been reviewing its policy for off-reservation gambling.
The plan also tests the will of outgoing Governor Arnold Schwarzenegger, who has proclaimed that he will allow no urban casinos on his watch.
One of two separate tribal casino developments proposed for Richmond, the Point Molate project underscores an intense push to build gambling establishments near California’s major cities or along its heavily traveled freeways.
“The Bay Area market is a rich market that has 16 million to 17 million visitors a year, and we anticipate this will be a national draw,” said John F. Salmon, a partner in Upstream Investments LLC.
The Point Molate developer, the tribe and investors have spent $16m for options to purchase the $50m property and another $14m toward the casino project.
In 2004, Upstream responded to a request for proposals from economically depressed Richmond to conceive a project to build housing and a hotel, conference centre and resort on Point Molate.
Salmon said Upstream eventually found Harrah’s Casinos – which found an eager tribe, Guideville, for a waterfront casino development.
Harrah’s dropped out – replaced by another investor, the Yocha Dehe Wintun Nation. Its Cache Creek Casino near Sacramento is already a heavy draw for gamblers in cities east of San Francisco.
But the Richmond proposal is drawing criticism from some tribes that built casinos on remote Indian lands and now resent efforts by others to jump to more lucrative real estate.
“It’s off-site gambling that goes against the regulations,” said Morris Reid, tribal chairman of the Picayune Rancheria of Chukchansi Indians in California’s Central Valley. “Outside investors choose these sites and then go to the tribes to entice them to come down. They’re not really thinking about the existing tribes that have established gaming on their own Indian lands.”
The Picayune Rancheria, which operates a casino in the rural community of Coarsegold, is resisting development plans for a rival tribe, the North Fork Rancheria.
North Fork, supported by Las Vegas-based Station Casinos, wants to move 40 miles from its tribal lands to construct a $250m casino on well-traveled California Highway 99, north of Madera and near the entry route to Yosemite National Park.
The US Department of Interior and the National Indian Gaming Commission are reviewing bids by tribes such as North Fork and Guideville, which has tribal housing in the Mendocino County community of Ukiah, to take off-site land into trust for casinos.
Since last year, US Interior Secretary Ken Salazar and the Obama administration has been reviewing federal policy for tribes seeking off-site land for gambling. A decision is pending on the administration’s policy.
“They said last September it was imminent,” Mark Van Norman, NIGA’s executive director told the National Council of Legislators from Gaming States conference in Napa Valley on Friday. “It still hasn’t happened.”
Nancy Pierskalla, management analyst for the Bureau of Indian Affairs’ Office of Indian Gaming, said the administration is “trying to develop a policy for the off-reservation gaming as well as the restored lands” for tribes that were terminated and later re-established by the US government.
She said officials are considering factors including “the location of the tribe, the miles they’re located from their homelands, and how receptive the local communities are to the tribes seeking the gaming establishments.”
Attorney Scott Crowell, who represents the Guidiville Band, said federal delays in setting policy for tribes seeking to acquire land undermines tribal economic development.
“There is definitely a moratorium going on,” Crowell said. “We don’t understand it… They have a legal obligation to move forward.”
Michael Derry, chief executive of the Guidiville Band, rejects charges it is reservation-shopping in its pursuit of a Bay Area casino. Though its housing units are more than 70 miles from the proposed casino development, Derry said the tribe lacks a reservation and has no land to use for economic opportunity.
“First you have to have a reservation to go off reservation,” Derry said.
The Richmond City Council last month voted 4-2 to grant Upstream Investments an extension until April 2011 of its rights to develop the Pointe Molate property. The vote came as Upstream’s five-year exclusive option to build on the property was due to expire.
The city of Richmond stands to get $16m a year from the tribe if the casino development occurs. The $1.2bn project calls for a hotel-casino with 1,100 rooms, 4,000 slot machines, a conference centre and regional ferry station for Bay Area commuters, gamblers or not.
But the issue still divides residents and members the City Council.
“It’s a city of 103,000 residents, and we have this proposal… to bring a massive off-reservation, Las Vegas-style casino,” said Richmond Mayor Gayle McLaughlin, who opposes the project. She added: “Citizen opposition is massive.”
McLaughlin said the city, as well as Contra Costa County, which stands to get $20m a year from the development, felt pressure to sign agreements. She said they fear Guidiville will win approval to take the Pointe Molate land into trust.
Meanwhile, another major casino project for Richmond is clearing hurdles.
Last month, the California Supreme Court rejected legal challenges from community groups seeking to upset plans by the Scotts Valley Band of Pomo Indians to build a $330m casino near the Richmond Parkway, a key San Francisco commuter route. The Scotts Valley tribe is based in the small town of Lake Port in Lake County.
But Schwarzenegger is aggressively fighting casino intrusion into the Bay Area. In a letter to the BIA last October, Andrea Lynn Hoch, the governor’s legal affairs secretary, declared that the Point Molate project “violates Governor Schwarzenegger’s proclamation opposing urban casinos”.
The letter quoted 2005 US Senate testimony from Mark Macarro, chairman of the Pechanga Band of Luiseño Indians and a key proponent in 1998 and 2000 initiatives that legalised tribal gambling in California.
Macarro asserted that California tribes pledged that legal gambling “would not result in the proliferation of urban gaming, but would be confined to a tribe’s existing reservation lands”.
Yet Schwarzenegger has been contradictory on reservation-shopping.
In 2006, he signed compacts with tribes 700 miles apart to locate side-by-side casinos in Barstow along Interstate-15, the prime route carrying gamblers from Los Angeles to Las Vegas. The compacts died in the Legislature amid vehement opposition from wealthy Southern California tribes led by the San Manuel Band of Mission Indians.
In 2004, the governor backed a plan for the Lytton Band of Pomo Indians to build a casino with up to 5,000 slot machines in San Pablo near San Francisco. But he then issued his no urban casinos edict as the development drew vehement opposition from California political figures from Sacramento to Washington DC.
Lytton later developed a successful 1,100-machine Class II gambling facility in the city.
Class II machines, including electronic bingo and other games that mimic casino-style slots in appearance, don’t require state approval.
The Guidiville band and its developer say they are prepared to move forward – with or without the blessing of Schwarzenegger or the next California governor.
If the tribe wins federal approval to take land into trust but California won’t agree to compacts for Las Vegas-style games, Salmon said Upstream will “downsize a bit” to develop a sprawling Class II gambling resort on the waterfront.
If it chooses that course, Derry said, “The governor doesn’t have say.”