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Richmond Council Endorses Casino Plan For Point Molate Site: By RICHARD BRENNEMAN

Friday September 03, 2004

Faced with a court order blocking them from approving a lucrative Point Molate casino pact with a Berkeley developer, the Richmond City Council did the second-best thing Tuesday night: They voted unanimously to show their intent to sign the deal once legal clouds clear. 

ChevronTexaco, owners of the Bay Area’s largest refinery as well as all the land surrounding the site, had won a temporary restraining order Monday morning in Contra Costa County Superior Court blocking the sale pending a Sept. 20 hearing. 

The council session lasted over six hours, and featured Power Point presentations from a city-hired attorney, Berkeley developer James Levine and Gary W. Loveman, a former Harvard Business School professor turned president and CEO of Harrah’s Entertainment, the nation’s dominant gambling operator and designated Point Molate casino operator. 

The first word went to Assistant City Manager Richard McCoy, the city’s point man during negotiations on the casino deal.  

McCoy said the city’s goals included: 

• Preservation of open space 

• Ensuring the project’s long-term economic viability 

• Maintaining public access and use of the shore and undeveloped areas of the site 

• Creating a regional attraction 

• Preservation of the historic structures on the site 

• Job creation 

• Minimizing environmental impacts 

• Provision of mixed uses, and 

• Generation of money for the city 


The Berkeley Developer 

Next up was James D. Levine, a Berkeley developer who founded Upstream Point Molate LLC to develop the waterfront project. Before venturing into the gambling world, he headed LFR Levine-Fricke, one of the country’s leading environmental cleanup firms. 

A skillful organizer with deep experience in negotiating with governments, Levine began by assuring councilmembers that he’d launched the casino proposal “to do something remarkable for the City of Richmond and its people.” 

To a city afflicted with monumental debt, serious crime and drug problems, and high unemployment rates in its African American community, he offered hope, thousands of jobs and a world class resort generating an endlessly flowing fountain of dollars for empty city coffers. 

Levine also announced that Richard Cohen, a former Republican governor of Maine and Secretary of Defense in the Clinton Administration before becoming a highly paid international consultant, has become a full partner in Upstream. 

Cohen’s roles include handling negotiations with the Navy, which is still cleaning up the site, and the Interior Department bureaucracy, which has final say on whether or not the Guidiville Rancheria band of Pomo tribespeople will be granted a reservation at Point Molate—the key step before a casino can open. 

When Levine said his discussions with the tribe “were not really about money but what we can do for the community,” a chorus of groans erupted from incredulous casino foes. 


The Gambling Baron 

Next up was Loveman, whose 15-state, 47,000-employee empire is about to gain another 50,000 workers and 28 casinos across the globe as it swallows Caesars Entertainment, the once-premiere gambling combine that began as a hot dog stand in Florida. 

Harrah’s revenues topped $5 billion last year, and Loveman predicted they’d double with the Caesars takeover. The firm is also the nation’s largest tribal casino manager, with operations in Arizona, North Carolina, Kansas and San Diego.  

Across the country, 28 million adults belong to the firm’s customer loyalty program, essentially a frequent gambler program, and Loveman said 2.6 million of them live within 150 miles of Point Molate, providing a solid customer base even before the doors open.  

In addition to a casino with 2,500 to 3,000 slot machines and 125 to 160 table games, Harrah’s would run its own 350-400 room hotel at Point Molate. Another hotelier and Upstream partner, Lowe’s Entertainment, will operate the remainder of the site’s 1,100 rooms. 

Many in the audience applauded when he finished his pitch, and Richmond Vice Mayor Richard L. Griffin offered special praise for Loveman’s accessibility during negotiations. “In my 25 years (of public service), we’re never before been able to meet with a CEO and discuss the plans in detail.” 

Next up were Guidiville Tribal Chair Merleen Sanchez and Michael Derry, CEO of Black Oak Development, the tribe’s corporate arm. 

After a brief introduction by Sanchez, Derry described the tribe’s history and the illegal termination of its reservation near Ukiah by the Department of the Interior four decades ago. Though its status was restored in 1991, the tribe remains landless. 

If the casino deal survives the legal and political processes, the once-landless tribe will become Richmond’s largest employer, Derry said.  


Red, Gold and Diamond 

Derry was followed by former Las Vegas Mayor Jan Laverty Jones, who appeared in a red mini-skirt and sporting Christian Dior pumps (the designer label prominent in rather large brass plates), and heavy gold jewelry—including a pricey necklace, a ring dominated by a three-carat or so canary yellow diamond and a gaudy Chanel pin with gold tassels. 

Jones—who ran a car dealership before her entry into politics—became the subject of no less than eight ethics hearings (none sustained) during her reign as Sin City’s chief executive. A prominent Democrat and friend of former President Bill Clinton, her political career ended with a failed gubernatorial run, paving the way for the current mayor, former mob lawyer Oscar Goodman. 

Today she’s a senior vice president of Harrah’s in charge of communications and travels the country helping Harrah’s sell its gaming proposals to legislatures and city councils, as well as campaigning against increased gambling. 


The Well-Connected Lawyer 

Last to speak before the meeting was thrown open to the 67 people who’d signed up for the public comment period was John Knox, a partner with Orrick, Herrington & Sutcliffe, a powerfully connected law firm that specializes in representing government agencies in bond issues and other complex financial negotiations. 

A Sept. 6, 2002 feature in New York Lawyer, headlined “Firm Cashes In On Relationships With Politicos,” detailed Orrick, Herrington & Sutcliffe’s substantial campaign contributions, and the substantial fees it earned—such as $147,000 from Pittsburg during the 2001-2000 California legislative session. 

The son of a legendary figure in California Democratic politics, former Assembly floor leader of the same name, Knox served as the Richmond’s hired gun during pact negotiations. His Power Point presentation was heavy on text and bullet points (unlike those of Levine and Loveman, who alternated flashier graphics with their own bullet points.) 

Knox carefully pointed out that while the accord says the tribe must submit their designs to the city for review, they alone have the final say on whether they heed whatever the city proposes. The city also has to pay for site maintenance, which currently runs about $500,000 a year, half of Upstream’s million-dollar-a-year option fee. 

Then it was time for the public. 


The Boosters 

While the strongest support came from organized labor and Richmond’s job-starved African American community, many speakers favored the casino as a much-needed jolt to jump-start the city into prosperity. 

While Rev. Andre Shumake of the North Richmond Missionary Baptist Church acknowledged that he didn’t like gambling, he said that in a neighborhood where community centers had closed and people are “still reeling from the shooting death of (athlete) Terrence Kelly and the fact that a 15-year-old resident is accused of the crime. . .we can’t afford the luxury of principle when our young men and women are dying on the street.” 

Marshall Walk III turned in signatures he’d collected in support of the casino from 500 youths he had approached on Cutting Boulevard. 

Labor proponents included officers of the AFL-CIO of Contra Costa County, the Richmond Police Management Association, the building trades unions, and Jim Russey, the well connected political powerhouse from Firefighters Local 188. 

Bonnie Daily, a 28-year resident, seemed to endorse the project partly as an act of protest again ChevronTexaco. Daily blasted the project’s courtroom opponent and the city’s largest source of jobs as “a bully in this town for a long time. The concerns they have expressed have been fabricated.” 

City Council candidate Kathy “Storm” Scharff waxed rhapsodic, praising Levine’s plan as “a gift from heaven” to a debt-plagued city that “could make us the Monte Carlo by the Bay.” 

“We cannot lose with it,” she declared. 

African American council candidate Tony Thurman called the proposal “a critical opportunity for the City of Richmond”—most notably, jobs for his would-be constituents. 

But Thurman added a word of caution, calling for the creation of an official commission, “a community accountability group to make sure the agreement is properly implemented.” 


The Opposition  

A third council candidate, Gayle McLaughlin of the Richmond Progressive Alliance, made her position clear the moment she walked up to the microphone. 

“Gambling has a history of destroying societies,” she said. “Gambling does not create wealth, it merely redistributes it—mostly from the have-nots to the haves. You’re gambling with the future of our community and you have no right to do that.” 

McLaughlin also scorned ChevronTexaco’s offer of $34 million as “a disingenuous act from an arm of the war machine.” 

Opposition largely derived from a combination of moral and environmental concerns, as well as McLaughlin’s cynicism about the notion of corporate benevolence. 

Charles Smith called Tuesday night’s gathering a “sham meeting” from a short-sighted opportunistic government.” 

Several faces were familiar from the oil firm’s carefully staged Aug. 13 outdoor press conference, where the counter-offer was first floated: Norman La Force appeared for the Sierra Club, Arthur Feinstein for the Golden Gate Audubon Society, Robert Cheasty of Citizens for the East Shore State Park and Save the Bay co-founder Sylvia McLaughlin. 

Richmond resident Soula Culver, daughter of a Native American father and an outspoken environmentalist, said “it’s a shame that the only way a Native American can make money is to hook up with ripoff artists” and blasted the casino agreement as “a deal city hall crafted behind closed doors with an out-of-town developer.” 

Dean O’Hair, spokesman for Richmond’s ChevronTexaco refinery, detailed the firm’s opposition, beginning the claim cited in their successful plea for the Temporary Restraining Order blocking the sale; namely that Richmond’s pact violated California law requiring that government-owned property must first be offered to other public agencies before it can be sold to private parties. 

O’Hair also charged that the pact doesn’t require Upstream to build anything, nor does it mandate that they hire and train a workforce from the local community—only that they expend “reasonable effort” to do so. 


The Non-Deal Deal 

When the last speaker left the podium at 11:46 p.m., the council voted to extend the meeting until 12:30, then retired behind closed doors to work on the legal wording of a resolution from Councilmember Nathaniel Bates. 

When they reassembled in Council Chambers a 12:16, Interim City Attorney Everett Jenkins read the final result, spelling out the council’s intent to sign the agreement whenever the court gives its approval. 

New language promised that the citizens of surrounding communities will “strongly benefit” from construction and ongoing jobs at the resort complex. 

The language also pave the way for the city to “conduct negotiations in conformity with the (state) Surplus Property Act” should the judge agree with ChevronTexaco. 

New language was inserted promising permanent public access to the 150 acres of open space and shoreline on the property. 

Insisting on being heard over the initial objections of Mayor Irma L. Anderson, Councilmember Tom Butt sought confirmation that the agreement would obligate the council to offer the land under the Surplus Property Act, and that the resolution didn’t vest any legal rights with the developer. 

On receiving reassurance from Jenkins, Butt joined his fellow councilmembers in a unanimous vote.?