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Developer Wins Pact to Build Point Molate Casino

Friday November 12, 2004

Richmond City Councilmembers gave Berkeley developer James D. Levine the go-ahead Tuesday night for his plans to build a “world class” casino resort on the Point Molate shoreline. 

Six councilmembers voted to approve the plan from Levine’s Upstream Point Molate LLC, with two voting against and Mayor Irma Anderson abstaining. 

Though rival bidder ChevronTexaco offered more cash up front—$50 million on signing, compared to $20 million on close of escrow from Upstream—councilmembers said they were forced to reject the offer because the oil company failed to offer a proposal that included new jobs and ongoing economic development for the city.  

Interim City Manager Phil Batchelor placed the long-term value of the Upstream offer at over $350 million—assuming the tribe picked by the developer wins reservation status for the land and clears the federal and state gambling approval process. 

“I’m relieved,” said Levine after the vote. “It’s no fun being in a PR campaign against Chevron. But after all the ads, the truth came out about what the proposals really are.” Levine’s partners include Harrah’s Entertainment, the Cohen Group (headed by former Defense Secretary Richard Cohen) and the Guidivilles. 

“Obviously, we’re disappointed,” said ChevronTexaco spokesperson Dean O’Hair. “The council made the wrong decision. We’ll have to start thinking about the next step.” 

The oil company contends that Levine’s proposals would cause serious security problems for the refinery. 

Both bidders sweetened their offers during negotiations since the proposals last appeared before the council. Levine’s consortium added a backup plan to build 800 luxury condominiums should his plans for a tribal casino stumble. Upstream estimated the long-time income to the city from the housing alternative at $250 million, Batchelor said. 

The sense of urgency evident in the council’s push for a deal was spelled out in a memorandum Batchelor circulated before the meeting, citing the city’s “pressing need for cash to build, repair, and refurbish its assets.” 

The city manager cited the looming needs totaling nearly $356 million, including $209 million for roads, $50 million each for sewer repairs and earthquake retrofitting of city buildings, $21 million to restore the city’s depleted workers compensation reserves. 

Tuesday’s meeting drew a large crowd to City Council chambers, which were packed well beyond the “maximum capacity” limits posted on the walls. While standees were legally limited to 15, more than 75 people were crowded along the walls and in the back. 

When it came time for the public comments period, pro-casino speakers outnumbered Chevron supporters 22-6, with 8 speakers decrying both proposals. 

Labor unions were the biggest casino supporters, seeing a job bonanza in the four hotels, casino and upscale shopping plaza Levine proposes. The developer also worked Richmond’s African American churches, enlisting ministers and lay activists with promises of jobs for the young. 

Dennis Triplitt, regional real estate projects manager for the oil company, delivered a pre-signed copy of the ChevronTexaco’s proposal to City Clerk Diane Holmes. 

By guaranteeing that 75 percent of the site would be reserved for park and open space use—and providing additional space for the Bay Trail on land the firm owns adjacent to Point Molate—the oil company proposal was favored by the representatives of environmental groups who spoke at the meeting. 

The sticking point for many of the councilmembers, starting with Nathaniel Bates, was the lack of a clear plan for creating jobs and economic development, which is the mandatory use of former military bases deeded to local governments under the Base Closure and Realignment Act. 

The navy began a hazardous waste cleanup after closing its refueling base on the site. Land already deeded to the city has been restored to federal levels, and cleanup operations continue on the remainder of the land, which will be deeded to the city once the cleanup is complete. 

Triplitt acknowledged that he hadn’t been able to calculate jobs or economic benefit numbers. 

“I’m really disappointed this deal was not better tonight,” Councilmember Maria Viramontes told Triplitt. “A lot of people believed Chevron was going to put forward a proposal we could take seriously.” 

Mayor Irma Anderson said she liked the front money Chevron was offering, “but I do need some information on how we can develop jobs in perpetuity.” 

Levine had the numbers, starting with the promise of 6,600 jobs, a third of them hired from the local community, if the casino proposal clears all the bureaucratic hurdles—a process he said was a 75 percent probability and that would take from two-and-a-half to five years. 

While Gov. Arnold Schwarzenegger has signed an agreement that would give Casino San Pablo exclusive rights within a 35-mile radius, Levine said his proposal wouldn’t be affected because the Guidiville band of Pomo tribespeople has a court-approved right to claim land. 

Levine estimated that his casino would yield state government $100 million a year is revenues. 

He acknowledged there’d be fewer jobs if the casino plan failed. His condo alternative stood a 95 percent chance of success, he said, though there’d be fewer jobs with reduced retail space and hotel rooms slashed from 1,100 to 400 or so. 

“This is an enormous opportunity to get a permanent source of jobs,” said Councilmember Jim Rogers. “To get a long-term economic engine you have to sacrifice a little in the present to get the benefits in the future.” 

To critics who had urged him to delay the vote to win time for a better offer Councilmember Tom Butt said, “It’s time to act...I have begged and pleaded with (ChevronTexaco) to try to get them to give us a viable proposal. What they gave us is a proposal with two fluffy buns on either side of it, but it’s got no meat. 

“As far as I’m concerned, we have one proposal, and with the exception of the casino, it’s a good plan,” Butt said. 

“If we were looking for a quick fix, we would chose Chevron,” said Councilmember Mindell Lewis Penn. “Upstream offers us long term benefits that will affect the city for generations to come. Tonight is the night we have to either paint or get off the ladder. 

Councilmember Bates faulted Chevron for refusing to enter the bidding for Point Molate early on. “Upstream and Harrah’s have shown respect for this city,” he said, as well as the wealth to defend the city from any potential lawsuits the oil company may file to challenge Tuesday’s vote. 

“We do need money immediately,” said Mayor Anderson, “but I don’t agree with Chevron that they could give us a project without a sustainable economic development plan. The whole purpose of a reuse plan is to create an economic engine, and Chevron has not done that.” 

Anderson wanted to delay the vote, but her colleagues didn’t. 

Bell moved approval of the Upstream offer and Penn seconded. Belcher and Viramontes voted no; the mayor abstained. Bell, Penn, Butt, Bates, Griffin and Rogers carried the day.  

Gayle McLaughlin, elected to the council last week and scheduled to take her seat in January, called the vote a mistake. 

“Both proposals were not in the public interest,” she said. “We’ll see if Chevron comes back and makes a counterattack.” 

McLaughlin said she favored keep 70 percent of the site as open space, “with the right kind of development for the other 30 percent, something environmentally friendly and socially friendly.”