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For the East Bay, a Year Of Urban Casino Plans By RICHARD BRENNEMAN

Tuesday December 28, 2004

Was 2004 the East Bay’s Year of the Casino? 

You bet.  

Hamstrung for decades by the devastating effects of Proposition 13, local governments throughout California have been tempted by the siren songs of the slot machine and blackjack table as a means of filling empty coffers and stemming hemorrhages of red ink. 

When the year began, the East Bay boasted no gambling facilities on recognized tribal lands owned by Native Americans. 

As the year draws to a close, the East Bay has one existing tribal casino in San Pablo—a card room with grand ambitions—and proposals for large-scale urban casinos have been floated for Oakland, Albany, Richmond and North Richmond, and the modest Casino San Pablo itself has the gubernatorial blessing to transform itself into a super casino. 

Gov. Arnold Schwarzenegger last week announced that he would refuse his blessings to all but the Casino San Pablo deal. 

East Bay Assemblymember Loni Hancock (D-Berkeley/Albany/Richmond), a leading opponent of urban casinos, called the governor’s statement “a step in the right direction.” 

“That means we can focus on San Pablo and try to find an equitable solution,” she said. 

Hancock has called a Jan. 22 hearing at Contra Costa College to examine “the whole strategy of gambling as an economic strategy for the state. We need to know who pays and who benefits.” 

Just what power anyone has to block tribal casinos remains an open question. 

Tribes that were federally recognized as of 1988 can build no more casinos because of federal legislation passed that year. But tribes that were stripped of their reservations in the 1950s and 1960s can establish new reservations and build casinos on them. 

It is these so-called “landless tribes” that gambling promoters have targeted. 

In a Dec. 20 letter to Contra Costa County Administrator John Sweeten, Schwarzenegger’s Legal Affairs Secretary Peter Siggins acknowledged that if tribes receive East Bay land as restored reservations, “the state would be required to negotiate compacts in good faith.” 

“Not only does the [g]overnor intend to honor the exclusivity of the [Casino San Pablo] compact, the [g]overnor’s (sic) is adamantly opposed to further development of any casinos in urban areas,” he wrote. 

One of the greatest beneficiaries of the casino boom could be Berkeley developer James D. Levine, whose grand super-resort proposal targets Point Molate on the Richmond shoreline. 

Levine has teamed with Harrah’s, the world’s largest casino operator, leading hotelier Lowe’s, former Defense Secretary William Cohen and the Guidiville Band of Pomo tribespeople to offer a Las Vegas-style super-resort at the foot of the Richmond-San Rafael Bridge. 

Richmond has endorsed Levine’s proposal and agreed to sell the land, the site of a former U.S. Navy refueling station, in a deal that could yield the city a fortune if the proposal manages to thread its way successfully through the federal bureaucracy. 

If approved, the resort would feature a massive casino installed in the landmarked Winehaven building, the site of California’s largest pre-Prohibition vintner, featuring 2,500 to 3,000 slot machines and 125 to 160 table games. 

In addition to running the casino, Harrah’s would operate its own 350-room hotel at Point Molate, with Lowe’s Entertainment running the remainder of the site’s 1,100 rooms. 

Under the terms of Levine’s deal with the city, no other tribe would be allowed within Richmond city limits if his project wins the requisite approvals. 

That would torpedo plans for a second casino proposed for a site adjacent to Hilltop Mall. But that Point Molate provison wouldn’t affect another nearby proposal, this one in unincorporated North Richmond, which is closer to winning the federal nod. 

The Scotts Valley Band of Pomos, backed by a Florida man who has emerged as a major player on the national tribal gambling scene, is already well advanced in its efforts to secure federal approval. 

The 225,000-square-foot casino building would include 2,000 slot machines, 71 table games and 16 Asian card games, a 1,500-seat showroom, plus a a 600-seat buffet, an entertainment lounge, a sports bar and a food court and restaurant. 

The largest of the casino proposals—one endorsed by Gov. Schwarzenegger—was for San Pablo, which would have transformed the existing facility into the largest casino west of the Mississippi, with 5,000 slot machines—two-thirds more than the largest Las Vegas casino. 

The compact was one of five negotiated by the governor’s staff last summer. 

The number of slots was halved after strong opposition from local legislators, with Assemblymember Hancock in the forefront  

The 9.53-acre San Pablo site is currently the only proposed casino locale already designated as a tribal reservation. The casino land was proclaimed a reservation of the Lytton Band of Pomos on June 29 by Aurene M. Martin, Principal Deputy Assistant Secretary for Indian Affairs. 

The Lytton casino would be run by the Wintun band of the Rumsey Tribe, which already runs the highly successful Cache Creek Casino Resort in western Yolo County. The third partner in operations is the Maloof family of Sacramento, which owns a 50-story casino resort in Las Vegas as well as the Sacramento Kings NBA team. 

Schwarzenegger endorsed the San Pablo casino in a deal which would give the facility a monopoly on casino gambling within a 35-mile radius of the giant in return for a promise to pay the state 25 percent of its earning yearly once it’s up and running. 

Because tribal lands are sovereign under federal law, states have no direct taxing authority over casinos, and the governor’s proposed monopoly could earn the state up to $200 million annually. 

The reduced number of slots means less money for the state, a sum that would be reduced still further if other casinos open within the designated turf. 

Whatever the final outcome of the other proposals, the earliest winners at San Pablo will be Sam Katz, a Republican stalwart thrice-rejected in runs for a term as Philadelphia mayor and found at fault in a civil fraud trial, and Roger Stone, a tribal gambling lobbyist and the longtime GOP operative who orchestrated the Republican protests, known as the “Brooks Brothers Riots,” that helped bring the 2000 presidential recount to a halt in Florida. 

Katz and Stone spearheaded the move to win the reservation status, helped in the end by former California Rep. George Miller, who inserted a provision initiating the declaration as a rider into a budget bill on the final day of the 2000 Congressional session. 

The duo stands to make millions when the casino is built. 

Hancock questions “the whole idea of a 2,500-slot casino blocks from I-80 and right next tot he only public emergency room within a 25-mile radius. It should still be open for negotiations, including mitigations to local communities.” 

None of the casino proposals has gone unchallenged, and the Point Molate proposal has been targeted by two separate pieces of litigation. 

The first, filed by oil giant ChevronTexaco in September, sought to block the sale on the grounds that city officials had failed to offer to sell the property to other public agencies before inking a deal with a private developer. That action was rejected by a Contra Costa County Superior Court on Sept. 24, paving the way for the sale four days later. 

Two more lawsuits were filed on Dec. 15 and 17 in an attempt to void the sale on the grounds that the city shouldn’t have sold the land without conducting an Environmental Impact Report. The plaintiffs, one the East Bay Regional Parks District and the other Citizens for the Eastshore State Park, want the majority of the site preserved as parkland. 

Yet another lawsuit doesn’t seek to void the sale but asks for a billion dollars in damages on the grounds that Levine’s Upstream Point Molate LLC and Harrah’s enticed the Guidivilles to breach an existing contract with NGV Ltd., a Florida-based partnership. 

NGV is a Florida limited partnership, with Noram-NGV LLC as the general partnership. Noram LLC is part of the multi-corporate empire which has evolved from North American Sports Management, which began as a sports talent management company. 

The interlocked corporations are the creations of Alan H. Ginsburg of Maitland, Fl., who has emerged as a major player in the Native American gambling boom, with casino ventures spanning the nation from the extreme Southeast to the far Northwest. 

After their deal with Guidivilles fell through, Noram created a new entity, Noram-Richmond LLC, inked a pact with the Scott’s Valley Pomo band, and purchased a 30-acre site between Parr Boulevard and Richmond Parkway in North Richmond, announcing plans for the Sugar Bowl Casino, a 225,000-square-foot, 2000-slot Las Vegas-style gambling palace. 

With the exception of Casino San Pablo, the Sugar Bowl proposal has advanced the furthest in the approval process. The federal Bureau of Indian Affairs has already conducted an environmental scoping procedure on the plan and is preparing an environmental impact proposal. Levine said a scoping session on the Molate proposal should be held within the next month or two. 

Noram is also the corporate sponsor of the East Bay’s newest casino proposal, a 2,000-slot, 100-table casino with a 1,000-seat auditorium and 200-room hotel on land adjacent to Oakland International Airport. 

Noram and its Oakland tribal partner, the Lower Lake Rancheria Koi Nation, a Pomo band, have promised city officials nearly $11 million to compensate for lost taxes, cover city services as well as fund a police administration and youth sports and gambling addiction programs. 

The Muwekma band of Ohlone tribespeople has contested the Oakland proposal on the grounds that the site in question was the traditional homeland of their people. 

Rumors of another East Bay tribal casino—this one at Albany’s Golden Gate Fields—surfaced as a result telephone polling calls made in early winter. 

The race track has been ailing for some time, and Magna Entertainment, the site’s Canadian owner, has also floated the possibility of an 800,000-square-foot regional shopping mall to be built by politically connected Los Angeles developer Rick J. Caruso.  

Magna has consistently declined to return calls about either proposal, though Magna was a major backer of a failed statewide ballot initiative last November that would have allowed existing horse racing tracks to add casinos to their facilities. 

Meanwhile, Hancock has issued a call for a state constitutional amendment that would impose a 60-day delay before legislators could vote on any new casino pacts.t