San Pablo Fears Huge Loss Due to Point Molate Casino Competition

By Richard Brenneman
Thursday September 10, 2009 - 12:13:00 PM

Officials in San Pablo, long one of the East Bay’s poorest cities, fear their community could lose up to 42 percent of its municipal budget if the Point Molate casino resort is built, said City Manager Brock T. Arner. 

City councilmembers voted unanimously Sept. 8 to support a draft letter of opposition challenging the conclusions of the draft environmental review documents for the $1.5 billion casino resort. 

Backers of the proposed Point Molate resort have prepared a draft environmental review under both the California Environmental Quality Act (CEQA) and the National Environmental Protection Act (NEPA). 

Arner said the documents didn’t consider the impacts on San Pablo, which receives the largest share of its municipal revenues from the Lytton San Pablo Casino, which relies on fast-paced electronic bingo machines for most of its income. 

San Pablo officials fear the full-scope Las Vegas-style slot machines and games at the Richmond resort will lure many players away from the Lytton band’s casino. 

“We estimate that it could siphon off as much as $100 million a year,” Arner said, which would cost the city $7.5 million of its $18 million annual bonus. 

The impact would also cost the jobs of San Pablo residents who work at the local casino, he said. 

Arner said the city has a strong basis for its challenge. 

“Unlike CEQA, NEPA requires that the review take economic degradation into account,” Arner said. 

The San Pablo administrator also faulted the study’s analysis of traffic impacts, which he fears could be considerably worse than indicated in the joint federal and state document. 

“I also have questions about their business model. Does anyone really believe that their customer base will be visitors to San Francisco conventions who take the ferry over to Richmond?” 

Arner, the mayor and the deputy mayor will be drafting a final version of the letter, which he said should be ready to deliver by Monday. 

The Point Molate casino project, brainchild of Berkeley environmental consultant turned developer James Levine, is one of two projects that could affect the San Pablo casino’s revenue. 

Closer at hand is the proposed Sugar Bowl casino in unincorporated North Richmond. Though a draft environmental review was prepared for that project, a court decision has overturned its adoption by the Richmond City Council. 

One of the problems the court had with that project is that it would have a municipal services agreement with the city of Richmond, even though the casino is in an unincorporated area of Contra Costa County. 

Both San Pablo and Richmond have large populations at the lower end of the income scale, and each city has turned to casino revenue as a way of funding civic improvements and creating much-needed jobs. Both communities could find themselves seated at opposite tables before a judge unless the issues can be resolved. 

Before the Lytton Band of Pomos took over the former card room and turned it into the gambling venue it is today, city officials had pondered ending the community’s incorporation and handing jurisdiction over to the county because of what appeared to be insurmountable financial difficulties.