Election Section

Documents Spell Out Plans |For Two East Bay Casinos: By RICHARD BRENNEMAN

Friday August 27, 2004

With the release of two key casino proposals over the past week, East Bay residents can form a clearer picture of the scope, costs and potential impacts of the major Native American gambling resorts that tribes and well-connected developers want to bring to the area. 

What follows is an overview of a developer’s proposal for a major resort/casino/shopping complex at Point Molate in Richmond and the agreement Gov. Arnold Schwarzenegger signed with the Lytton Band of the Pomo Tribe to expand their operations at their card club in San Pablo.  


Point Molate Contract 

Berkeley developer James D. Levine’s Point Molate proposal calls for a $1 million payment to the city for rights to purchase and lease the land until Jan. 15, 2006, and the same amount for every year the city extends the agreement until a final sale is approved. 

When the sale goes through, Upstream, Levine’s company, would provide an initial payment of $20 million—minus amounts paid out previously to hold the land—and submit a $30 million promissory note payable at $2 million a year. 

Once the deal closes, Upstream would transfer its rights to the Guidiville Band of the Pomo Tribe, and the property would become a federal reservation if approved by the Bureau of Indian Affairs. 

While the tribe is not bound by city codes and the California Environmental Quality Act (CEQA), before transfer to the Guidivilles Upstream would submit plans to the city for building, planning and environmental review. 

The accord calls for preserving “a reasonable amount of the natural and scenic qualities”—at least 100 acres, most set aside for wildlife protection—and preserving the landmarked 220,000-square-foot Winehaven building, which would become the casino. 

The project would include 150,000 square feet of showroom and conference space, 1,100 hotel rooms and 300,000 square feet of retail space 

Should legal or economic realities bar tribal gambling on the site, Levine would have the right to consider other uses for the site and submit an amended agreement. 

While law enforcement would fall primarily under the jurisdiction of tribal police and ambulance service would be provided by the tribe through a private firm, fire services would be provided by the city, with the tribe building a fire station on site and providing all necessary equipment. The agreement calls for one city fire captain and three firefighters per shift to be paid for by the city. 

The tribe would cover the costs of city emergency service staff required for special events staged at the site. 

As compensation for city services the tribe has agreed to pay the city an additional $8 million a year for the first eight years after gambling operations commence and $10 million annually thereafter. 

On areas controlled by the tribe or casino manager, the tribe would pay the city $10 per day per hotel room in lieu of occupancy tax, up to $5.25 per square foot of retail sales space per year to cover lost sales tax revenues and an additional annual fee based on construction costs. 

For areas not under direct tribal or casino control, the hotel fees would be $7 a day and the retail space surcharge would be up to $7.50 per square foot to cover lost sales tax revenue. 


Lytton Agreement  

Schwarzenegger’s pact with the Lytton Band of the Pomos, along with four similar agreements he signed with other tribes Monday, is posted on the chief executive’s website. 

Casino San Pablo has already received federal recognition as a Lytton reservation, but needs state approval to expand the operation to a full scale casino. 

The compact, which runs through Dec. 31, 2025, allows the tribe to install the card and machine games normally found in Nevada casinos while barring roulette and dice games, a statewide rule. The agreement also allows the tribe to negotiate a separate compact allowing off-track betting on horse races—which would put the San Pablo casino into direct conflict with Golden Gate Fields. 

The 2,500-machine limit applies only until Jan. 1, 2008, when the tribe would be allowed to renegotiate the number “based on market conditions and the off-reservation effects” of the casino on the surrounding community. 

The quid pro quo is a guaranteed quarterly payment to the state of one in every four dollars the operators win, with the numbers verified by an independent auditor. 

The key selling point for the tribe—a ban on all other casino-style gambling, tribal or non-tribal, within 35 miles of the San Pablo casino—remains intact, and the accord gives the tribe the right to enjoin any casinos a governor might authorize. 

If another governor-approved casino opens nonetheless, the tribe can stop all payments until the other operation ceases or agrees to share its revenues with the Lyttons. 

The agreement also allows the tribe to cancel the pact if Proposition 68 passes in November, and full-scale non-Indian casinos are allowed. The tribe could also continue the agreement, but stop paying its 25 percent win share to the state.  

The Lyttons also agreed to pay $3 million into a fund to be shared out among non-gambling tribes. 

Schwarzenegger’s pact requires the Lyttons to prepare a tribal environmental impact report detailing the casino’s impacts. The tribe would then negotiate mitigations of off-reservation impacts with the city and county, agreeing to reimburse local agencies for police, fire and other public services. 

The tribe also agreed to waive sovereign immunity and accept binding arbitration to insure that mitigations are fulfilled and to comply with San Pablo municipal building codes.