|Media Coverage of Point Molate
Decision - ChevronTexaco Hires Willie Brown to Undo the Deal
November 11, 2004
Posted on Thu, Nov. 11, 2004
It's a tantalizing concept. California's second urban casino nestled into a plush hotel resort populated by gamblers debarking endless ferry runs across the Bay.
But the vision of a major casino in Richmond throwing off jobs and cash like a spinning top faces such regulatory obstacles that some experts give even odds on whether such a project can ever happen.
That's the gamble Richmond took this week when the City Council opted for a casino complex at Point Molate over a proposal by neighboring ChevronTexaco to maintain the land as a security buffer and infuse city coffers with $50 million in quick cash.
Upstream Point Molate LLC, which is working with Harrah's and the Guidiville Band of Pomo Indians on a hotel-casino resort, promised the fiscally strapped city tens of millions in revenues over coming decades plus thousands of construction and long-term jobs.
But before customers can ante up, Upstream has to clear a series of federal then state bureaucratic checkpoints, not the least of which is having Point Molate taken into federal trust as an American Indian reservation.
Then the group needs a gaming compact with Gov. Arnold Schwarzenegger, whose proposed agreement for Casino San Pablo includes a 35-mile gaming monopoly. The Legislature has yet to approve the agreement.
"They have a long road to travel and many cliffs off which they could fall," said attorney George Forman, whose firm specializes in tribal law.
If the casino idea falls apart, Upstream has an Option B: a mixed-use complex that includes 800 housing units, a 400-room hotel and scaled-back elements of the original development.
"Either way, the residents win," said Councilwoman Mindell Penn.
Upstream is preparing federal and state environmental review applications. Upstream principal Jim Levine said the firm has answers for the likely questions, including a wider access road to address traffic problems.
"Let's just say the (Bureau of Indian Affairs) has a lot of experience dealing with these issues," Levine said. "The initial responses from the BIA leave us very encouraged. They can see this is a real reservation, not just a postage stamp hotel-casino in the middle of a city. There's a lot of open space. That seems to be resonating with them."
Levine predicted area legislators, who can throw a wrench into the regulatory works, will be impressed by the "tremendous social benefits for the region" that restored ferry service between San Francisco and Richmond will bring.
While the governor wants no casino within 35 miles of another, that rule cannot be applied to tribes like the Guidiville Band, which has a federal court order in effect to restore its lands.
If all goes well, the process still will take two to five years, Levine said.
"That assumes there is no litigation," lawyer Forman said. "If there is, you can throw that calendar right out the window. If you're looking for ways to attack a city council, there are (environmental) issues, or the (Department of) Interior, all kinds of federal issues."
In addition, legislators hostile to gaming have a voice in the federal process, which involves an act of Congress.
Upstream wooed the Richmond community Tuesday with a free rib dinner that drew more than 100 people, including police, firefighters and ministers.
"We've been very open about building relationships with community and church leaders," Levine said. "That's really paid off. As a result we will have more success in local hiring."
It took more than free barbecue to woo the council, however. For them, Upstream agreed to boost its nonrefundable deposit to $15 million from $5 million.
"I came up with a proposal to triple their deposit," said Councilman Tom Butt. "We could go down the road for five years, with them paying just enough to maintain the land, then end up with nothing -- no jobs, no parks, nothing."
The sight of spinning cherries and big jackpots in Richmond may still be years away, but a casino developer is forging ahead with plans to bring Indian gaming to the shores of Point Molate now that the City Council has approved the proposal.
But no one expects Chevron, which opposes the casino proposal and made an $83 million bid for the land, to surrender just yet.
The refinery has hired former San Francisco Mayor Willie Brown to lobby the City Council, and city insiders say Chevron may put the issue to a public vote in March.
The City Council voted 6-2 late Tuesday to sell the former naval fuel depot to Upstream Development and its partner Harrah's for $50 million. Council members Maria Viramontes and Charles Belcher opposed the deal; Mayor Irma Anderson abstained.
Within hours of the vote, Jim Levine, head of Upstream, said he was preparing to start the application process to turn the property into a reservation for the Guidiville Band of Pomo Indians, which hopes to open a casino with a resort hotel and shopping center.
"The process will be formally kicked off in the next 60 days or so," he said Wednesday.
The next step is an environmental impact study of the proposal, a process that involves lengthy hearings where the city and the federal Bureau of Indian Affairs would hear public comment.
The proposal still faces significant governmental hurdles and ultimately requires approval by the U.S. secretary of the Interior, a process that typically takes years.
Clay Gregory, director of the Bureau of Indian Affairs' Sacramento office, said the Point Molate proposal had yet to cross the agency's radar.
"To the best of my knowledge we haven't been contacted by the tribe on this," he said Wednesday.
The Richmond City Council has final say over the project's design and scope, "even whether there will be a casino or not," Levine said.
If the casino deal is not approved, the developer plans to build 800 condominium units and the resort complex.
Richmond will see its first $1 million check within 21 days, but city officials say the money has largely been spent on legal fees and maintenance costs for Point Molate.
Over the next five years, the city could receive as much as $15 million. Upon the close of escrow, the city will have received a total of $20 million in cash and a $30 million promissory note to be paid over 15 years.
Chevron spokesman Dean O'Hair said he was disappointed by the city's approval of the casino. The company has long said a casino would threaten the security of the refinery it operates adjacent to Point Molate.
"Now, we've got to go back and just kind of think about where we are and consider a range of options for what's next," he said.
Emblematic of the high-stakes public relations campaign waged by both sides to win over public opinion, O'Hair said Brown -- who served 14 1/2 years as speaker of the state Assembly -- works as a consultant for Chevron, and "the mayor has helped us ... presenting some of the concerns that we've raised."
Brown did not return calls Wednesday. But Councilman Nat Bates said he had recently received a phone call from Brown, who wanted to know how Bates would vote.
"Chevron just didn't utilize him the way he should have been utilized," Bates said of Brown. "He could have had some influence had he gotten involved earlier in the game. He's a lot more influential than the guys they used (early on)."
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Casino Plan Gets Key Approval in Richmond
Richmond is taking a gamble.
The city has sold a prime piece of waterfront property at Point Molate for $50 million to a developer with plans to build a casino and resort hotel. Slot machines in Richmond are now a real possibility.
The project, proposed on behalf of Pomo Indians, offers more than gambling. A city council member says the plan includes a park, trails, open space, jobs, and historic preservation. However, the casino is the big moneymaker.
"It may not be the perfect answer everybody would dream of," said council member Tom Butt. "But right now, it's the best answer we have."
Chevron, Point Molate's next door neighbor, had countered with its own bid to turn the former navy fuel station into open space, but some council members say it lacked important details. So the sale to the casino developer was approved.
The city does reap some additional benefits from the sale. A council member says Richmond is guaranteed at least $7 million dollars each year for 20 years, and the city could sure use the money. Budget cuts have locked the doors on branch libraries and community recreation centers, closed fire stations one to two days a week, put city workers on unemployment, and left roads in disrepair. Though desperate to raise money, council member Maria Viramontes voted no.
"I just think for Richmond, this is about vision -- how do you see this city in 20 years," she said. "For me, I just don't see gaming as the main way for us to do economic development."
The casino still faces many legal obstacles. The developer's back-up plan is to build housing along with the resort should gambling go bust.
Richmond's City Council agreed Tuesday to sell Point Molate to a casino developer who wants to build a resort with Las Vegas-style gambling on San Francisco Bay.
The 6-2 vote, with Mayor Irma Anderson abstaining, came after several hours of heated public debate. More than 200 people attended the meeting, spilling into the aisles and sitting on the floors of Richmond's City Council chambers. Many wore "thumbs up" buttons on their lapels to show their support for building the casino at Point Molate.
The council vote means the city can sell 412 acres of city-owned waterfront property for $50 million to Upstream Development of Emeryville and its partner, Harrah's, which plan to build a casino with 3,000 slot machines and a hotel resort on the former naval fuel depot. Council members Charles Belcher and Maria Viramontes voted against the sale.
Oil giant Chevron had offered a competing proposal to buy the land and convert it to open space, but council members criticized the plan, saying it was not specific enough.
The council had put off voting on the Point Molate sale three times. Before the vote Tuesday, council members lashed out at Chevron.
"I'm really disappointed that this deal is not better organized," Viramontes said. "A lot of people believed Chevron was going to put forward a proposal people could take seriously. You put us in a situation where we have to vote 'no.' "
The plan to sell Point Molate to a casino developer had been met with strong opposition from gambling opponents and environmentalists, who formed an unlikely alliance with the refinery giant, which offered to buy the land for $83 million.
Chevron said it would write a $50 million check to the city as early as Dec. 23 and pay another $25 million over 25 years along with millions for job training, construction and maintenance of the park and money for a land-use plan.
But council members scolded Chevron for not being specific about how much land it would set aside for open space and what kinds of jobs it would offer the city.
City officials have said a casino could bring as many as 7,500 new jobs to Richmond, along with $15 million to $20 million annually in taxes and other revenue.
Upstream has offered $20 million up front, and officials said they would write a $30 million promissory note to be paid over 15 years.
The vote does not guarantee Richmond will hear the clang of jackpots anytime soon. Upstream's plans to build a casino on behalf of the landless Guidiville Band of Pomo Indians face many legal and governmental hurdles, including the complex federal process of turning the land into an Indian reservation.
The deal could be made moot if the state Legislature approves a pending compact with the Lytton Band of Pomo Indians that would bar slot machines within a 35-mile radius of the tribe's Casino San Pablo.
"Point Molate provides a once-in-a-generation opportunity to stimulate the economic base of the city of Richmond," said Jim Levine, head of Upstream.
Chevron operates the Bay Area's largest refinery adjacent to Point Molate and opposes a casino there on grounds that it would threaten the refinery's security.
Drawn by the promise of thousands of jobs and millions of dollars in continuing cash, Richmond's City Council has agreed to sell 354 waterfront acres at Point Molate for a resort casino.
The 6-2 vote came at about 11:30 p.m. Tuesday. Councilwoman Maria Viramontes and Councilman Charles Belcher opposed the motion; Mayor Irma Anderson abstained.
None of the City Council members voiced any concern that the Indian casino may not win required federal and state approval, though the site falls well within the 35-mile exclusive gaming zone Gov. Arnold Schwarzenegger wants to give to an expanded Casino San Pablo.
If the casino can't move forward, developer Upstream Point Molate proposed a back-up plan that includes 800 housing units with a smaller hotel and resort center.
Upstream, with its partners Harrah's and the Guidiville Band of Pomo Indians, plans to build a 1,100-room hotel, Indian casino and entertainment venue on the closed Point Molate Naval Fuel Depot just north of the Richmond-San Rafael Bridge.
The developer will pay $1 million within 21 days, $20 million at the close of escrow and another $30 million over 15 years. Upstream has estimated its project will generate 3,000 onsite jobs, 3,600 offsite jobs and 1,000 construction jobs.
Though ChevronTexaco owns all the land surrounding Point Molate, the company didn't offer any development proposal when the city first solicited business ideas.
In recent months, the company offered the city $50 million for the land with the intention of using the site as a regional park that would provide a security buffer for the company's nearby refinery.
When the city rebuffed the initial offer, Chevron sued to stop a sale to Upstream.
Council members took turns Tuesday night grilling Chevron representatives on their plan, which seemed comparatively short on details.
Much of the council's ire was focused on the tardiness of Chevron's interest.
Unlike Upstream's proposal, Chevron promised immediate cash for the fiscally struggling city but no long-term revenue stream. Chevron planned to pay Richmond $5 million immediately for a jobs program and $50 million by Dec. 23.