Richmond officials divided over whether to extend closing date for casino deal

By Katherine Tam Contra Costa Times Posted: 01/06/2010

Richmond city leaders struggled and eventually failed to reach agreement Tuesday night on whether to extend the closing date on a deal with the developer seeking to open a hotel-casino resort on the waterfront.

While some said an extension would allow time to finish negotiating key details and avoid a possible lawsuit, Mayor Gayle McLaughlin argued that the original Jan. 15 deadline should stand.

Upstream Point Molate LLC and the Guidiville Band of Pomo Indians want to build a resort that would include a 240,000-square-foot casino with 124,000 square feet of gaming, a conference center, nearly 1,100 hotel rooms, restaurants, shops, tribal headquarters and a shoreline park and trail.

At issue Tuesday night was the 2004 deal in which the city agreed to sell the abandoned Point Molate Naval Fuel Depot to Upstream for $50 million. Part of that has been paid; the developer is to provide the remaining $35 million by the closing date.

City officials and the developer have been negotiating for weeks over several issues, including who Upstream has as a financing partner for the $1.2 billion project and how much say the city should have over how the resort would look.

Despite two motions, the City Council was unable to reach a majority vote Tuesday on extending the closing date to at least Feb. 15.

The city and developer, interpreting the 2004 deal differently, disagree about whether a lawsuit filed by project opponents Citizens for
 

East Shore Parks automatically delays the closing date for the land sale. Councilwoman Maria Viramontes said granting an extension would take care of that disagreement and prevent it from escalating into a court challenge.

"Let's not go into another lawsuit. Let's give the extension," said Viramontes, who voted against the 2004 agreement but has said she's willing to consider the current project.

McLaughlin, who opposes a casino, objected to an extension. She said Upstream has failed to provide required letters showing it is financially capable of moving the project forward, a statement some disputed. Upstream should submit its financial plan as required on the closing date or be in violation of it, McLaughlin added.

Several public speakers agreed and voiced doubts that Upstream can deliver what it promises.

"It's a case of smoke and mirrors," resident Tarnell Abbott said.

Jim Levine of Upstream did not attend Tuesday's meeting.

Supporters argued that the resort is the first project to be proposed for Point Molate that would generate thousands of jobs.

"We are starving for jobs," said Aram Hodess, business manager for Plumbers and Steamfitters Local Union 159. "A $1.2 billion project shouldn't be sneered at."

Two council members — Ludmyrna Lopez and Jeff Ritterman — were absent Tuesday, leaving five at the dais. Four votes are required for approval. At least one council member hinted at possibly calling a special meeting when the full council is present to weigh the issue again before the Jan. 15 deadline.

Council likely moving forward on alcohol fee, Point Molate still up in the air

http://richmondconfidential.org Jan. 6, 2010 Fernando Gallo |

The first city council meeting of 2010 saw several items stricken from the agenda or pushed back to later dates, but Tuesday’s meeting was anything but dull. As has become nearly customary at council meetings, the proposed casino at Point Molate was a hot topic of discussion. The banter between council members became so lively that three of the five present members threatened to leave before the meeting was adjourned, and all within a 10 minute span.

“It’s just kind of business as usual,” said councilmember Tom Butt. “It’s what we do here.”

The Point Molate saga took another turn at the meeting, when a frustrated Butt declared that he was no longer in support of the development. Once one of its most vocal proponents on the council, Butt said the development has too many problems.

“I‘m just sort of tired of bumping my head against the wall,” Butt said. “It’s a lot easier for me to just bail out and say, ‘look, I’m just going to oppose it, period.’”

The meeting was one of the shortest in recent memory for the council, adjourning in less than three-and-a-half hours, but some controversial issues were discussed and met with much commentary from the public. Aside from the always contentious Point Molate debate, a new ordinance that would impose a fee on businesses that sell alcohol was again put before the council.

Upon implementation, the $950 fee would pay for inspections of businesses that sell alcohol to ensure they are not violating city ordinances, as well as an expanded decoy program that would expose vendors who sell alcohol or cigarettes to underage customers.

Members of local alcohol awareness groups spoke out in favor of the measure, including Julie Waters of the West County Alcohol Policy Working Group. She alleged that not a single one of the 137 businesses that sell alcohol in Richmond were in compliance with city ordinances, which necessitated the new ordinance.

“The system is not working,” Waters said. “This is honestly the only measure I can see that would change the atmosphere of Richmond and improve crime subsequently.”

But speakers representing local businesses questioned the fairness of the ordinance. Hamid Amini, owner of Amini’s by the Bay, argued that the fee penalized businesses that were following the rules because of “a couple of bad apples.”

“I‘ve been over there for 20 years and I‘ve never sold a cigarette to a minor, or alcohol to any minors,” Amini said. “The economy is really bad, we are all suffering. We cannot afford to pay the $950 extra.”

Councilmembers Butt and Nathaniel Bates also voiced concerns about the measure, but their problems were with the inspections that would be conducted. The ordinance would ensure that every business received at least one inspection within three years, which Butt said was too long of a timeframe.

“I don’t think it’s enough,” Butt said. “It’s a very, very weak ordinance.”

Bates advocated that the ordinance be revisited in future years, so that businesses that follow the rules may be exempt from future fees.

A consensus could not be reached among the council regarding the framework of the ordinance, but every councilmember agreed that the ordinance was needed.

“It’s clear we’ve had a lot of problems with liquor stores in Richmond,” said councilmember Jim Rogers.

Changes to the ordinance will be implemented by staff, and a revised ordinance will be presented at a future council meeting.

The Point Molate debate that stirred up so much commotion began with a motion to allow the developer of the Point Molate project, Upstream Point Molate LLC, a two-month extension to close the purchase, sale and lease of the land involved.

Councilmember Maria Viramontes advocated approving the extension, arguing that denying it would simply result in a lawsuit by Upstream. But other council members were concerned with what they said were acts of noncompliance on the part of Upstream. Upstream has failed to deliver biannual letters to the city divulging financial information, despite the fact that the land development agreement requires them, which Butt took issue with.

Viramontes heavily criticized Butt’s opposition and interrupted both Butt and Mayor Gayle McLaughlin during the discussion, which drew catcalls and outbursts from the audience.

Ultimately, the extension was denied by the council.

A follow-up motion to direct city staff to research the design of destination resorts, in order to have more expertise in that area, was also voted against by the council. It was during this debate that Butt announced his reversal on the Point Molate development.

“From now on, I will not be supporting this project under any circumstances,” Butt said. “I don’t think that we know enough about it, I don’t think our staff is willing to find out enough information about it, I don’t think our city council wants to know about it, and I can’t live with it anymore.”

His comments drew the ire of Bates, who accused Butt of having that position “from the get-go.”

“You’re the kind of person that, unless you get your way on everything, that you‘re opposed to it,” Bates said. “You’ve done it on project after project.”

He was subsequently chastised by McLaughlin, who said his comments were “out of character of this discussion”

Bates then announced he was feeling ill and would leave the meeting early, which prompted Butt to make a similar proclamation. Both would end up staying, although minutes later Viramontes nearly excused herself as well, also as a result of illness.

“This is becoming the most dysfunctional city council in the history that I have been associated with,” Bates said during the meeting.

Butt denied that there was any real hostility amongst the council.

“It’s just political posturing,” he said.

The next regular city council meeting is scheduled for Jan. 19.