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  Sacramento Bee - Tribe's East Bay Casino Plan Tests California, U.S. Policies
July 15, 2010

By Peter Hecht phecht@sacbee.com Jul. 14, 2010
POINT MOLATE – On an alluring waterfront where golden bluffs and eucalyptus share space with an abandoned winery and the toxic remnants of a World War II naval fueling station, Donald Duncan sees the past and future of his tiny California tribe.
Developers and investors see an Emerald City for California casino development – a shimmering gambling resort with two hotels, bay views, nature trails and ferries that shuttle tourists across the rippling waters from San Francisco.
The project, a proposed $1.2 billion redevelopment of the shuttered Point Molate Naval Fuel Depot, is advancing on a promise of jobs and revitalization for the struggling city of Richmond.
It is also challenging a no-urban-casinos edict by Gov. Arnold Schwarzenegger and presenting a test for the Obama administration, which is reviewing policies for tribes seeking to win the rights to distant lands to build casinos.
The 112-member Guidiville Band of Pomo Indians, which is pushing to build the Richmond casino, lives more than 70 miles away in a cluster of federal housing in Ukiah. The tribe has no reservation but claims ties to the region, saying its ancestors traversed the San Francisco Bay before the Gold Rush and returned as maids and laborers in the 1960s.
"To some people, this is a gambling project," said tribal vice chairman Don Duncan. "To us, it is our land base – where we're going to have our housing, our dance houses, our culture."
Guidiville isn't the only Indian tribe looking to erect a gambling resort near San Francisco. The Scotts Valley Band of Pomo Indians, from Lake County, is seeking to build a $330 million casino near the Richmond Parkway in Contra Costa County. The Federated Indians of Graton Rancheria wants a casino just up Highway 101 near Rohnert Park.
In 2004, the Lytton Band of Pomo Indians famously signed an agreement with Gov. Arnold Schwarzenegger to build a casino – with 5,000 slot machines – along Interstate 80 in San Pablo. The deal collapsed amid political opposition to putting a casino in the Bay Area metropolis. The governor then declared he would allow no urban casinos on his watch.
But with an investors list that includes the Yocha Dehe Wintun Nation, operator of Yolo County's lucrative Cache Creek Casino, the Point Molate proposal underscores the continuing quest to tap into the San Francisco gambling market.
Richmond has been working for years to redevelop its former naval depot in hopes of building housing, a conference center, waterfront park and resort. A divided City Council in May voted to grant a one-year extension to a consortium promising a casino on the bay. Guidiville is pushing hard for federal approval to designate the site as its reservation.
Guidiville's partner in the casino effort is Upstream Investments LLC, a development group that won rights to build on the property.
Recently, John Salmon, an Upstream executive, walked a splintered fueling pier at the 415-acre former naval site. He offered a vision of trams zooming atop the pier to greet ferries carrying more than 5,000 people a day from San Francisco.
The developer described a casino resort of glistening new buildings, plus restaurants and gambling in a restored 1908 Rhineland-style castle that once housed a winery. He predicted a gambling mecca that will draw like no other.
"I start with the 16 million visitors to San Francisco a year," Salmon said. "We're 20 minutes from Pier 39 and the Ferry Building. And you've got 18 to 19 percent unemployment in a city that wants to develop federal land. Tell me what's wrong with that."
Cheryl Schmit, director of Stand Up for California, an anti-gambling watchdog group, says there is plenty wrong. She calls the plan a slap at voters who approved gambling on promises that casinos would be kept to tribal lands and out of California cities.
The Bureau of Indian Affairs and National Indian Gaming Commission are considering requests to take land into trust for the Guidiville band and eight other restored Indian tribes that were terminated by the government a generation ago.
Schmit said the Point Molate project could trigger "reservation-shopping" and tribes leapfrogging to build casinos in more desirable real estate.
"If it goes through at the federal level, it is a signal that projects miles away from former reservations can become a reality," she said.
In a June 18 memo, Interior Secretary Ken Salazar said the Obama administration is reviewing policies covering tribal applications for casino developments. "Decisions whether to take off-reservation land into trust for gaming purposes … can raise difficult and contentious questions," Salazar wrote.
A 2003 study commissioned by Richmond said a casino could create 4,462 jobs and $400 million to $450 million in gambling revenues. That was based on a casino with 2,000 slots – half of what is planned.
Richmond would receive $16 million a year under an agreement with the Guidiville tribe. So far, the tribe and investors have spent $16 million for options to purchase the $50 million Point Molate land and $14 million toward the casino.
Richmond City Council member Nathaniel Bates said he envisions cruise ships perched at Point Molate, transforming his town's economy. "It's what we should be all about – bringing in jobs," he said.
But the town is divided over bringing in gambling. Richmond Mayor Gayle McLaughlin – among the staunchest critics – blasted the casino at a recent conference as a "massive, off-reservation, Las Vegas style casino."
"Citizen opposition is massive," she said.
Schwarzenegger's office is asking the federal government to deny the tribe's request for the land.
If the federal government grants Guidiville's request, tribal CEO Michael Derry said Schwarzenegger – or the next California governor – is obligated to negotiate a gambling agreement.
And one way or another, there would be gambling at Point Molate.
Should the Legislature vote down a casino pact, Guidiville is prepared to follow the lead of the Lytton tribe and build a smaller gambling resort. Denied a "Class III" Nevada-style casino, Lytton built a 1,100 machine "Class II" facility in San Pablo with electronic bingo and other games that don't require state approval.
Derry said an agreement for a full-blown San Francisco Bay casino could be worth more than $100 million in revenue-sharing payments to California.
"It's in the state's interest to negotiate," he said.