The play on Point Molate

By John Simerman
Contra Costa Times
Posted: 10/23/2010 12:00:00 AM PDT
Updated: 10/24/2010 06:52:56 AM PDT

Nearly lost amid the shouting of a high-volume campaign season, 42,000 Richmond voters may do more to change the region's environment than in any election in decades.
They will vote on a gambling resort, right on the Bay, with more slot machines than all the casinos on Lake Tahoe's south shore -- the first Vegas-style casino in a California urban area. And if its magnitude is not well understood, its origins are even less so.
The resort's journey to the ballot -- which, if voters agree, could prod federal approval -- is a seven-year saga with an uncommon cast, from a figure with alleged criminal ties who spurred a small band of American Indians to pursue casino riches, to a development team that includes a former U.S. senator and Clinton-era defense secretary, a major Chicago real estate financier and a former governor's land czar.
Along with the Guidiville Band of Pomo Indians, a tribe with 112 members and roots in Mendocino County, they've pushed ahead with the help of, among others, a former top aide to U.S. Sen. John McCain, and financing first from Harrah's and now from the tribe that runs Cache Creek Casino Resort in Yolo County.
It's a story of far-reaching influence and lavish promises: eight-figure payouts, a local jobs boon, historical preservation, the vow of a world-class "green" design -- all contingent on a high-roller haven at Point Molate, a jut of former Navy land near the foot of the Richmond-San Rafael Bridge.
The plan's fiercest critic is now a supporter. Contra Costa County last year swung a $12 million-a-year deal with the developer, then told federal officials it had come to embrace the tribe's historical claim to the land, a claim the county's hired expert had labeled "duplicitous and intellectually bankrupt."
Environmental groups inked a deal Tuesday with the developer worth at least $48 million, trading an end to litigation for the money to buy other shoreline land in the region.
Backers say years of litigation and talks with developer Upstream Point Molate and the tribe have only improved the casino resort plan and the local payoff, leaving critics on a wobbly anti-gambling stool. To opponents, the deals threaten to muffle legitimate concerns about traffic, crime, addiction and the fate of a rare slice of prime, scenic bayshore.
Measure U, an advisory vote on a casino at Point Molate, could weigh heavily. But the results of City Council and mayoral races may do more to settle the fate of the project, since a divided council must first agree to turn over the land to the tribe.
Moneyed opposition remains, in the form of three Bay Area card clubs and a Sacramento-area casino tribe -- competitors that could influence the local vote, but may hold little sway in Washington, where federal decision-makers who must agree on Guidiville's claim to the land.
The story reaches to the Capitol, but it begins and ends in Richmond, a city that bet big on the casino dream and, until lately, never wavered.
'Very welcoming'
The promise of a fiscal turbocharge from Indian gaming was swirling in 2003 when Richmond's then-city manager and public works director bellied up to a Palm Springs casino blackjack table and pushed out small stacks of $100 chips as a crowd formed. Isaiah Turner and Rich McCoy were among a group who were on a tour of Southern California casinos arranged by a hopeful developer.
By then, voters had endorsed tribal casinos through state Proposition 1A. The Lytton Band of Pomo Indians had won the rights to casino land in San Pablo through a congressional bill, although local political pressure would later limit the tribe to electronic bingo games.
Oakland's then-mayor, Jerry Brown, envisioned a casino at the old Oakland Army Base, and the potential of dozens of land-seeking tribes in California, and the Bay Area's thicket of tourists and Asian gamblers, enticed more investors.
While some communities -- such as Vallejo, Antioch and Concord -- balked, Richmond leaders were all ears when a consultant for a group of Florida investors proposed sites in the city on behalf of Guidiville and another tribe, the Scotts Valley Band of Pomo Indians.
"Very welcoming" said casino consultant Kevin Kean, describing city officials' reaction. He arranged the southern tour, which accomplished its goal.
"We came back with an education about it, enlightenment," said McCoy, now retired. "And yes, more enthusiasm."
The Florida investors had won over the two tribes through the work of Gary Fears, who already had developed an Illinois riverboat casino. That Florida group would run into trouble from federal and state authorities who questioned their associations and dealings. Federal gaming regulators nixed their deal with the Seminole tribe for a Florida casino, finding it granted them excessive profit. A report later commissioned by the Guidiville tribe concluded Fears "routinely associates with individuals who are involved in criminal activity, often including them in his business ventures." Fears did not return a reporter's phone calls seeking a comment.
Pushing Point Molate
But those issues had not unfolded back when Kean was wooing city officials.
A few months after the Palm Springs trip, the City Council commissioned a $100,000 study that estimated a half-billion dollars in annual city benefits from a casino.
The Scotts Valley band, with the Florida investors, offered $10 million to develop a casino at Richmond's Port Terminal No. 3. But the city had another idea: the 412 acres at Point Molate, which the Navy was urging the city to take over.
McCoy said recently that Turner and City Council members "had their minds focused on Point Molate" early on. The land includes the historic Winehaven district, once home to the country's largest winery before Point Molate became a World War II-era naval fuel depot.
The city was dragging its feet over the cost of cleaning up and maintaining the land, with its contaminated soil and groundwater. But within weeks of the Palm Springs trip, Point Molate moved to the front burner. Soon, the city had taken over 85 percent of the land; the Navy held onto 41 contaminated acres, pending federal cleanup requirements.
A casino there made sense, said Councilman Nat Bates: Congress had required economic development for reclaimed former military bases. Point Molate had toxic taint, crumbling infrastructure, a historic district in disrepair. It needed money. And, at the edge of a crime-ridden city of 103,000, it was relatively remote, set off by the bridge toll plaza, hemmed in by Chevron's property. That would deter crime, Bates argued.
The Florida investors weren't so enamored. Point Molate had a big problem: a bottleneck at its only road in and out, right by the toll plaza. A draft environmental report last year found the casino would create major bogs on both sides of the bridge that could not be readily solved.
"It'll be jammed," Kean said. "In my opinion, it couldn't handle that traffic."
Undeterred, the city began searching for a developer who could pull it off.
Project first, then tribe
In the summer of 2003, after a 45-member residents group called for a "new city neighborhood" at Point Molate, the council sought out developers and, from seven responses, chose to negotiate with Upstream, which had outlined a hotel-conference center and residential project.
Neither the city's request, nor Upstream's proposal, mentioned a casino. But the city "made it known we'd be receptive to having a casino come in," McCoy said. Added Upstream partner John Salmon: "If a city asks you as a developer to try to do something, you usually figure out how to do it."
It would be months before that idea reached the public. The city moved forward on the casino plan quietly to avoid a backlash from anti-gambling interests.
"We tried to keep it off that (City Council) floor as long as we could," McCoy said.
Upstream would choose a partner in Harrah's, which scouted Guidiville. The tribe quickly ditched the Florida investment group.
The wraps finally came off the bold project, which Upstream's managing partner, Jim Levine, would describe as "Ghirardelli Square times 10." Chevron, not eager to see a major development adjacent to the refinery, bid as much as $80 million for the land. But council members were dubious. Upstream offered the city $50 million for the land and close to $20 million a year when the casino starts up. Top Harrah's officials showed up, and council members were clearly impressed by the team -- a partnership with deep connections in Washington and Sacramento.
"There was no wavering or hesitation," said Bates, 79, who led a pro-development majority that has softened.
The vote to move forward was unanimous.
The players
The Upstream frontmen were Levine and Salmon, who had worked together on several land-reclamation projects. Levine, 56, the blunt-speaking pitchman, co-founded Emeryville-based environmental abatement firm LFR Levine-Fricke, and he met Salmon in the 1980s when they joined to clean up a Superfund site at Point Isabel in Richmond that became state parkland.
Back then, Salmon, 65, headed development and sales for one of the largest landowners in California, Santa Fe Pacific Realty, which later became Catellus. He would later head up then-Gov. Pete Wilson's office of asset management and advised Wilson on base reuse.
The casino resort venture also includes a Chicago real estate financier, Steven Bandolik, whom Salmon had worked with in the past. Levine said it was Bandolik who introduced them to their most formidable, but least visible, partner: William Cohen, a former secretary of defense, who earlier, as a U.S. senator from Maine, headed the Senate Indian Affairs Committee.
"If you want to label them, Bandolik is money, Levine is environmental, I'm state, and Cohen is federal," said Salmon, 65.
Cohen declined through an assistant to be interviewed, and Levine and Salmon refuse to specify his role, saying only that he is a partner and helped them navigate the Navy bureaucracy. How Cohen may have used his influence to help the casino project in the Senate committee, or with the Department of Interior, where key decisions on the tribe's bid are pending, remains unclear.
"With a guy like that, you don't really have to ask him what he can do," Levine said.
Tribal members, including Guidiville's chairwoman for more than a decade, Merlene Sanchez, 66, occasionally show up at hearings but rarely speak. Instead, Michael Derry, CEO of the tribe's economic development arm, represents the tribe.
The 48-year-old Canadian has a long history of helping tribes. Derry boasts snug personal ties with several Bureau of Indian Affairs officials in Sacramento, according to a federal court deposition, and claims he has gotten more land into federal trust for California tribes than anyone. He first started working as a consultant with Guidiville a decade ago, beginning with failed attempts to buy land in Ukiah for an auto mall.
He is the tribe's gatekeeper, defender and promoter.
"There's a certain percentage of the public and the opposition that are going around saying this project isn't real. The emperor has no clothes," Derry said. "It sure feels real to us."
Guidiville and other tribes worked to extend a close relationship with regional BIA officials through a program using federal Indian funds to hire the very BIA officials who would help process their land applications. A tribal committee helped choose who was hired, funded the positions, and recommended the employees for cash awards.
A 2006 Interior Department inspector general's report states, criticizing the program for creating actual conflicts of interest. The "'whole purpose' is to ensure these applications receive a favorable recommendation," the report said.
Changes this year appear to weaken the tribes' hand in hiring decisions, but the program and many of the same Pacific Region employees remain..
Guidiville's ties
In Washington, the plan hinges on approval by Interior Department officials, who must find that Guidiville qualifies for casino land at Point Molate under a 1988 federal law that bars, with few exceptions, Indian casinos on "newly acquired land."
Both Guidiville, at Point Molate, and Scotts Valley, at a nearby site in North Richmond, seek an exception for "restored" tribes, having regained federal recognition in the same 1991 settlement of a federal lawsuit. But they need to show a "significant historical connection" to the lands, or at least the area.
The tribes owe their federal status to rancherias that the federal government set up a century ago for homeless Indians. No one claims the existence of any Guidiville villages or burial grounds near Point Molate, or that the tribe occupied land close to it. When an Indian mortar and pestle turned up at Point Molate, it was found to be Ohlone, according to a confidential city memo.
But the tribe submitted to the Interior Department reams of documents showing Pomo-speaking people traveled to the Bay Area "to engage in commerce and harvest natural resources," as well as census and historical records tracing Guidiville blood to Pomo, Ohlone, Wappo, Patwin and Coast Miwok Indians -- ancestry that lived or traded around the Bay Area before being forced out.
The tribe's hired anthropologist, James McClurken, also found that a federal program in the 1920s and '30s pushed at least 15 Guidiville women off the rancheria, to work as Bay Area domestic servants. It was an example, McClurken wrote, "of the federal government's actual encouragement of Guidiville Pomos' north/south migration during the first half of the twentieth century."
In April 2009, Contra Costa County challenged that claim with research by a hired historian, Lewis & Clark College professor Stephen Beckham. He concluded that only five of the 15 women cited by McClurken were actual Guidiville band members, and only one worked in Contra Costa County -- for 13 days.
"I have seldom encountered such misrepresentation in forty years of work relating to the documentation of Native American history and culture," wrote Beckham in an e-mail to a county official.
"I thought it nailed them," said Sara Hoffman, a former assistant county administrator, of Beckham's research.
Derry insists Beckham lacked access to primary historical materials and said his report "is not worth the paper it's printed on."
County about-face
Contra Costa County spent $1 million to fend off casino projects, including Beckham's research and studies on traffic and health impacts. So it was no small matter in November when the supervisors did an about-face, pledging support for the casino-resort in return for $12 million in annual payments and jobs for county residents if the casino rises.
County Administrator David Twa explained to the Interior Department that the county was persuaded by a review of about 5,000 pages of recently obtained historical documents. "We now have a greater understanding of the basis for the Guidiville tribe to request taking the Pt. Molate Site into trust," Twa wrote to Interior Secretary Ken Salazar. The new documents "have helped to change our opinion on the matter."
That wasn't exactly true. The county had the bulk of those documents earlier, guiding Beckham's analysis. After a fight, Guidiville later turned over another 500 pages of census records, academic reports and letters documenting the work program.
Twa recently said he never read them. Nor did Hoffman, county Supervisor John Gioia, or Beckham.
"The county did not send them to me," Beckham said. "It was surprising the supervisors rolled over."
Critical to that reversal was Gioia, whose district includes Point Molate. Just as the county was filing its last critical comments to the Interior Department last year, internal e-mails show, he was considering negotiations with Upstream.
Gioia, a leader behind the supervisors' 2005 vote against casinos in the county, said recently it wasn't the strength of the tribe's historical argument, but doubts about whether the county's voice would ring loud enough in Washington. At the time, the tribes were saying federal approval was imminent.
"It became a sort of reading-the-tea-leaves and playing a game of chess," he said.
Apparently, though, federal officials cared a lot about the county's opinion. Just a week before the Gioia, Twa and Upstream started negotiations, Richmond officials met with Interior officials in Washington for an update on the status of Point Molate.
"They absolutely said they wanted the county to be supportive," said former assistant city manager Janet Schneider.
Councilman Bates agreed. "They made it very clear that the county -- almost mandatory -- had to be a party of support."
Interior Department officials refuse to discuss where their review stands. But correspondence reviewed by Bay Area News Group suggest the staff has recommended approval for Guidiville, a decision in the hands of Obama appointee Larry EchoHawk, assistant Interior Department secretary for Indian affairs.
Donald Duncan, Guidiville's vice-chairman, said staff members at the Bureau of Indian Affairs told them two years ago -- during the Bush administration -- that they had determined the tribe qualified for the land in a legal opinion that remains pending.
"We've been waiting two years," Duncan said. "It's sitting there."
Seeking 'warm spots'
As federal officials weigh a move, congressional support for Indian casinos has dimmed. The explosion of Indian gaming into a $27 billion industry has led officials such as McCain, R-Ariz., the former head of the Indian Affairs committee, to seek limits on gaming beyond reservation lands.
The legislation granting the Lytton tribe casino land in San Pablo brought controversy, as did the taint of the Jack Abramoff scandal that began in 2004. And there is long-standing opposition to any Bay Area Indian casino from Sen. Dianne Feinstein, D-Calif., who railed against the Lytton deal and now heads the Senate appropriations subcommittee that oversees the Interior Department purse strings.
So far, thanks in part to the casino team's pull in Washington, Guidiville has survived the fray.
Cohen is a friend of McCain, having served as best man at McCain's second wedding. The developer's hiring of lobbyist Wes Gullett, a former top McCain aide, also didn't hurt. Gullett connected Upstream and the tribe with staff members on McCain's committee, Levine said.
"In the end, once they get us through the door, you have to make your own pitch," Levine said. "I think the Indian Affairs Committee staff has a warm spot for us, which is as important as anything else. Our goal is to have warm spots."
Levine said the project also has a quiet backer in Rep. George Miller, D-Martinez, who helped Lytton in San Pablo and took a barrage of criticism. Miller has refused to take a public position on a casino-resort on Point Molate.
"He doesn't need the hassle of being a cheerleader for this," Levine said.
Years later, a vote
Unlike other Indian casino bids, such as Scotts Valley in North Richmond, the project requires a vote by local officials, since Richmond owns the land. The council must certify an environmental review and finalize a deal with the developer and tribe for the casino-resort to rise.
The unanimous council vote of 2004 is long gone, replaced by an uncertain City Council split. At least three current council members and one mayoral candidate have wavered, flip-flopped or refused to state their positions on the casino-resort.
To date, card clubs and one casino tribe -- owners of Thunder Valley Casino Resort in Lincoln -- have spent $276,000 on anti-casino campaigns and for local candidates who oppose the project. The development team has dropped about $350,000 to support it, Levine said.
Most local political observers believe it will be the priciest campaign season in Richmond history.
Bates, the councilman and mayoral candidate, said he doesn't trust that voters can make an informed decision without reading details of the project or studying the benefits to the city. Still, he voted, reluctantly, to place the advisory measure on the ballot.
"You never want to shut the public out."
Staff writer Katherine Tam contributed to this story.