Legislators eye first urban casino in S.F. Bay Area

Don Thompson

Friday, Jan. 14, 2005 | 9:42 a.m.

SACRAMENTO -- California's first casino in the midst of a major urban area would bring badly needed jobs to one of the San Francisco Bay's poorest communities, supporters said Wednesday as the Legislature began consideration of the project.

But opponents said the 2,500-slot-machine San Pablo casino would bring more traffic and crime to the east bay and devastate the area's race tracks and card rooms.

Legislators balked last summer at an agreement reached by Gov. Arnold Schwarzenegger that would have let the Lytton Band of Pomo Indians operate 5,000 slot machines at what is now a San Pablo card room.

Schwarzenegger and the tribe cut the number of slot machines in half and agreed to delay lawmakers' consideration to this year. The governor also got the tribe to agree to give 25 percent of its estimated annual $618 million in profits to the state and local governments, or about $155 million a year.

Wednesday's hearing by the Senate Governmental Organization Committee was the first on the compact. It needs lawmakers' approval to take effect.

Both supporters and opponents of the Lytton project agreed it was unlikely that other tribes could get approval for casinos in the same area.

It took an act of Congress to give the opportunity to the Lytton Band. Schwarzenegger said that federal law forced him to agree to permit gambling in an off-reservation area he would normally oppose.

Cheryl Schmit, a frequent critic of casinos as founder and director of Stand Up for California, lauded the Lytton Band's cooperation and revenue-sharing agreement as far more comprehensive and lucrative than the initial 1999 Indian gambling compacts negotiated by former Gov. Gray Davis.

The Lytton agreement "sets the bar" for all future casino pacts, she said. Among other provisions, it provides legal protection for those who claim they were injured or cheated at casinos that otherwise would be immune because of tribal sovereignty.

"Congress gave this tribe a clear and indisputable exception," Schmit said.

She and other witnesses said other tribes seeking Bay Area casinos are unlikely to be able to prove sufficient ancestral ties to land there to stake a legitimate claim absent another act of Congress. In addition, the Lytton's agreement with Schwarzenegger bars other nearby casinos.

The Oakland City Council this week rejected a proposed competing casino near Oakland International Airport, despite a $30 million-a-year revenue sharing offer by the Lower Lake Rancheria-Koi Nation, a landless tribe of Pomo Indians based in Santa Rosa.

Two other tribes are seeking to build casinos in western Contra Costa County, northeast of San Francisco.

Representatives of Contra Costa County and Doctors Hospital, which is near the proposed San Pablo casino, said they are concerned about its effect on everything from traffic congestion to crime in the urban area.

A casino employee testified that pay and benefits have dwindled since the Lytton Band took control of the San Pablo card room, disputing testimony from union officials who support the casino proposal.

Horse racing and card room operators, who unsuccessfully fought the proposed casino with dual lawsuits, warned that competition from the casino would devastate their Bay Area outlets.

The casino would take in $350 million that Bay Area residents currently gamble in Nevada, countered Mark Dvorchak of Economic Research Associates, who did an economic analysis for the tribe.

"This is money that is now spent elsewhere that would now be spent in the economy of this state," he said.

Building a casino where the tribe now operates a card room would cost another $663 million, he said. The casino would create 6,600 jobs in the area's poorest city, he projected.

San Pablo has among the lowest per capital incomes in the Bay area, less than half the national average, and an 18 percent poverty rate, said San Pablo City Manager Brock Arner. "It is the best possible thing that could happen to this community."

The 277-member Lytton Band has an unemployment rate of between 60 percent and 70 percent, said the tribe's chairwoman, Margie Mejia.

"Our tribal members still live in desperate conditions," she told lawmakers. "This compact represents our path from poverty to self-reliance."