NORWALK — City officials apparently are ready to drop out of the card club business before the first hand is ever dealt.
Four of five City Council members said last week that they will vote Monday to rescind a controversial 1983 ordinance that would have licensed and regulated a card club in the city.
The four council members--Marcial Rodriguez, Bob White, Lou Banas and Mayor Cecil Green--said they were concerned about the problems of other card clubs in Bell and Commerce, which have been plagued with financial losses, criminal indictments for mail fraud and bribery, and recent arrests for cheating and illegal gambling.
"I've taken a second look at the card club issue," said Green, who proposed rescinding the ordinance. "I just don't think we need it in the city."
A 3-2 vote would be required to rescind the ordinance. The fifth council member, Peg Nelson, declined comment on how she would vote.
Suits Postponed Plans
The Norwalk card club was to have been built on the unused Wright School campus, but the plans were postponed for a year by lawsuits involving the owner of the downtown property, the Norwalk-La Mirada Unified School District and three would-be developers.
The lawsuits, however, were settled last month, and the school district is now seeking bids on the 20-acre property, which, according to a recent appraisal, is worth almost $10 million, school officials said.
The four council members who favor rescinding the ordinance said they believe the economy has improved enough in the past two years to support a downtown hotel without extra revenues from a card club.
Under the original proposal submitted two years ago by Santa Fe Springs developer Johnny Johnson, the card club was to have generated enough profits to offset losses expected in the first few years of running the hotel, as well as supply the city with annual revenues of at least $1.5 million.
Two council members, Green and White, said they would vote to rescind the ordinance out of loyalty to Johnson, who paid for a public relations campaign that resulted in the ordinance being approved by the council and passed by residents in a special municipal election.
"I had total confidence in Mr. Johnson, and I knew the club would be operated properly," Green said of the developer, who built the Azusa Greens Country Club in Azusa and the Imperial Square Office Park in Norwalk.
Green said he gave Johnson a deadline of March 7, which the developer did not meet, to attempt to put together one last deal to build a hotel and card club on the Wright campus.
Johnson on Thursday confirmed in an interview that he could not find a hotel developer and said he would withdraw from the project.
Johnson has been trying to put together such a deal since 1980, but his attempts became mired in litigation with the school district and two other would-be developers, whom Johnson accused of attempting to cut him out of the deal.
Under the original proposal, Johnson would have developed the card club and another developer was to build the hotel. With Johnson out of the picture, Green said he did not trust anyone else to operate a card club in Norwalk.
"I guess you owe him (Johnson) some loyalty on the card club issue," Green said, adding he did not have "much faith in anyone else" who has come forward to propose building the complex.
"If Johnny gets out of it then we're probably gonna kill it (the ordinance)," said White.
Tired of Issue
"We're really tired of kicking the issue around in the city," White said.
White and Green denied that they were rescinding the ordinance as a political favor to Johnson, who said in an interview that he did not request the rescinding of the ordinance and that he had no "clout" with council members.
He did say however that he had "no problem" with the ordinance being rescinded.
Green said he didn't believe "anybody else could have gotten a license for a card club" in Norwalk.
One council member predicted a unanimous vote Monday.
"The council stuck together the first time around, and I expect a unanimous decision Monday night," Banas said. "We don't necessarily have the same trust" in the proposed card club as when the council approved the ordinance, 5 to 0, on May 9, 1983, Banas said.
When the ordinance to regulate and license the club was approved, council members hailed it as a "turning point" in the city and proclaimed the ordinance as one of the toughest in the nation. The ordinance was also approved, 4,169 to 3,593, by residents in a special election in October, 1983.
But problems at other Southeast card clubs have soured the city's interest in the club, council members said. In Bell, two former city officials and three of the club's general partners were convicted of mail fraud. Also, the Bell City Council has voted to sue the club for $155,000 in taxes and fees owed since December, and within the past month, seven persons have been arrested for cheating and illegal gambling at the club.
Meanwhile, in Commerce, three City Council members and the city's former economic development director have pleaded guilty to bribery charges in connection with the granting of a card club license.
In Norwalk, officials of the Norwalk-La Mirada school district have mailed 100 letters to prospective developers, seeking statements of interest and qualifications in building a hotel and office complex on the Wright campus, said Bruce Butler, the district's associate superintendent of business services.
Butler said that district officials, working closely with city officials, would review the replies and request bids from a few selected developers. He said a developer for the project may be selected within 90 days.