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City Will Lay Off Workers Due to Closing of Card Casino : Finances: Loss of tax revenue will cost as many as 10 employees their jobs over the next 45 days.

August 16, 1992|JILL GOTTESMAN | TIMES STAFF WRITER

BELL — The temporary closing of the Regency Club card casino--which Bell officials had expected to provide $955,000 to city coffers this year--has sent the city's finances into a tailspin.

As many as 10 city employees will be laid off in the next 45 days and additional "highly visible" cuts will be made, city officials said last week.

"It's a miserable situation," City Administrator John Bramble said after a lengthy meeting Thursday with department managers who must now dig deeper to come up with additional cuts in the city's $7.1-million budget. Five employees had already been laid off in June because of budget cuts.

Bramble said he does not yet know which departments will be hit by the new layoffs.

"We don't know what the final answer is yet," he said. "But we have to take action now."

The city's problems began when the casino closed July 31 after its gaming license expired. Bell stands to lose $80,000 each month the casino is not operating.

The Regency's most recent owner, John Chi, who brought it out of bankruptcy in mid-1990, did not renew the casino's license last month, according to the state attorney general's office.

Chi, who owes $5.6 million on the club, also defaulted on his July payment and has failed to pay August rent, according to court records. He has reportedly left the country, and his whereabouts are unknown.

Before the casino can reopen, a new license must be issued, either to the bankruptcy trustee to whom the club ownership reverted when Chi abandoned it or to a new owner, officials said.

The process can take up to six months, said George Scarborough, head of the attorney general's gaming registration division.

The club's city gaming license also will be revoked this week, Bramble said, because a condition of having a city license is having a state license. The club's bar and restaurant are open, however.

Financial analysts at City Hall now have the task of eliminating from the budget $470,000 they had been counting on from the casino--about half the total revenues expect from the casino this fiscal year.

If the casino remains closed on Sept. 2, Bramble said, the remainder of the projected revenues from the club will be subtracted from the budget. At least five additional city workers would lose their jobs, he said.

Bramble was unsure which other services will have to be cut, but he said it will be across the board in all departments, including the Police Department.

Last month, the Bell City Council approved an 11% utility users tax to help recoup revenues lost through state budget cuts.

This isn't the first time the troubled casino's finances have affected the city. In fact, the Regency Club's predecessor, the California Bell Club, reportedly never paid the city about $1.6 million in tax revenues owed before it was ordered closed in December, 1989.

The city budgeted but never got $700,000 from the club in the first part of 1990 because the casino did not reopen until Chi bought it in July of that year.

At its peak in 1982, the California Bell Club enabled the city to rake in more than $2 million in revenues.

Last year the Regency Club contributed $641,000 to the city's budget, but officials had optimistically projected that the club would generate close to $1 million this year.

"They had a couple real good months recently, and things were really starting to move," Bramble said.

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