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Gov. Signs Pacts With 5 Tribes

One compact OKs a huge urban casino. State would get $200 million a year from the deals.

August 20, 2004|Peter Nicholas | Times Staff Writer

SACRAMENTO — Gov. Arnold Schwarzenegger announced Thursday that five new agreements with Indian tribes were expected to bring the state at least $200 million in annual revenue -- most of it from a planned Bay Area casino that would be California's first major urban gambling hall.

Schwarzenegger has now reached agreements with 10 tribes, including four that currently have no casinos. Once their casinos are operating, that will push to 57 the number of California tribes with gambling businesses. And the governor is looking to sign up more, part of a campaign promise to tap tribes for a larger share of their casino profits.

Together, Schwarzenegger's 10 accords would bring in a total of about $350 million to California's coffers, according to estimates by his administration. The amount falls short of Schwarzenegger's projection in his revised May budget of collecting $500 million from the tribes. He later pared that estimate to $300 million.

The governor's pact with the Lytton Band of Pomo Indians for a casino off Interstate 80 in San Pablo -- about 14 miles from Oakland -- could be the most lucrative to date.

The tribe would be allowed up to 5,000 slot machines and would pay the state up to 25% of its profits from both slot machines and table games, the largest percentage Schwarzenegger has negotiated to this point. Administration officials said no other Indian tribe in the nation was making a percentage payment of that scope.

In some other states, such as New York and Connecticut, tribes pay up to 25%, but only on slot machines.

The San Pablo casino could bring California at least $152 million, administration officials said -- more than 40% of the total that would be raised each year under the governor's pacts.

"This is the most lucrative revenue-sharing deal for any state ... for Indian gaming," said Bill Thompson, professor of public administration at the University of Nevada, Las Vegas. "It is nearly the most revenue for any casino in the United States."

In a statement released by his press office, Schwarzenegger said: "I am very pleased with the financial contribution these tribes have agreed to make to our state and with the many protections for patrons, workers, the environment and local communities we were able to include in the agreements."

Schwarzenegger was in Los Angeles on Thursday. It is unusual for a governor to be outside the capital in the final weeks of the legislative session.

The governor has said he doesn't want to see casinos sprouting near cities. Administration officials said he had no choice in the San Pablo case because Congress compelled his administration to negotiate with the Lytton Band. Protections are built into the pact to discourage more Bay Area casinos -- although there is a push for a casino with 2,000 slot machines in Rohnert Park, north of San Francisco.

"This site is a site to which the tribe gained entitlement by special act of Congress," Peter Siggins, the governor's chief counsel, said at a news briefing Thursday. "I guess I would say it would take an act of Congress to make this governor do anything else with respect to urban gaming in this state."

Schwarzenegger plans to sign the five new accords Monday. State lawmakers and the U.S. Department of the Interior must also approve them. The Legislature is expected to do so, though some lawmakers Thursday voiced objections, citing the anticipated size of the San Pablo casino and the sum of money the state would get in return.

"The impact of the casino is anything but modest," said Assemblyman Mark Leno (D-San Francisco), whose district is across the bay from the San Pablo development, currently a card club. "For us to be building into our budgets these kind of large-scale developments in our urban areas, we are going to be wondering in a few years why we did it." Sen. Don Perata (D-Alameda) said the planned San Pablo casino was too large for the community.

The tribe submitted a project description last month envisioning the casino project as between 500,000 and 600,000 square feet. The casino would cover two floors and stretch 200,000 square feet, with seven to eight stories of parking, said Jerome Turk, a major investor in the project. It would offer up to 200 card tables, plus 250,000 square feet of restaurants, office space and other facilities. Big-box stores such as Costco generally are 100,000 square feet.

Perata said: "It's out of scale. I'm beginning to hear from the community that they had no idea when they started this that something like this would be the end product."

The other pacts Schwarzenegger reached are with:

* The Buena Vista Rancheria of Me-Wuk Indians near Ione; they are expected to provide about $20 million in revenue to the state. The tribe does not now have a casino.

* The Coyote Valley Band of Pomo Indians near Ukiah, whose financial contribution could not be estimated by the Schwarzenegger administration. The tribe runs a casino.

* The Fort Mojave Indian Tribe in far eastern San Bernardino County, which will be limited to 1,500 slot machines and which is not expected to bring in "significant" money for the state, according to the administration. The tribe does not have a casino in California but it has gambling halls in Arizona and Nevada.

* The Ewiiaapaayp Band of Kumeyaay Indians in eastern San Diego County, which is expected to bring in about $30 million a year. The band has no casino.

Schwarzenegger aides said future governors would be inhibited from approving urban casinos by a clause in his pact with the Lytton Band. It says that if another casino opens within 35 miles of the one planned for San Pablo, the Lytton Band would be relieved of much of its financial obligation to the state.

Times staff writers Dan Morain, Jordan Rau and Robert Salladay contributed to this report.

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