New gaming ground
Compact between Graton Rancheria, governor goes far in addressing casino's impacts, but other tribes say they'll fight it
Published: Sunday, April 15, 2012 at 3:00 a.m.
Last Modified: Sunday, April 15, 2012 at 11:41 p.m.
The new gaming compact giving the Federated Indians of Graton Rancheria the right to open a Las Vegas-style casino resort outside Rohnert Park pushes the relationship between the state's tribes and its local governments into untested territory.
That has roiled the Indian gaming community across California, where some fear it gives local governments too much sway over casino projects.
“This compact is a complete and total abrogation of tribal sovereignty,” said Michael Lombardi, chairman of the Augus-tine Band of Cahuilla Indians' gaming commission, in Riverside County.
“The Graton Rancheria people traded their sovereignty for dollars,” he said.
Government officials, meanwhile, praise the compact as a hard-won victory. They say it recognizes sovereign Indian rights, but also gives local governments the means to address a casino's impacts on their community.
“It is historic,” said Lori Norton, Sonoma County deputy administrator. “We're hoping it is the model that represents where we're moving towards in these compacts.”
Most significantly, the compact between Gov. Jerry Brown and the 1,300-member tribe requires the Graton Rancheria to reach additional agreements with Sonoma County and Rohnert Park to alleviate impacts that include increased traffic, the need for added public safety resources and removal of open space.
“It's still being thrust on us,” Supervisor David Rabbitt said of the casino. But he considers the compact “historic in the amount of dollars being assigned to local impacts.”
Graton Rancheria officials have refused to discuss the compact since it was announced at the end of March, or their plans for the casino and resort, which would be the county's largest employer.
After repeated attempts to reach him by phone and by email since the compact was announced March 30, tribal chairman Greg Sarris last week called a reporter and said the tribe doesn't talk to the press, and then shouted, “You don't talk to any of us, punk,” and hung up. A later call to him seeking comment was not returned.
The agreement governing the financial benefits and other accommodations the tribe must make with Rohnert Park and the county is especially important because of the casino's proximity to the city, off Highway 101 just west of Home Depot, Wal-Mart and Scandia.
The Nevada-style project would have 3,000 slot machines and a 200-room, two-story hotel that would rank it among the state's eight largest casinos.
It would be bigger than the 2,300-slot Cache Creek Casino and Resort in rural Yolo County — now the closest large-scale casino/resort to the Bay Area. That destination casino, about 12 miles east of Interstate 505 north of Winters, has a low-rise, 200-room hotel, equivalent to the number of rooms proposed for the Rohnert Park complex.
The Thunder Valley Casino, located about two miles from the outskirts of Lincoln northeast of Sacramento, has 2,800 slots and a 17-story, 300-room hotel.
In comparison, the River Rock Casino in Geyserville has about 1,250 slots. The Dry Creek Pomo tribe four years ago shelved plans for a $300 million Tuscan-themed complex that would have included a permanent casino and 255-room hotel.
If completed, the Rohnert Park casino would draw gamblers and entertainment-seekers from around the region, adding to traffic on the county's roads while also bringing more than 2,000 permanent jobs, according to environmental reports and tribal estimates.
Compacts have evolved
The agreement reflects an evolution since 2000, when California voters legalized Nevada-style gaming.
“We see more detailed provisions, we see more thinking going into the impacts a casino will have once it is built and is fully operational,” said Kathryn Rand, co-director of the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota's law school.
“It demonstrates what Congress has hoped the tribal state compacts would be,” she said. “Not just inter-governmental agreements, but government-to-government negotiations, cooperative policy-making to address the socioeconomic benefits and disadvantages a casino might have.”
The stakes represented in the Graton compact, which involve hundreds of millions of dollars to the county and city, remain high because its future is still unresolved.
The Legislature and the federal Department of the Interior have yet to ratify the compact. Those steps are generally considered routine, but because of the new compact requirements, they may not be.
“Every Indian tribe in California will be up there telling the Legislature to vote against it,” Lombardi said. “I haven't found one Indian tribe that supports this; they're on their own.”
The tribe's Oakland attorney, John Maier, would not comment.
Also, the county has yet to conclude its agreement with the tribe and it is unclear whether an accord that Rohnert Park and the tribe reached in 2003 is to be re-opened.
“In terms of whether we can negotiate for more, I think that's true,” said Sonoma County deputy county counsel Jeff Brax.
Early pact with Rohnert Park
Years before compact talks and during the tenure of a different governor, Arnold Schwarzenegger, the tribe reached the sort of agreements with the county and Rohnert Park that the compact calls for.
The 20-year pact with Rohnert Park provided for $200 million in funding for public safety and other community services. The agreement with the county left the amount of payments from the tribe undecided, but contained a methodology for them to be hashed out before the casino opens.
The compact requires that to happen as a condition of approval, something earlier compacts had not done.
“It's not vague, it's not ambiguous. This is a real agreement,” said Cheryl Schmit, director of Stand Up for California, a Penryn-based gambling watchdog group.
Under previous compacts, tribes had to agree with local governments to address casinos' off-reservation environmental impacts in areas such as traffic, public safety, noise and water resources and problem gambling.
But the Graton compact's requirements go further. It is the first compact to require that a tribe and local governments reach agreements to address the casino's local impacts in open-ended ways not necessarily tied solely to a new construction project and to problem gambling.
That gives the county and its third-largest city extra room to negotiate substantially greater financial concessions.
“These kinds of agreements are going to be much more flexible in getting money locally,” said Jacob Applesmith, a senior adviser to Brown who negotiated key sections of the compact.
In this case, Applesmith said, the new provisions arose from a “mutual recognition” by the state and tribe “that there's an impact on the community that's not necessarily tangible.”
The tribe's casino, restaurants, parking garage and hotel would be 535,000 square feet in total, according to the terms outlined in its approval by the National Indian Gaming Commission.
The compact demonstrates the tribe's commitment to not only lifting up its own members, but also to playing a broader role, said Frank Ross, a former member of its governing council.
“Everybody's going to benefit, I hope the communities around know that,” said Ross, who owns a Novato antique store, Beehive. “I think Greg Sarris and the whole tribal council have done a great job carrying it through.”
Eyes on new compact
While the new compact does not set a legal precedent for other state-tribe negotiations, it certainly will hover over them. And because it creates new ways for the state and local governments to try and get a share of casino revenues, it may hinder the tribes, observers said.
“It's a very important compact in terms of its ability to set the stage for future compacts,” said Howard Dickstein, a Sacramento attorney and a powerful player in Indian casino politics.
“From the point of view of gaming tribes, I have serious concerns that this would make it more difficult to do business,” said Dickstein, whose clients include the United Auburn Indian Community, which has the Thunder Valley casino.
The terms of some of the additional agreements are still to be decided, and the impacts to be discussed could be wide-ranging, including more programs to treat problem gamblers and ease increased burdens on the county's public health system.
“If this tribe negotiates for (mitigation) funds that are not sufficient, then yes, we would negotiate and arbitrate for more,” Brax said.
That's not something that other tribes likely want. And it's a provision that may have been pushed on the Graton Rancheria, Indian gaming observers said.
“They were at the end of their rope, they had no other deal,” said Indian gaming analyst Victor Rocha, who runs an independent industry news website, Pechanga.net.
The tribe told the governor's office in its compact negotiations that it has taken on more than $200 million in debt trying to get the project off the ground.
“My tribe would never have signed that deal, a lot of other tribes would never have signed it. But we are not in this situation,” said Rocha, a member of the Pechanga band of Luiseño Indians, which operates a Temecula casino with 3,000 slot machines.
Compact covers debt, impacts, other tribes
Under the terms of the Federated Indians of Graton Rancheria's 20-year gaming compact, millions of dollars a year would flow not only to the tribe, but to local governments, other Indian tribes and the Las Vegas company that is to manage the casino.
The compact — the 69th in California since 2000 — is a negotiated contract between the state and the tribe allowing it to run a Nevada-style gaming operation.
The annual payment formulas set out in it are designed to:
Ensure the tribe meets its negotiated financial obligations to address the casino's impacts on areas including the environment, traffic and public safety;
Assist Indian tribes that do not have their own gambling operations;
Fund future grants to local governments and agencies that can demonstrate the casino is impacting them.
But the tribe's interests are foremost in the compact, officials said.
“The tribe should be the primary beneficiary of the gaming operation,” said Jacob Applesmith, a senior adviser to Gov. Jerry Brown who negotiated sections of the compact.
While the compact requires the Graton Rancheria to pay 15 percent of its net gaming income to Sonoma County and Rohnert Park, it waives that requirement for the seven years after the casino opens. During that period, the tribe first takes money for itself and to pay down the more than $200 million it has rung up in “pre-development costs.”
That would cut into how much the county and Rohnert Park would get initially — although they would still get about a combined $100 million over seven years if the tribe's revenue projections hold up. The formula also promises a major bump in payments after that.
Estimated initial revenues for a 3,000-slot machine casino are $328.5 million, and in its seventh year, $392 million.
In the first year of casino operations, the tribe is to reserve $9,000 per member — it has about 1,300 — up to a total of $11.65 million.
Above that, the tribe is to keep $13,000 per member, up to $17 million, to pay down its debt to its financial backer, Station Casinos, which is to manage the casino for the first seven years.
By its seventh year, the tribe is to keep $21,000 per tribal member for the “benefit of the tribe and tribal members,” the compact says. By that point, the set-aside for debt payment is $2,225 per member.
At that point, payments to the county and city would likely rise as the requirement kicks in for the tribe to make its full 15 percent of earnings payments.
(You can reach Staff Writer Jeremy Hay at 521-5212 or firstname.lastname@example.org.)
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