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County to reap $9 million annually with RP casino deal

Published: Wednesday, October 24, 2012 at 7:57 a.m.
Last Modified: Wednesday, October 24, 2012 at 7:57 a.m.

Sonoma County supervisors Tuesday unanimously approved a multimillion-dollar revenue-sharing agreement with the tribe that is building a casino next to Rohnert Park.

“What we have before us is certainly a really good outcome of negotiations for the county,” said Supervisor David Rabbitt, whose 2nd District includes the 254-acre Wilfred Avenue casino site.

The vote came at a meeting that was as close to being celebratory as any to occur in public between a local government body and the Federated Indians of Graton Rancheria.

“This is historic,” 5th District Supervisor Efren Carrillo said of a deal that guarantees Sonoma County at least $9 million annually to offset the project’s impacts, plus up to $38 million more a year if the casino makes enough money.

Addressing the board, Graton Rancheria Vice-Chairwoman Lorelle Ross said: “Thank you for working with our tribe nation-to-nation on an unprecedented agreement.”

Ross said the deal established new ground from which she hoped tribe and county could move forward “beyond the legacy of hurt and pain.”

The casino, with a maximum of 3,000 slot machines, is projected to open next year. The tribe, which started work on the project in June, secured $850 million in new financing for it in August.

The negotiations stemmed from a deal that the county reached with Graton Rancheria in 2008 to negotiate payments to address its impacts. That agreement was struck by county officials who had concluded they could not legally stop the casino.

The tribe is to pay, for the first seven years of operation, 15 percent of its net earnings from gambling into a state fund. After seven years, that drops to 12 percent. Each year, the state will distribute money it collects to the county and Rohnert Park, which has its own 20-year, $200 million revenue-sharing contract with the tribe.

“This agreement we are seeing today sets a new standard in addressing local impacts from a casino,” said 4th District Supervisor Mike McGuire.

There was a brief moment just before negotiations opened that put in question how amicable the talks would be. Tribal Chairman Greg Sarris accused a supervisor whom he would not name of putting out “misleading ... inaccurate” information about the casino resort project and said he might not give more than the minimum required amount in mitigation money to the county.

That appears not to have happened. Instead, the deal foresees millions in additional payments that go beyond alleviating the casino’s direct impacts.

For example, after required payments are made to Rohnert Park, the county and two state funds for other Indian tribes, the Graton Rancheria is to give up to $30million a year more to the county for open space and parks projects, conservation and farming-related purposes.

After that, the deal says, up to $8 million a year is to go to the county’s Indian Health Project and also other Sonoma County Indian tribes that do not have gambling operations.

Those eventualities are not guaranteed, of course, depending as they do entirely on the casino’s earnings. Projections disclosed in June, in the state-tribal compact that gives the tribe the right to run a Las Vegas-style casino, were that it would net $418 million in gambling revenue by its seventh year.

However, the deal also includes unexpected protections. For example it includes a clause under which, if the state does not give money sent it by the tribe back to the county in a timely manner, the tribe will advance the county that money, up to $5.1 million a year for public safety, social services and and key transportation-related mitigations.

Supervisors highlighted that possibility.

“I absolutely trust that the tribe is trustworthy. My main concern is that the state will sit on these payments for a long time,” said Chairwoman Shirlee Zane said.

The contract also includes language allowing negotiations to be reopened if the county wants to reassess the impacts of the casino and a 200-room hotel that plans call for to be built in the future.

And it stipulates that of the money the county is to get, Santa Rosa, Petaluma, Sebastopol and Cotati are to share $416,000 a year for law enforcement, while county fire districts would split $1 million.

“It really is the best agreement in California,” said Valerie Brown, the only current supervisor on the board when the tribe first announced its casino project and spurred years of angry opposition and fractious meetings involving residents, county officials and tribal members.

“It is a big commitment to this county,” Brown, of the 1st District, said of the agreement inked Tuesday.

Like her colleagues, she gave the tribe considerable credit for the outcome, which provides the county with three to four times as much as it earlier had projected it would get.

“It wasn’t because we said, ‘We want it to happen,’” she said. “It was because the tribe said, ‘We want it to happen.’”

The deal includes limited waivers of sovereignty by the tribe that open the door to legal recourse should differences arise over whether the parties are honoring the contract.

“If there was to be a disagreement with the tribe or we were to believe there was a breach ... we’d have the ability to go to court or arbitration to enforce the agreement,” said County Counsel Bruce Goldstein.

Goldstein also suggested the deal could end nearly a decade of tension between successive boards of supervisors and the tribe, which saw the casino as its only line to self sufficiency.

“I believe this is an opportunity to transform the relationship between the tribe and county,” he said.

Some of the philosophical and practical groundwork had been laid for Tuesday’s agreement in talks between the county and the Dry Creek Rancheria Band of Pomo Indians, who opened a casino above Geyserville in 2003.

In 2008, the county reached an agreement with the Dry Creek Rancheria under which the tribe would pay $100 million to the county over 12 years. But that took place in the context of multiple legal challenges by the county to the casino.

“That was quite a different picture,” Dry Creek Rancheria Chairman Harvey Hopkins said Tuesday.

He was among leaders of several Indian tribes, including the Cloverdale Rancheria of Pomo Indians and the Kashia Band of Pomo Indians, who were on hand Tuesday to watch an event that they said signaled a step forward for county-Indian relations.

“This is good for everybody,” Hopkins said. “It’s a recognition that the tribal members and the county can work together.”

McGuire, whose district includes the River Rock Casino, said his experience with the Dry Creek leadership illustrates the possibilities for the county’s future relationship with the Graton Rancheria.

“Either Chairman Harvey Hopkins picks up the phone, or I pick up the phone and say, ‘This is something we need to work with,’” he said.

You can reach Staff Writer Jeremy Hay at 521-5212 or jeremy.hay@pressdemocrat.com.

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