In an effort to salvage the Land Development Agreement (LDA) with Upstream Point Molate, the “Casino Four” (Bates, Lopez, Rogers and Viramontes) have called a special City Council meeting for 6:30 PM, tomorrow, January 11, 2010, to pass an extension. Without such an action, the agreement expires on January 15, Friday of next week.

Meanwhile, “Stand Up for California” has contacted the city attorney, the FPPC and the FBI requesting an investigation (Click here) into a potential conflict of interest by Nat Bates stemming from a sponsorship in 2008 of Bates’ hosted TV program, “Historical Elected officials and Community Leaders.”

The Land Development Agreement, which was entered into by the City Council over five years ago in November 2004, has yet to produce a single job or any of the other benefits it promised. The original financial sponsor, Harrah’s is long gone.

According to Upstream , even in the best case scenario, completion of the project and realization of all the promised benefits is at least 5 ½ years off. That would be sometime in 2015.

Upstream Point Molate LLC has represented that the Yocha Dehe Wintun Nation of California, which owns the Cache Creek Casino is now the financial backer for the project, but there is no documentation for this assertion. The 1^st Amendment to the LDA requires Upstream to submit a letter on March 1 and September 1 of each year “… from one or more of the Developer’s financial partners, or banks, indicating that there are sufficient funds available for Developer’s estimate of the next twelve months of project expenses.”

On September 1, 2009, Upstream submitted a “Point Molate LDA Status Report” (see http://ca-richmond.civicplus.com/Archive.aspx?AMID=93&Type=Recent), but it did not include the requisite letters from “Developer’s financial partners, or banks.” In fact, it did not include any tangible financial information at all:

Our project budget over the next twelve months indicates that we will expend in excess of an additional $4 Million to continue to advance the project. With our various financial arrangements and partners, we continue to have adequate resources available to fund these costs as they are incurred.

There is no mention of who these “various financial arrangements and partners” are or evidence that they possess or have committed the resources. Amazingly, City staff, which seems blindly committed to this project mostly on Upstream’s terms, failed to note the omission or request additional information.

Although City staff has promised to engage an expert on Indian gaming to assist in evaluating the evolving project contextual issues, that has not happened. Despite this being the largest project in Richmond history, both staff and the City Council refuse to bring in any experts to help review and evaluate design issues. Apparently, they are completely confident that they are perfectly capable of doing this on their own as an ambitious  “on the job training” exercise. Similarly, City staff has prevaricated on numerous issues and continues to do so. Whether or not a tolling agreement exists with respect to the amended LDA has a different interpretation each week, and whether the Settlement of the previous Citizens for Eastshore Parks litigation gives the City a “clean slate” with respect to the LDA has placed the City squarely in dispute with the California attorney general, who has stated, “… this office would have very serious concerns about anything that would undercut the purpose and intent of the settlement.”

With the expiration of the LDA looming and both Upstream and City staff anticipating closing of the actual land sale, the question arose of who will guarantee the $30 million  note. The LDA states:

…the Developer shall deliver a guaranty of the Note from a guarantor (the “Note Guarantor”) whose long-term debt is rated in one of the four highest categories (without regard to “+”. “-“ or numerical modifiers by Moody’s Investment Service or Standard & poor’s Ratings Group (a “Qualified Guarantor”), in substantially the form attached hereto a Exhibit D.

Again, the Yocha Dehe Wintun Nation of California was mentioned, but no confirming documentation has been forthcoming nor has any guaranty been produced. Upstream acknowledged the need to amend the LDA to substitute the Yocha Dehe Wintun Nation for Harrah’s, but no action has ever been taken.

Meanwhile, the putative financial backer announced a month after Upstream’s optimistic September Status Report that their plans to triple the size of the Cache Creek Casino were being shelved because of “economic factors.” This is the same Yocha Dehe Wintun Nation that Upstream says will put up $1.2 billion to build the point Molate resort and Casino, guarantee a $30 million note, provide several million dollars to bridge the shortfall in the hazardous materials cleanup and pay millions more for project managers, architects and engineers to design and oversee the construction.

Even if everything in the financial arena were hunky dory, thus project still faces an imposing obstacle course, including:

·         A "restored lands" (sometimes called an "Indian lands") determination from the Solicitor's Office of the Department of Interior.

·         Approval of a “fee to trust application” from the Bureau of Indian affairs

·         Approval of a Management Contract by the National Indian Gaming Commission (NIGC).

·         A Compact from the Governor of California

·         Approval of the Cleanup Plan by the San Francisco Bay water Quality Control Board

None of the federal actions can take place until the Environmental Impact Statement (EIS) is certified, which is estimated at September 2010 at the earliest. Applkications haven’t even been filed for two of the three federal approvals, and is a sure thing. The proposed management contract for the Richmond Parkway casino planned by the Scott’s Valley Band of the Pomo Indians was rejected by the NICG, and they are out of business while searching for a new partner.

On October 12, 2009, Andrea Lynn Hoch, the governor’s legal affairs secretary, asked the Bureau of Indian Affairs (BIA) to reject the proposal by a Berkeley developer and the Guidiville Band of Pomo Indians to build a $1.5 billion casino resort on the Richmond shoreline.

In addition, the Richmond City Council has to approve a badly flawed Environmental Impact report that requires a finding of overriding considerations on three unmitigated impacts, and the City Council has to approve updated ”Design Concept Documents” and a “Services Agreement.”

There is one outstanding lawsuit against the City and Upstream (Citizens for Eastshore Parks) and another CEQA lawsuit challenging Contra Costa County’s support.

Those who continue their unwavering support for this project do so largely based on the promise of jobs in numbers almost beyond belief, an attractive prospect particularly in the current enduring recession, but at best, these jobs are years away. By the time the first job emerges at Point Molate, California will either be long out of recession, or we will be a bankrupt shambles.

I supported this project for over five years, but there are too many unanswered questions and too many contingencies to continue. In the fall of 2009, foreseeing that the end of the LDA was fast approaching, I requested that the project be placed on the executive session of every City Council meeting from then on until the outstanding issues were resolved and the LDA amended to address them. There has been lots of talk but no action.

In my opinion, the City Council would be irresponsibly negligent to extend this flawed agreement at  this time. Why staff has raised no alarms continues to puzzle me. The economic foundation of Indian gaming may be crumbling. Just two weeks ago, a financial crisis at Foxwoods Resort & Casino, the biggest and most successful Indian casino in the country “.. sent shockwaves through Indian country and the financial organizations that lend it money.” Click here for the story. The story notes, “Creditors can’t take over an Indian casino or force the sale of its assets, because of a tribe’s status as a sovereign nation.” Guess who will be a creditor when this project goes through? The City of Richmond.