North Richmond casino plans in limbo

By John Simerman
Contra Costa Times
Posted: 01/14/2010 05:40:25 PM PST
Updated: 01/14/2010 06:03:54 PM PST

While a major Indian casino resort project on the Richmond shoreline faces heavy public scrutiny as a city council vote nears, another tribe with casino dreams in West Contra Costa has quietly encountered a setback in Washington, D.C.
The Scotts Valley Band of Pomo Indians is shopping for new backers, after a federal commission found that the tribe's longtime partner repeatedly lied and withheld information about several investors in the Las Vegas-style casino it plans in unincorporated North Richmond.
In a settlement deal revealed Thursday, Florida-based Richmond Gaming Ltd. agreed to get rid of those investors and give way to a newly formed entity qualified to manage a casino operation.
The deal with the National Indian Gaming Commission follows a stern ruling in September by the commission's then-chairman, who voided the tribe's gaming management contract with Richmond Gaming and chastised the company for a pattern of lies and hidden information. That letter from Philip Hogen, obtained by Bay Area News Group through the Freedom of Information Act, counted five instances in which Richmond Gaming reported false information about the identity of investors and failed to provide background information on them.
Hogen wrote that he "would not do business with an entity that has concealed or misled as much as Richmond (Gaming) has here"... ."
In the ruling, and in a 2006 letter, the commission also suggested that the proposed contract would give too much control and too big a stake in casino revenues to the investors, and not enough for the tribe.
Scotts Valley wants to build a 225,000-square-foot casino with 2,000 slot machines, dozens of gaming tables, a restaurant and a 1,500-seat theater on 30 acres along Richmond Parkway at Parr Boulevard. Analysts say it would generate several hundred million dollars in annual revenue.
The impact of the dispute and settlement on the future of the Scotts Valley "Sugar Bowl" casino remains unclear. Eric Zell, spokesman for the tribe, said Thursday he had not read the final agreement and could not immediately comment.
One statewide casino watchdog said the dispute illustrates a pattern of investors seeking big profits off California's array of small, former rancheria tribes who claim the right to regain a land base.
"It exposes the hanky-panky that's been going on with the tribe shopping ... investors from out of state trying to put casinos in places where nobody else can put them," said Cheryl Schmit of Stand Up for California. "We're talking about millions of dollars in the Bay Area."
Florida-based real estate developer Alan H. Ginsburg has long been the key backer of the project. But according to Hogen's letter, the list of people and entities with a stake in the project has grown to nearly two dozen.
Whether Ginsburg will continue to bankroll it is unclear. He has backed several tribal casino bids across the country through several entities, including a failed plan for an Indian casino near Oakland International Airport. One of his companies, NGV gaming, was an early backer of the Guidiville Band of Pomo Indians, the tribe that aims to build a $1.2 billion casino resort at the former Point Molate Naval Fuel Depot.
Guidiville now claims financial support from the tribe that runs Cache Creek Casino Resort in Yolo County.
Both tribes won federal recognition through the same 1991 federal court stipulation, and both claim they qualify for casinos in the Richmond area on "restored lands," an exception to a federal prohibition on gaming on Indian land acquired after 1988.
Ultimately, the Secretary of the Interior must agree to place the land in trust for the tribes. The tribes would then need to reach deals with the governor to run slot machines and other Las Vegas-style action.