O.C. City Hopes to Add Touch of Vegas

The race to build urban casinos in California heated up Tuesday as an Orange County city said it hoped to build a Las Vegas-style resort just blocks from Disneyland.

As word emerged that Gov. Schwarzenegger was preparing to sign a deal that would allow an Indian casino in the Bay Area -- the first in an urban area -- officials of Garden Grove said they had had talks with a San Diego County Indian tribe and Las Vegas mogul Steve Wynn to build a similar project.

The city’s proposal calls for Garden Grove to sell up to 45 acres on tourist-rich Harbor Boulevard to the Mesa Grande Band of Mission Indians, which would build a mega-resort on the property.

Garden Grove City Manager Matt Fertal said the city -- which has long struggled to cash in on its proximity to Disneyland -- envisioned a resort that would include restaurants, shopping and live entertainment comparable to the best in Las Vegas.

“We have the opportunity to bring in the most premier resort developer to Orange County and create an attraction unlike anything else in California,” Fertal said. “If people want to focus on just the gaming, then they’re being very shortsighted.”

City officials said they met with Wynn earlier this year to discuss the idea and had also pitched it to representatives of the governor. Wynn, who built the Bellagio, Mirage and Treasure Island casinos on the Las Vegas Strip, confirmed the meeting but said the talks were “based on hypothesis on top of hypothesis.” As yet, Wynn said in a statement, “there are no negotiations.”

Still, the discussions are further evidence that struggling cities throughout California may look to casinos as a source of much-needed revenue and jobs. The deal would allow the tribe to build a major casino in one of the nation’s most densely populated areas and give the city and state a potential windfall in tax revenue.

The tribe and the city are eyeing a parcel on Harbor Boulevard, just south of Disneyland, that the city has placed in its redevelopment zone.

Casino industry analysts and local officials said they doubted the deal would be approved. Already, there is significant opposition -- including from the city’s mayor, Bruce Broadwater, who said he thought a casino could attract crime to an area once frequented by prostitutes.

“We have worked very, very hard to clean up Harbor Boulevard. For us to go a step backward, I’m not for that,” Broadwater said.

Orange County Supervisor Chris Norby said Fertal and Garden Grove City Councilman Mark Rosen told him about their idea during a meeting Friday. Norby disclosed the idea at Tuesday’s board meeting and said he was opposed to it.

“I think it’s a bad idea,” said Norby. “Redevelopment should not be used to support gambling.”

The proposed land swap could work legally if the city and governor and other Indian tribes agreed to it, said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada. But he was skeptical.

“It would be very difficult,” Eadington said. “Is California willing to put a major casino ... in that kind of setting? This may be too much, too fast and too concentrated. It certainly runs against the public policy of the current administration.”

Indeed, Gov. Arnold Schwarzenegger in the past has said he is opposed to casinos in major urban areas.

“The governor does not wish to see an expansion of urban gaming,” said Schwarzenegger spokesman Vince Sollitto. In cases where the state is not obliged by federal law to negotiate with tribes, “the governor would want to see strong local support for any proposal.”

Norby said the city officials told him that the governor would want the approval of the city and county before he would even consider such a proposal. Supervisor Chuck Smith, whose district includes Garden Grove, said he was also opposed to the idea.

“It’s too close to Disneyland, which is a family resort,” Smith said. “I don’t care what they say about these casinos being family-oriented, they really aren’t.... It’s not a good fit.”

California has 107 federally recognized tribes, some of which have no land near population centers or no land at all. As a result, many have sought to purchase land near population centers to open casinos. Locales where Indians or their representatives have sought approval to open casinos include Compton, the San Diego County town of Jamul, the Bay Area city of Richmond, and in Rohnert Park near Santa Rosa.

The governor is expected to announce deals with five tribes this week authorizing them to open, or in one case, continue operating casinos.

The biggest deal involves the Lytton Band of Pomo Indians, which has plans for a 500,000-square foot casino complex, with as many as 5,000 slot machines, on 9.5 acres in the Bay Area city of San Pablo. It would be California’s first Las Vegas-style casino in a major urban area.

In exchange, the tribe will pay the state as much as much as 25% of its profits from slot machines and card games. The tribe also will gain exclusive rights to operate slot machines within a 35-mile radius.

If the deal wins final approval, the exclusivity clause granted to Lytton would block efforts by two other tribes from opening casinos in the city of Richmond, just south of San Pablo. The two small bands of Pomo Indians, including one that has no land of its own, have been seeking local, state and federal approval to open Bay Area casinos.

On Tuesday, George J. Maloof Jr., part of the family that owns the Sacramento Kings basketball team, said his family would help provide financing for the Lytton casino and participate in the facility’s management. The Maloof family owns the Palms Casino, a 95,000-square-foot casino with 1,800 slot machines off the Las Vegas strip.

The Maloofs also hosted a fundraiser for Schwarzenegger at a Kings game earlier this year and have donated $64,000 to one of his campaign accounts.

Once Schwarzenegger signs the deal, the Legislature will consider it and probably ratify it in the coming days. The U.S. Department of Interior also must approve the deal.

The exclusivity clause also would protect Lytton against Proposition 68, an initiative on the November ballot backed by card rooms and horse tracks.

The initiative could open the way for slot machines at Golden Gate Fields, a racetrack not far from San Pablo, and card rooms in Contra Costa, Alameda and San Mateo counties, all of which would be within the 35-mile radius. If voters approve it and courts affirm it, Lytton -- and other tribes signing deals with the administration -- would not be required to make its payments to the state.

Schwarzenegger has said he opposes Proposition 68 in part because it would expand casino gambling in urban areas. Though San Pablo is a short distance from Oakland and San Francisco, supporters of his deal with the Lytton band said Tuesday that the deal limits Bay Area gambling by blocking tribal casinos in Richmond.

In addition to nearing agreement with Lytton, the governor is expected to announce agreements with four other tribes, including the Buena Vista Rancheria, located outside the Sierra foothill towns of Ione and Jackson.

Additionally, the governor is nearing agreement with the Ewiiaapaayp Band of Kumeyaay Indians in San Diego County, which had been in a long-running dispute with the Viejas Band, which owns among the state’s largest casinos. In an apparent resolution of their dispute, the Ewiiaapaayp will construct the casino on a leased part of the Viejas reservation.

The Viejas-Ewiiaapaayp deal could be a forerunner to future casino projects.

“There is an interest in seeking to address the proliferation of casinos,” said Sollitto, the governor’s spokesman.

“Any proposal that might satisfy tribes that have a right to a casino, while minimizing the impact to the environment or communities, would be considered.”