Richmond’s casino plan clears hurdle

by Blanca Torres
Friday, July 31, 2009

The City of Richmond and the federal Bureau of Indian Affairs have completed the environmental impact report for a proposed $1.5 billion casino, hotel and resort development on a 415-acre site.

The controversial casino project is expected to generate close to $1 billion per year in revenue, create 12,000 permanent jobs and aims to raise Richmond’s cachet as a vacation destination. The developers estimate it would also raise more than $100 million per year in tax revenue for the city.

The site is a former Naval fuel depot on Point Molate, a small peninsula just north of the San Rafael-Richmond Bridge. Like many former base sites, it needs millions of dollars for infrastructure improvements and rehabilitation of historic buildings.

“We thought that the most viable redevelopment plan would be one that involved creating a five-star destination resort,” said James Levine, one of the partners of Upstream Point Molate LLC, which is developing the site. “There is a $100 million hurdle to do any development … It really had to be something that was profitable.”

The plan for the development includes a 240,000-square-foot casino, two hotels containing more than 1,000 rooms, 300,000 square feet of retail, 54 luxury cottages, 340 permanent homes and 170,000 square feet of business, entertainment and conference space. The site will also have a ferry dock with service to San Francisco as well as open space and hiking trails.

The Navy transferred 85 percent of the site to Richmond in 2003 with the remaining 15 percent coming sometime this year. In 2004, the city selected Upstream, which is made up of four partners, through a request for proposals and agreed to sell the team the site for $50 million.

Upstream then enlisted the Guidiville Band of Pomo Indians to work on a plan to turn the site into a casino-anchored resort. The tribe, which is part of the Guidiville Rancheria Tribe, does not have a reservation and can request to have land deeded as such by the federal government.

The developers have also partnered with the Rumsey Band of Wintun Indians, owners of the Cache Creek Casino Resort in Yolo County, who have agreed to finance the construction and manage the casino. Point Molate is a partly secluded section of the shoreline along the San Rafael Bay. Hills rising 500 feet provide a barrier from the rest of Richmond. It was settled as a fishing village, and was used as a shipping port and major wine production before Prohibition. The former Winehaven winery building is one of 34 historic buildings on the site.

The environmental impact report, several thousand pages in length, is as complex as the project. To make the casino happen, the developers will have to go through a complicated process of receiving approvals from the city, state and federal government. The land will be transferred from Richmond to the developers to the federal government, which will put it in trust for the Guidiville Band of Pomo Indians. That means the tribe has control of the land, but the federal government will own it.

The report looked at four development alternatives, including the one proposed by the developers as well as three others with different options such as a smaller scale development or leaving out the casino altogether. Other alternatives include turning the entire site into a park or leaving it untouched.

An economic impact study commissioned by the Bureau of Indian Affairs in March of 2008 was also included. The document, prepared by consulting firm Gaming Market Advisors, estimates that under the developer’s proposal the project would cost $1.5 billion to build resulting in a $3.9 billion benefit for the local economy. The document states that in the casino’s first full year of operations, projected for 2014, the development would bring in $959 million in revenue.

Levine said he is confident the project will reap that kind of revenue despite the current economic downturn. Unlike other large scale developments, the Point Molate does not have a major residential component.

“It’s a real challenge for people to take on these big projects,” he said. “We’ve come up with something viable.”

Opponents disagree.

Gayle McLaughlin, mayor of Richmond, has written editorials for the Contra Costa Times stating that gaming is not a stable industry and would encourage crime. Richmond is already considered one of the most crime-ridden cities in the East Bay.

A preservationist group, Citizens for East Shore Parks, filed a lawsuit last January claiming the city’s expedited transfer of the land to the developers was illegal. Patricia Jones, a spokesperson for the group, said the suit is ongoing and the group has not had a chance to fully review the environmental impact report.

The city plans to hold two community review meetings in August and September. / (415) 288-4960

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