Two lawsuits seek to stop a tribal casino in Sacramento County, California. One is by a casino watchdog group and two residents of Elk Grove, where the casino would be located. The other is by a group representing card clubs in the area—recently unveiled after operating anonymously for several weeks—which has been gathering signatures to put an opposition initiative on the ballot in the city.
Opponents of the $400 million off-reservation casino that the Wilton Rancheria, partnered with Boyd Gaming, would like to build in an unfinished mall in Elk Grove, in Sacramento County, have gone to court, claiming that the city violated the California Environmental Quality Act (CEQA) when it voted October 12 to allow the owner of the 35.9 acres to make it available to the tribe.
The lawsuit has been brought by Stand Up for California, a casino watchdog group, which is assisting two city residents who oppose the casino. The legal action would overturn a vote by the City Council that allows the Howard Hughes Corp., owners of the outlet mall to amend a development agreement with Elk Grove to sell the land near Highway 99 to the tribe to be put into trust as reservation land.
Howard Hughes Corp. wants to finish its mall on the rest of the property, using the casino as an additional draw for business. The lawsuit claims that the transfer of land without an environmental review would violate CEQA.
The second lawsuit is being filed by a law firm in Sacramento, Bell, McAndrews & Hiltachk, which represents a client, which wants to overturn the city council’s decision by putting a citizens’ initiative on the ballot. The group, Knighted Ventures LLC, which had been anonymous before now, has collected 14,800 signatures and turned them into the city clerk’s office on November 21 to have them certified. The city is still reviewing the signatures to certify that they are valid. Slightly more than 9,000 are required to qualify.
Both efforts have provoked a construction business group whose members would benefit from building the casino to strike back. The group, called Region Business, has filed its own petition challenging the technicalities on which the ballot measure is based, and asked a court to dismiss the initiative as invalid.
Region Business sent a letter to the Elk Grove city attorney’s office claiming that the petitions are invalid because, says the letter, the initiative failed to include the text of the city ordinance that shows the original development contract with the Hughes Corp.
Before Knighted Ventures LLC, was revealed as the proponents of the petition, Region Business had also filed a complaint with the state’s Fair Political Practices Commission (FPPC) that claims the group should have filed financial campaign disclosure documents identifying themselves, by now. State law requires that political groups identify themselves once they have spent more than $2,000 on an election campaign.
And about the time that Region Business filed its complaint, Emeryville and Los Angeles-based Knighted Ventures filed its campaign documents with the FPPC. This fact caused the commission to dismiss Region Business’s complaint.
Knighted Ventures is connected with a card club operator in Sacramento, Silver F. Inc., which owns four card clubs in Northern California, including two near Sacramento. One of those, Parkwest Casino Lotus, is 15 miles from Elk Grove. Several employees wearing Knighted Services badges work in the casino. Knighted Ventures offers financial services and employees to such casinos. A spokesman, Roger Salazar noted that 14 employees of the company are Elk Grove residents and have a stake in whether a casino is built there. Also, the company has a “marked interest” in whether a competing casino is built, he said.
California card clubs are legally prevented from offering anything type of gambling except for card games—and they aren’t allowed to actually accept the bets for them. Instead they host the games and charge a fee. This places them at a considerable competitive disadvantage to Indian casinos, which can operate like Las Vegas casinos.
Elk Grove Mayor Gary Davis, who supports the Wilton Rancheria’s efforts, said he was angry that a “fraudulent, self-serving” competing card room was trying to block the casino. He pointed out that the city has wanted to develop the mall for many years. “Hopefully, Elk Grove voters will see this for what it is,” he said.
Tribal Chairman Raymond Hitchcock told the Sacramento Bee: “It would be unfortunate and misleading to the citizens of Elk Grove to discover that out-of-town cardrooms are behind the campaign to kill the mall.”
Now that the city knows who is behind the petition efforts, it could toss aside the mall Development Agreement entirely. Some critics argue that the agreement should have been revised or dropped years ago because it is 1) too restrictive on the property and 2) requires the mall owners to take all the actions to develop the property.
The Elk Grove News in an editorial wrote last week: “It would seem that the whole Agreement is long overdue for an overhaul because it relied on the mall to set the surrounding wheels in motion, and we know Regal Theater Group has also filed a lawsuit against HHC for their lack of progress. Without a DA encumbering the property, the casino is free to move forward in their application process.”
Ending the agreement would also, presumably, short circuit the initiative. The editorial also points out that the tribe could drop the mall as a potential location and find another piece of land in the city, with the knowledge that the city council would probably support them, because of the jobs and commercial activity the casino would generate.
The newspaper concludes: “Undoubtedly there are many other ways to bypass the lawsuit and referendum just waiting to be discovered by the team of legal experts representing the City, HHC, and Las Vegas-based Boyd Gaming, who is underwriting the Wilton Rancheria venture. We all know a 100-acre City-owned hayfield, aka Field of Dreams, that would let the City off the hook in having to explain why the soccer stadium and County Fair is unlikely ever to happen!”
For any casino to materialize, the tribe must apply to the Bureau of Indian Affairs to put the land into trust. Hughes would then finish developing the mall, which has languished incomplete for years. An earlier developer, General Growth, abandoned work on the mall in 2008.
Hughes has said that the casino is vital to the success of the mall.
