United States: Gaming Legal News - March 27, 2014 • Volume 7, Number 8

CASINO LOCATION IMPACTS LONG-TERM SUCCESS

By Dennis J. Whittlesey

Location, location, location is a well-established mantra in the real estate business. Tribal casinos are not exempt – particularly in California, where tribal casinos are a dominating influence in the state's gaming industry (card rooms being the other major gaming industry). The impact of the Graton Resort & Casino in Rohnert Park, California, on the River Rock Casino on the Dry Creek Rancheria is a case on point. The River Rock Casino is some six miles west of the Geyserville, California, exit on U.S. Highway 101 on a two-lane road and up a narrow driveway to the top of a hill overlooking the Alexander Valley wine country. While the setting offers sensational views, it is not easy to get to. However, for 12 years it was the only casino in its service area. As a result, its location was of little significance until the Graton casino opened last November.

The Alexander Valley is one of California's most productive grape-producing valleys and the home of some of the finest wines produced anywhere in the world. The land owners long ago organized as the Alexander Valley Association ("AVA"), and the organization has been an important and effective voice for the valley landowners and their primary industry. When Dry Creek first announced its intentions to develop a casino, the AVA leadership recognized that the Rancheria location was troublesome for many reasons, the most important of which was potentially heavy traffic through the pastoral community of Geyserville and the difficult travel for both cars and large trucks serving the casino along the two-lane road and up the hill on which the Rancheria was located. The AVA suggested that the casino be located on Highway 101 and identified available off-reservation sites. The Tribe understandably wanted to develop its casino project within the boundaries of the Rancheria, and with that in mind, the project was developed on the Rancheria hill, which required the development of water and sewer service, as well as a major construction project to "stabilize" the hill itself so that the casino facilities could even be constructed. The "hill stabilization" project alone cost the Tribe and its investors an additional $15 million.

Geyserville is some 30 miles north of the Graton casino in Rohnert Park, meaning that the Graton casino is more convenient to people in the high population areas of Marin County and San Francisco to the south. The Graton casino and resort also offers many drinking and dining venues – including several restaurants opened by celebrity chefs from the Bay area, as well as a resort hotel and extensive gaming stations throughout the property. And patrons save at least 40 minutes' drive time each way on the multi-lane U.S. Highway 101, which Graton directly abuts. The impact of Graton on River Rock has been significant. It reinforces the need to include in long-range planning for casino development the three key ingredients for any project placement: "location, location, location."

Prior to the Graton grand opening this past November, the Dry Creek Pomo enjoyed a 12-year monopoly on gaming in the immediate vicinity and had the closest Highway 101 gaming facility to Marin County and San Francisco. During that time, the casino was so prosperous that the Tribe was making per capita payments in amounts reported to be $600 monthly to each of its 640 tribal members, who previously had little economic opportunity. The revenues for 2010 (the last year for which financial data is available) were reported to be $124 million, and River Rock employed more than 600 people. The Tribe itself had more than 60 full-time employees.

However, glory days do not always last. Since the Graton casino opened, the River Rock revenues have declined. Tribal officials state that their revenues have dropped by 30 percent. It has been asserted that the actual drop is greater. In any event, more than 100 of River Rock's employees have moved to Graton, and the tribal employment has fallen from 60 to a reported "handful" of staff members. Also, the per capita payments are now reported to be substantially lower than what they were only a few months ago. Adding to the economic troubles facing the Tribe is the report that it has an outstanding debt of $150 million owed to bondholders.

The Dry Creek Pomo is now disenrolling members. One of the disenrolled Dry Creek members is the former Tribal Chair who oversaw the planning, construction, and development of River Rock. A recent notification of another round of disenrollments has been circulated, and among the next 75 to be expelled are the two daughters of that former Tribal Chair. Fewer tribal members typically equates to larger per capita payments to the remaining members. This is a pattern of conduct that has occurred within several tribes experiencing economic downturns in casino operations.

As already noted, the 12-year run was wildly successful for the casino and the Tribe. However, the inevitable development of competition has become reality. The development of Graton to the south on Highway 101 will soon be matched by a smaller tribal casino proposed for Cloverdale, which is only 9.5 miles north of Geyserville and also abutting Highway 101. Yesterday's "great" location can quickly become today's "challenging" location, and this underscores the need for careful consideration of potential future competition and the selection of the best available site for a casino development.

GLENDALE CITY COUNCIL SOFTENS STANCE ON TOHONO O'ODHAM CASINO

By Patrick Sullivan

After years of losses in court and an estimated $3 million in legal fees, the Glendale, Arizona City Council appeared to ease its opposition to the location of an Indian casino in Glendale within the Phoenix metropolitan area and voted to begin formal negotiations with the Tohono O'odham Nation regarding the proposed West Valley Resort and Casino, which is projected to bring $300 million to the financially troubled city.

"We want to have a casino and resort near Glendale. It's going to bring people into Glendale who will spend money, and we desperately need that. We're so broke," Councilwoman Norma Alvarez told local reporters. The City's series of legal challenges and defeats, outlined below, have monopolized the City Council's time and burned through its legal budget, and after a series of positive informal negotiations, the Tribe and the City appear closer to finding common ground.

The Council also decided in a narrow 4-3 vote to withdraw its support for HR 1410, Arizona Congressman Trent Franks' federal legislation introduced to block construction of any tribal casinos in the Phoenix area, including the Glendale project, until 2027 when the existing Arizona gaming compacts expire. The withdrawal of the City's support for Franks' bill may ensure that the bill does not become law.

Glendale Casino Timeline:

1960: Federal dam projects flood large parts of the Tohono O'odham Nation reservation near Tucson.

October 20, 1986: Congress enacts the Gila Bend Indian Reservation Lands Replacement Act of 1986 to compensate the Tribe for its loss of land. Section 6(d) of the Act required the Secretary to accept land into trust in any of three counties, including Maricopa County, home to Phoenix and Glendale, but not "within the corporate limits of any city or town."

November 27, 2001: City of Glendale adopts Ordinance No. 2229 annexing unincorporated Maricopa County land completely surrounded by the City of Glendale.

May 28, 2002: After a landowner's challenge of the annexation in Arizona court, the City subsequently passes Ordinance No. 2258 "abandoning" the annexation.

November 5, 2002: Arizona voters pass Proposition 202 authorizing the State to enter into Class III gaming compact renegotiations with Indian tribes.

January 24, 2003: Secretary of the Interior approves Tohono O'odham Class III gaming compact.

August 21, 2003: Tribe anonymously purchases 135 acres of the unincorporated land within Glendale city limits, a prime casino location with access to the large Phoenix market.

January 28, 2009: Tribe submits application to Bureau of Indian Affairs to acquire 134.88 acres of Tribe's Glendale land into trust status.

January 29, 2009: Tribe publicly announces intention to build a casino at the Glendale site. Casino opponents charge that the Tribe had promised to limit off-reservation gaming in metropolitan areas in talks prior to Proposition 202 and the 2003 compact.

June 23, 2009: To prevent the pending trust acquisition, the City adopts Ordinance No. 2688 deeming portions of the Tribe's land to be incorporated into Glendale as of 2001, arguing that its own reversal of the 2001 annexation never became final.

March 10, 2010: Superior Court of Maricopa County grants summary judgment to City of Glendale holding that the 2001 annexation was valid and effective.

March 12, 2010: Tribe amends its trust application to ask BIA to proceed with 53.54 acres and hold the application for the annexed portions of the land in abeyance until the annexation issue was resolved.

July 23, 2010: U.S. Assistant Secretary of the Interior - Indian Affairs issues decision to accept 53.54 acres into trust, determining the land met all the requirements of the Gila Bend Act as the land is not "within" the city limits of Glendale, but withholds decisions on eligibility of the land for gaming.

February 3, 2011: Arizona Court of Appeals reverses the March 10, 2010, grant of summary judgment in favor of Glendale, holding that the 2001 annexation never became final and orders the City to pay Tribe's legal fees.

March 3, 2011: U.S. District Court for the District of Arizona grants summary judgment in favor of the United States in challenge brought by the City of Glendale and Gila River Indian Community, concluding that the Secretary of the Interior reasonably applied the Gila Bend Indian Reservation Lands Replacement Act when he accepted the Glendale land into trust.

September 11, 2012: A split panel of the U.S. Court of Appeals for the Ninth Circuit affirms the District Court's March 3, 2011, order granting summary judgment to the United States in Gila River et al. v United States. The dissenting judge called the decision by the Secretary to accept the land "an extraordinary assertion of power."

April 11, 2013: Congressman Franks introduces federal legislation, entitled "Keep the Promise Act of 2013," prohibiting gaming on the Glendale land.

May 7, 2013: U.S. District Court for the District of Arizona rejects claims by State of Arizona that the Tribe's 2002 gaming compact prohibits new casinos in the Phoenix metropolitan area, rejecting the State's claim that the Tribe misled voters in a ballot initiative allowing the compact and secretly planned to build in Glendale. The court orders additional briefing on the State's claim that the Tribe breached an oral contract to not build the casino.

June 25, 2013: Arizona federal judge rules for the Tribe on the remaining breach of contract claims, holding that there was no agreement in the compact or enforceable oral agreement that the Tribe would not open a casino in the Phoenix metropolitan area.

July 9, 2013: Tohono O'odham Nation moves the Arizona federal court for an award of its attorney's fees of over $4 million.

The support of the City and the defeat of HR 1410 in Congress would remove the most significant political hurdles for the Tribe. The prime location in Glendale and direct access to the large Phoenix market would guarantee success for the project. It would also guarantee fierce competition for the

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Michael Lipton, QC
Kevin Weber
Similar Articles
Relevancy Powered by MondaqAI
Dickinson Wright PLLC
Dickinson Wright PLLC
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Dickinson Wright PLLC
Dickinson Wright PLLC
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions