Casino Along I-80 Artery May Divert Reno’s Lifeblood
By John Stearns - Reno Gazette-Journal
Put a $100 million casino a few miles outside Sacramento, let one of Las Vegas’ most aggressive gaming companies operate it and see what happens to the traffic from Sacramento and the San Francisco Bay area.
Now, throw in a snowstorm or the threat of unsettled weather over Donner Summit, especially on the critical weekends, and see how that affects visitors from Reno-Sparks’ two largest feeder markets.
By most accounts, the United Auburn Indian Community’s proposed casino -- which is not actually in Auburn, Calif., but just south of Lincoln, about three miles north of Interstate 80 -- won’t stop Reno-Sparks’ economic heart, but it will divert some of its blood flow.
Think of it like a fast-food restaurant where people might grab a quick bite to eat to relieve a food craving or, in this case, a gambling craving. For some, that might be their only gambling meal. For others, it might just reduce their hunger for Reno -- or maybe not.
“Our feeling is that Indian gaming is really a niche market -- that one casino in Placer County is not going to make or break Reno,” said Douglas Elmets, president of Elmets Communications in Sacramento and spokesman for the Auburn tribe. “If it does, then Reno ... is much more fragile than anybody would believe.”
That said, the Auburn tribe’s casino clearly has advantages. It’s located along Reno’s I-80 lifeline, and “it’s below the snow line,” said Elmets.
Hypothetically, if all goes perfectly, construction could begin as early as April or May and take about 14 months. “It’s a big hypothetical,” Elmets said of the ambitious time frame. There are numerous hurdles yet to clear and lawsuits could be filed that slow progress.
But no matter when the casino opens, even the tribe’s chairwoman, Jessica Tavares, wouldn’t give up trips to Reno. She’s visited the Cache Creek Indian Bingo and Casino northwest of Sacramento and “you can’t get on a damn machine to save your soul,” she said. “I’ll go to Reno first,” where there’s no wait, more variety and more of a destination experience. Casinos like the Auburn tribe’s I-80 project will be more convenience-oriented, she said.
Nevertheless, its proposed operator, Las Vegas-based Station Casinos Inc., is no slouch at providing the kind of lasting gambling experience that even Las Vegas’ savvy locals eat up. The company -- whose Clark County properties include the popular Palace, Boulder, Texas and Sunset stations -- is expected to churn out more than $1 billion in revenues this year and bring $77 million to the bottom line, according to one analyst’s estimates.
A hotel to help keep gamblers and their money a little longer, is expected to be in the casino’s future plans, but not part of the initial phase. Station would buy the land, finance all the construction and get a management fee of something less than 25 percent of revenues to operate the casino. The management contract would be for five-to-seven years, as prescribed by National Indian Gaming Commission regulations.
“I think it will be a very good location,” said Glenn Christenson, chief financial officer for Station. Christenson would not discuss the site’s revenue potential.
Industry analysts, though, believe that a casino at this location could gross as much as $150 million annually, with gaming revenues accounting for virtually all of that total, according to one source.
By way of comparison, the Eldorado Hotel Casino in downtown Reno had casino revenues of $113 million in 1999, and the Atlantis Casino Resort in south Reno had casino revenues of $48.3 million.
“This would be the closest casino to 1.4 million people in Sacramento,” Christenson said.
“There will be a strong local orientation, but we’ll also cater to those customers out of town,” he said. In Las Vegas, Station’s business is about 75 percent local, and 25 percent out of town, he said.
The tribe, however, is limited to 2,000 slot machines by its agreement or “compact” with the state of California.
For perspective, that’s about the same number as the Peppermill Hotel-Casino, with 2,092, and about 500 more than the Reno Hilton’s 1,516 slots. The Silver Legacy Resort Casino has the most slots in Reno with 2,249, followed by the Peppermill and then the Eldorado at 1,893, according to Wells Gaming Research in Reno.
“It’s a single property; it has limits on slot numbers -- that’s what really drives gaming revenue,” Christenson said. “We don’t think it’s going to have a major impact on northern Nevada just because of those limitations.” Reno and Lake Tahoe have other features that attract customers, “and this property (as a stand-alone casino) is not going to be able to compete from that standpoint.”
With all the ambitious plans, there are still some who are skeptical about the casino’s chances because of the tribe’s needs to put land in federal trust for the casino. The planned site comprises 49 acres in a grassy industrial area and must be put in trust before gambling can occur on the site -- a detailed process fraught with review requirements by federal, state and local officials.
Gov. Gray Davis has final word on the issue.
Putting the land in trust means that the United States accepts title to the land on behalf of a tribe. It exempts the land from all local zoning jurisdiction and taxation.
Howard Dickstein, a leading lawyer for Indian gaming tribes, said getting the land put in trust is a certainty -- the only question is when.
“The tribe’s been waiting for 150 years, so they’ll wait another 12 months if they have to,” Dickstein said.
In October, he estimated that the land could be in trust in six months, perhaps 18 if opponents are successful in requiring more environmental review.
“I think things are going well and we expect that this (land in trust) process will end early next year,” Dickstein said. “It’s proceeding, I think, favorably.”
The tribe currently has an option to buy the casino site for just more than $1 million, Dickstein said.
Carmen Facio, a realty officer with the U.S. Department of the Interior-Bureau of Indian Affairs in Sacramento, said that if the land is put in trust for the tribe, it will be the first time such an action has occurred in the state for gaming. Other land has been put in trust, but not for gaming, she said.
“It’s not something that’s easily done,” Facio acknowledged.
Nonetheless, there is a provision in the federal Indian Gaming Regulatory Act of 1988 that allows the move if the Secretary of the Interior, along with other nearby Indian tribes and the governor of California agree that it is appropriate.
Dickstein said the tribe is one of the few that fits within the Interior department’s exceptions for restoring land for gaming.
Elmets said the tribe’s case is strong. The tribe had a reservation at one time, but it was taken and sold off by the U.S. government in the 1950s when the government thought it was better for Indians to assimilate into society than be stuck on reservations, he said. But in 1994, Congress passed the Auburn Indian Restoration Act, which said the tribe can select land anyplace in Placer County for an Indian reservation.
Many of the tribal members now live in a depressed pocket of Newcastle, about 15 miles east of the casino site. While it’s casually referred to as the reservation, it’s really not Indian land or federal trust land, Elmets said.
The tribe has the congressional act on its side, plus agreements with Placer County and the city of Lincoln, all of which are expected to weigh in the tribe’s favor when the Interior Department considers its trust application, Elmets said.
The Auburn tribe’s agreements with local governments call for:
* Placer County: Tribal compliance with county ordinances, the environmental review ordinance and allowing the sheriff to enforce state criminal laws on trust land; the tribe is to pay about $458,000 a year to the county for five new deputies and a patrol vehicle; the tribe will pay to build a fire station and pay annual operating costs of $450,000 per year; the tribe will compensate the county annually for removing the land from the tax rolls; the tribe will donate $25,000 to a county open-space program in the first year and an additional $25,000 per year up to $100,000 per year; the tribe will pay for a new road and traffic mitigation in the area; the tribe agrees to a dispute resolution process through Sacramento Superior Court; and more.
* Lincoln: The tribe will pay the city: $1 million for sewage connection and ongoing fees; $1 million toward the development of the Lincoln Route 65 bypass project; $1,000 per call for fire-medical services; $37,500 per year for the indirect costs that the casino will have on city police; $25,000 the first year, $50,000 the second year, $100,000 the third year, $125,000 the fourth year and each year after for promoting cultural, social and youth activities; $50,000 toward the Western Placer Education Foundation Outdoor Learning Environment Project for educating youth on Native American culture; $15,000 the first year toward the Lincoln Library for developing a Native American book collection and $15,000 annually thereafter for developing, expanding and maintaining Native American and environmental collections or other library purposes; $30,000 a year to support economic development in the Lincoln area.
©2000 Reno Gazette-Journal
