Sacramento Business Journal
Mark Anderson
Staff Writer
With casino-based economic development projects, other local tribes have moved from poverty to places of wealth and power, becoming some of the largest employers in Yolo, Placer and El Dorado counties in recent years.
Now the only Native American tribe based in Sacramento County is taking its shot at the casino business.
The Wilton Rancheria is proposing a $400 million resort just off Highway 99 north of a partially developed mall. The gaming floor would have 2,000 slot machines plus table games. The property would feature a 12-story hotel with 302 rooms. It also would include a spa, fitness center and one of the region’s largest convention centers at 50,000 square feet. That convention center could be configured to hold 3,200 people for concerts or 1,200 for banquets.
The Bureau of Indian Affairs is reviewing public comments on the project and preparing an environmental impact statement, which is expected to take several months.
Elk Grove has neither endorsed nor opposed the casino project, said Darrell Doan, economic development director with Elk Grove. “We’re keeping an open mind on it.”
Elk Grove Mayor Gary Davis said he is excited about the prospect for jobs but reiterated that the city hasn’t decided whether to endorse the casino.
The city may not have a lot of say about the project anyway, Davis said, given that it would be developed on trust land, which makes the property a sovereign domestic nation.
Adding a large employer
The casino is likely to easily find a market, attracting gamblers from all over Northern California, said Brian Larson, principal with Halo Hospitality, a Sacramento-based consulting firm. He added that gamblers tend to check out new casinos, which helps with the opening of any new venue.
“It will be good for Elk Grove,” he said. “It will get Bay Area people to visit Elk Grove for sure, which they might not have done otherwise.”
Although the new casino might take some initial business from its peers in the Sacramento region, it’s more likely over the long term to intercept more Northern California gamblers from going to Lake Tahoe or Reno, Larson said.
The casino is expected to take two years to build, creating 1,600 construction jobs, and then employ about 1,750 when it’s opened. That would make it the third-largest employer in Elk Grove, behind only the local school district and Apple Inc.
Elk Grove residents have voiced concerns about the casino at a town hall meeting and at a City Council discussion. Their worries include increased traffic, crime and emergency service calls.
“The casino was tastefully rendered, but I still don’t want to see that from my backyard,” said Melanie Hoblitzell, who lives just north of the proposed casino site. She grew up in Elk Grove, moved away for her career and returned with her family last year, buying a home in what she thought would be a quiet neighborhood.
“If I knew there was going to be a casino there at that time, we would not have bought this house,” she said. “I don’t think this is the right fit for the Elk Grove community. It’s not a family thing.”
Location bodes well for casino
The success of tribal casinos in California has been varied, but generally the ones on major transportation routes or near population centers do well, saidDavid Quintana, a partner with lobbying firm Gonzalez, Quintana & Hunter LLC and political director with the California Tribal Business Alliance.
“It all depends on where God put the tribe, and how close the land is to the highway,” Quintana said.
The Elk Grove location has “the potential to be huge,” Quintana said. Not only is it on a major highway, but “they are near a lot of existing rooftops and in the midst of a growth corridor.”
California has 110 federally recognized tribes, and half of them currently have casinos.
The Wilton tribe has more than 700 members, 400 of whom are adults. About 62 percent of tribal members live in southern Sacramento County, and 60 percent of their school-age children attend schools in the Elk Grove Unified School District.
“This is our home. This is where we live,” said Wilton Rancheria tribal chairman Raymond Hitchcock.
Wilton Rancheria was one of many groups that the federal government stopped recognizing as tribes in 1958, as part of an effort to assimilate Native Americans. With that, the rancheria’s property was divided among its members. That came with tax assessments on the real estate, and no government support, Hitchcock said.
“One day we were Indians, and the next day we weren’t Indians,” Hitchcock said.
As with many tribes across the country, many members of Wilton Rancheria were trapped in a cycle of poverty.
Even now, about 62 percent of the tribe’s adult members are unemployed.
Learning “from the best”
The tribe only was restored to federally recognized status in 2009, after many years of effort. Since then, it has been applying for federal grants for education and health programs to help its members.
The casino could make the tribe self-sufficient, Hitchcock said. “We can move past surviving to thriving.”
The opportunity to develop casinos has been available since 1988 when Congress passed and then-President Ronald Reagan signed the Indian Gaming Regulatory Act. It allows tribes to conduct gaming on tribal lands for economic development.
Because gambling can be so profitable, it attracts financing for casino resort projects, like the one that Wilton Rancheria is planning.
“We feel there is great potential in Elk Grove,” said David Strow, spokesman for Boyd Gaming Corp., which is Wilton Rancheria’s development partner for the casino project. “We view this as a compelling market for us. That is why this is our first casino in California.”
The company operates nine casinos in Las Vegas and is in the process of buying three more in the Las Vegas area. Boyd (NYSE: BYD) earned $47.2 million last year on revenue of $2.2 billion.
The company will find the financing for the casino and then operate and manage it under a seven-year contract. Boyd will take about 25 percent of the casino’s profits during that period.
“We don’t know how to run a casino or run a hotel,” Hitchcock said. “We’re going to learn how to do it from the best.” .
Under federal law, the partners that help tribes fund and develop casinos get seven-year management contracts that begin on the day of the casino grand opening. After seven years of outside operations and management, the tribes can opt to manage the casino resorts on their own. Nearly every tribe with a casino in California has gone independent after the seven years.
Spurring surrounding development
Tribes also often continue investing in their resorts. That’s true with both the Yocha Dehe Wintun Nation, which operates the Cache Creek Casino Resort in Yolo County, and the United Auburn Indian Community, which operates the Thunder Valley Casino Resort in Placer County. Both ventures started with casinos and then went on to develop hotels, spas and parking structures that cost hundreds of millions of dollars. Those tribes are still expanding their properties and adding more hotel rooms.
The Wilton Rancheria may be hindered in its ability to expand its casino property, however. The entire project has to fit on a 36-acre parcel within the Outlet Collection at Elk Grove, a partially developed mall. Hitchcock said the casino and related investments in the area could spur development at the long-dormant mall.
Work halted on what used to be called the Elk Grove Promenade project in 2008, leaving a series of large empty buildings. The Wilton Rancheria announced in June that it wants to develop its resort on a site within the mall property, which is owned by the Howard Hughes Corp.
After the tribe exercises its option to buy 35.9 acres in the mall, the federal government would put the land into trust, in essence making it tribal sovereign land and eligible to host gaming. The tribe would then negotiate a pact with California’s governor.
“While there is a lot of talk and reaction to the Elk Grove casino plans now, it is important to remember that this casino is years away from opening,” said Doug Elmets, spokesman for the United Auburn Indian Community, which owns Thunder Valley Casino.
“We are assessing what effect this casino concept will have on the market,” Elmets said. “One thing for sure is that no other casino is going to shut down because of this one.”
Sacramento-area casinos
Wilton Casino
- Tribe: Wilton Rancheria
- Opening partner: Boyd Gaming Corp.
- Casino opening: TBD
- Hotel opening: With casino
- Number of rooms: 302
- Miles from downtown: 15
Cache Creek Casino Resort
- Tribe: Yocha Dehe Wintun Nation
- Employees: 2,180
- Opening partner: None
- Casino opened: 1985 as bingo parlor, 1993 as casino
- Original investment: $200 million
- Hotel opened: 2004
- Number of rooms: 200
- New rooms proposed: 377
- Golf course added: 2004
- Miles from downtown: 46
Thunder Valley Casino Resort
- Tribe: United Auburn Indian Community
- Employees: 1,875
- Opening partner: Station Casinos
- Casino opened: 2003
- Original investment: $215 million
- Hotel opened: 2010
- Number of rooms: 297
- New rooms proposed: 111
- Golf course added: 2012
- Miles from downtown: 30
Red Hawk Casino
- Tribe: Shingle Springs Band of Miwok Indians
- Employees: 1,250
- Opening partner: Lakes Entertainment Inc.
- Casino opened: 2008
- Original investment: $245 million
- Miles from downtown: 38
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