LAKE COUNTY – Two local Indian tribes have confirmed that a Bay Area developer in negotiations to purchase Konocti Harbor Resort & Spa has contacted them about partnering in an off-reservation Indian casino there.
District 5 Supervisor Rob Brown said in early January that he had received information that Darius Anderson and his firm, Kenwood Investments, were negotiating with five local tribes to form a compact and locate a casino at the resort.
Anderson is currently involved in a purchase agreement to buy Konocti Harbor form the UA Local Convalescent Fund.
Two tribes, Clearlake Oaks' Elem Nation and the Habematolel Pomo of Upper Lake, have confirmed that Anderson approached them about being part of a Konocti Harbor casino.
Repeated calls to Darius Anderson and his business partner, Jay Wallace, have not been returned.
Elem Nation Tribal Chair Ray Brown Sr. said Anderson approached Elem more than a year ago about the plan, but that he didn't feel comfortable with it.
“There was too much demand on our side,” said Brown, explaining that Anderson wanted them to come up with a large amount of money for the deal.
Brown said his tribe already has a casino compact in the works, and that the Elem casino will be located at the colony in Clearlake Oaks.
There was discussion between Brown and Anderson about using a paddle wheel boat to transport guests between the casinos, but Brown said the entire plan “just got too far out of reach.”
Brown also voiced concerns about traffic and roads in the area of Konocti Harbor, and questioned whether increased traffic from a casino there would be feasible.
Eventually, Brown said, he backed off of negotiating with Anderson, but not before Anderson made several big promises – including buying Rattlesnake Island for the tribe. The 53-acre island is listed for sale on the Internet for $2,500,000.
That property, currently owned by John Nady, is held as a sacred site by the tribe. Jim Brown, Ray Brown's brother and a gaming commissioner, said the tribe does not plan to site a casino on the island.
Ray Brown said his tribe is going forward with its own casino plan. “It's not going to be a big one,” he said. “We don't want to go big yet.”
He said he has a meeting with an investor next week to discuss the Elem casino. Brown said as soon as funding is in place he estimates it will take about 18 months for construction.
Jim Brown said he had met Anderson several times in person, and that Anderson also visited the tribe's office in Clearlake Oaks. He reported that Anderson told tribal members that, due to his contacts with the state Democratic Party, he could get the plan “fast-tracked” and completed in a minimum of five years.
Jim Brown said a concern for the tribe was why Anderson was coming to a county where there were already several tribes with gaming plans.
However, he noted, “Under the compact, each tribe can have two casinos. A lot of people don't know that.”
Rob Rosette, an attorney representing the Habematolel Pomo of Upper Lake, said Anderson discussed the Konocti Harbor casino plan with that tribe as well during a few brief discussions between a year and a half and two years ago. Rosette said he didn't recall the exact context of those conversations.
However, the discussion didn't bear fruit, he said.
“Upper Lake was not a good match for that group,” said Rosette, explaining that the tribe wished to pursue its casino plan in Upper Lake, where the tribe has cultural ties.
The Habematolel casino would be located in Upper Lake on restored lands, said Rosette, which is a far different set of laws that Anderson's plan would work under.
Rosette said the Habematolel project is “going great,” and is making efforts to work responsibly with local government.
“It's a very good project, and that's because the tribe has acted like a good neighbor, and have conducted themselves responsibly,” said Rosette, adding that he believes the Upper Lake casino is “inevitable.”
His best guess is that the Habematolel casino will open for business sometime in 2008.
Other tribes say they haven't been contacted
Some other local tribes originally mentioned as being involved in the plan say they're not.
Bennett Wright, tribal administrator for the Scotts Valley Band of Pomo Indians, said he'd never heard of Anderson or Kenwood Investments, and that his tribe hasn't been contacted about a casino at Konocti Harbor.
The Scotts Valley Tribe is busy with a plan to locate a casino in Richmond, said Wright.
In November, the Richmond City Council approved a 20-year, $335 million agreement with the tribe to provide infrastructure and services for the proposed casino, even though it is located outside of the city's boundaries, according to a Contra Costa Times report.
The Contra Costa County Board of Supervisors, however, unanimously passed a resolution opposing gaming expansion in any part of the county, according to the Contra Costa Times.
Tracey Avila, Robinson Rancheria's tribal chair, said that tribe has not been contacted about the deal. Neither has the Pinoleville band of Pomos, according to their chair Leona Williams. Middletown Rancheria's tribal chair, Jose Simon, said they have not been contacted either.
Calls to Big Valley Rancheria and Potter Valley Rancheria were not returned. Marshall McKay, tribal chair of the Rumsey Band of Wintun Indians, who have Cache Creek Casino, also could not be reached.
Attempts to contact the Koi Nation of Lower Lake also were unsuccessful.
Local concerns arise over deal
The plan has generated considerable local concern in the past month, during which time Supervisor Brown began circulating a petition against a potential casino at Konocti Harbor.
He's also had the issue placed on the Feb. 6 Board of Supervisors agenda.
At that meeting, Brown plans to ask the board to approve a resolution in which the county will take a formal stand against Anderson's casino plan.
Brown also plans to take the matter to Washington, D.C. in March, when he's scheduled to discuss it with Congressman Mike Thompson and Sen. Dianne Feinstein's staff.
In a recent letter to Brown, Thompson stated, “I have a long-standing policy that tribal governments need to work with and secure the approval of any city or county government that would be impacted by the establishment of an Indian casino. I realize that this can be a lengthy process but community support is an essential element of successful legislation.”
On Jan. 24 both Brown and District 3 Supervisor Denise Rushing met with Cheryl Schmit, director of Stand Up For California, a group that studies gaming in California and its impacts on communities.
Schmit said it was a “good meeting,” with local officials asking a lot of good questions about the casino plan.
The Konocti Harbor plan, Schmit explained, is an off-reservation proposal, which would require gubernatorial concurrence, which she said she doubts would be given.
Gov. Arnold Schwarzenegger issued a May 2005 proclamation in which he said he would only gaming on newly acquired land in special cases. Those stipulations include not locating a casino in an urban area, having the support of local governments, there is way to prove the community's support such as through an advisory vote, and that the plan offers benefits apart from financial contributions to the state, community or tribe.
Darrel Ng, an assistant press secretary for Schwarzenegger's office, also referred to guidelines in the Indian Regulatory Gaming Act (IRGA), which generally don't authorize gaming on lands acquired by tribes after 1988 “unless the land acquired is within or contiguous to existing Indian land or to former land of the tribe if the tribe no longer has a reservation.”
The IGRA said those stipulations can only be waived if a casino project “would not be detrimental to the surrounding community under certain circumstances,” and if the governor agreed with the plan.
Schmit said it could still be done, but would need a congressional act or a claim of restored lands. “These are not easy alternatives,” she said.
She added, “I wonder what Mr. Anderson is really trying to do there.”
Columnist Matt Smith of SF Weekly, in two columns published in January, said he believes Anderson is drawing on his political contacts to push the deal through.
Smith points to the fact that Sen. Barbara Boxer wrote legislation restoring federal recognition to the Coast Miwok and Graton Rancheria in Sonoma County. At the time, her son, Doug, worked with Anderson at Kenwood Investments, which is now working on a Vegas-style casino for the Graton Rancheria which would be located in Rohnert Park.
Schmit said that plan is still ongoing, and that an environmental impact study is due. However, she noted, that tribe can only acquire the land for a casino under the restored lands stipulation, and Schwarzenegger stated in a letter last year that he didn't believe it met the restored lands criteria.
In the midst of all of this, Konocti Harbor is at the center of a federal lawsuit. Filed two years ago by the Department of Labor, the suit alleges that Local 38 of the United Association of Plumbers, Pipefitters and Journeymen – which controls the convalescent fund that owns Konocti Harbor – diverted $36 million in assets of five employee benefit plans to renovate and operate the resort.
The federal case is due to go to trial this spring.
In his columns on Konocti Harbor, Smith has hypothesized that Anderson is using the plan to help Lawrence Mazzola, business manager and financial secretary-treasurer of Local 38 and a well-connected San Francisco politico, out of the lawsuit's hot seat.
E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it..
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