If there was ever a city that needed to roll the dice and get lucky, it's Richmond. Facing problems of poverty, crime and budget deficits, the city really could use a new pair of shoes.

The city's plight might explain why the City Council recently made a controversial deal with an Indian tribe to allow the development of a casino on prime real estate on San Francisco Bay.

Whether the project ever gets built is questionable. But Richmond is already receiving money it can spend now, part of a $15 million option package that is to be paid over four years. The city stands to make a total of $50 million from sale of the property, as well as increase its tax base and create employment for local residents.

But already, two California Environmental Quality Act lawsuits challenging the proposed $800 million development at Point Molate have been filed. Still, the developers are footing the bill for the city's legal fees, so there appears to be little downside for Richmond's gamble.

Richmond came into possession of the 320-acre parcel on the bay in 2003, after the U.S. Navy closed its operations there. The Navy used Point Molate as a fuel depot and is now cleaning up environmental contamination. The Navy expects to be finished with cleanup by 2009, but developers hope to speed the effort.

The parcel also sits next to ChevronTexaco's Richmond refinery. ChevronTexaco bid for the property, but the Richmond City Council chose a casino deal proposed by the Guidiville Band of Pomo Indians. The Native American tribe is working in partnership with Harrah's and a group called Upstream Point Molate, headed by Bay Area developer Jim Levine. ChevronTexaco proposed light industrial development on the land, and was expected to use the land as a buffer for its refinery. ChevronTexaco offered the city $55 million up front, plus $1 million annually for 25 years.

But the winning developers offered more, at least in the minds of the city council members: the promise of more than 4,000 jobs and tax revenues from a 225,000-square-foot gaming complex to be operated by Harrah's, along with four hotels containing 1,100 rooms. Expected to offer competition to Nevada's gambling industry, the project also is to include 300,000 square feet of retail space, 15 restaurants, an indoor theatre and a convention center. Upstream plans to retain existing historic buildings on the site, including an old winery building that will house the casino.

Not everyone wants to see intense development on the waterfront site. Nearby plots of land are already parklands, and part of a trail envisioned to ring all of San Francisco Bay crosses the property. After the City Council approved the project in November, Citizens for East Shore Parks and the East Bay Regional Parks District filed separate but similar CEQA suits. The lawsuits claim that the city did not perform a thorough environmental review before agreeing to sell the property.

“There's been no serious study of the issues,” said Robert Cheasty, president of Citizens for East Shore Parks and former mayor of the nearby City of Albany. Cheasty said community discussions at the time of the base closure never included a proposal for a casino in the old winery building, which he said would “totally dominate the waterfront.”

But developer Levine said all 33 acres of the waterfront will remain undeveloped, and the proposed development will include trails, parks and open space. Only a 90-acre portion of the entire property will be developed in the existing footprint, he said.

“In the development world, you get sued all the time and you keep moving,” Levine said.

Point Molate is being billed as a destination resort. An existing Navy pier on the property is to be used for a proposed ferry service that would whisk passengers from San Francisco to the casino.

Upstream paid the city of Richmond the first $1 million installment in December. It is money the city can use, having laid off 250 employees in 2004 due to a $12 million budget shortfall. A state audit released in December blamed the shortfall on the city's spending more money than it took in after increasing employee salaries and retirement benefits.

Councilman Tom Butt was part of the 6-2 council majority voting for the deal with Upstream. He said the site's “incredible views” would make the property a destination resort. “The bottom line is they're going to pay us $15 million for options to develop the property,” he said.

If the property cannot be developed as a casino, Upstream has agreed to develop the property in a mixed-use fashion that includes retail, a hotel and 800 housing units. Levine said the area's proximity to the ChevronTexaco refinery does not pose a problem because of a 500-foot hill that separates the two parcels. Ninety percent of the time, Point Molate is upwind of the refinery, he noted, and there is already housing downwind of the refinery.

Butt said residents have complained about the increased traffic, crime and undesirable newcomers the casino could attract. But he said the city needs the income for $200 million in street repairs and to address its 10% unemployment rate in poorer sections. One-third of the jobs created by Upstream are to go to the city's most needy residents.

The project needs to undergo environmental review at both the federal and state levels, which Levine expects to begin soon. Additionally, the Guidiville Band needs approval from the federal Bureau of Indian Affairs (BIA) before the tribe opens a casino, and BIA approval typically is neither quick nor automatic. The band must also complete an agreement with state officials, which could be even more problematic.

The problem is that Gov. Arnold Schwarzenegger has stated he will not allow another casino to be located within 35 miles of a casino in San Pablo, where a different tribe wants to build the largest gambling hall in the state. The San Pablo site is less than five miles from Point Molate.

But Levine said the exclusivity right for the San Pablo casino does not apply to his project because the Guidiville Band has a federal court order granting the tribe a restored land claim. Although the tribe has historic ties to land in Lake and Mendocino counties, federal legislation passed a few years ago gave the tribe the right to restore their land in Contra Costa County.

Further complicating the Indian gambling picture is the proposal of another tribe, the Scotts Valley Band of Pomo Indians. That tribe has proposed building a separate casino in North Richmond with 2,000 slot machines.

Tom Butt, Richmond City Council, (510) 236-7435.
Robert Cheasty, Citizens for East Shore Parks, (510) 525-1000.
Jim Levine, Upstream Point Molate, (510) 652-4500.
The cases: Citizens for the East Shore State Park v. City of Richmond, et al., Contra Costa County Superior Court No. MSN04-1657; East Bay Regional Park District v. City of Richmond, Contra Costa County Superior Court No. MSN04-1698.