Council OKs casino project

Citizen questions legality of backroom discussion, approval

Rebecca Neipp

News Review Staff Writer

Council OKs casino projectAfter nearly four years and deep-seated controversy, the casino proposed for development in Ridgecrest appears to be moving forward.

“The city of Ridgecrest and the Timbisha Shoshone Tribe are pleased to announce a resolution of all disputes between the tribe and the city,” reads a press release from City Manager Ron Strand, emailed to local media last Friday at 7 p.m.

To resolve the claims, the city has agreed to sell property in the business park, just south of the China Lake front gate, to developer Global Investment Enterprise for $5,500,000.

While the city has not yet discussed the item in public, the issue was on the agenda for closed-session discussion at the Jan. 15 council meeting.

Before the council went into private discussions with the city attorney and management, scores of residents approached the public microphone, expressing opinions reflective of the divided views on the casino. Attorney Keith Lemieux came out of closed session to declare “no reportable action” on the item.

However, Mayor Pro Tem Lindsey Stephens read a statement expressing her disappointment in the decisions being made outside of public view and the potential impact of those actions on the community. She then excused herself for the remainder of the meeting and left council chambers.

The item was first presented on an April 2016 agenda, listed as an action item for approval. Scores of residents packed City Hall, with many asking why such an impactful decision was scheduled for a vote with so little time for community education and input.

The casino solicited proponents who welcomed a potential demand-generator that promised jobs and entertainment jobs to the public.

Others pointed to studies that found negative economic impacts of casinos on small, remote communities.

Still others contested the placement of a casino for moral and religious reasons, though city officials noted that municipalities cannot restrict new developments on such grounds, but can only mitigate impact.

Because the casino would be owned and operated by a tribe — technically an independent government not subject to our laws — any money generated by the enterprise would not feed into traditional revenue streams. Historically, casinos also pull revenue from other local commerce.

To offset the costs of providing services and factor in potential loss of tax-base revenue, the tribe agreed to make payments to the city.

According to the city’s press release, Ridgecrest was able to modify some of the terms of the original MSA.

Phase I of the project will include construction of the casino, and Phase II will include development of a hotel and related amenities, said the city’s press release.

“The settlement agreement guarantees the city certain increases to the city’s mitigation revenues — even if the tribe never builds Phase II,” the press release continued. The city projects a $13 million increase in revenue.

“More specifically, the settlement agreement provides that if the tribe does not build Phase II by year three, the tribe’s annual minimum mitigation payment increases to $819,000 and the annual critical services payment increases to $388,000.” That total revenue is $1.2 million beginning in year four, says the city.

“The settlement agreement reduces mitigation payments for Phase I and II from 2 percent to 1.899 percent to account for the removal of fire service obligation (10.1 of 1 percent of valuation — same as county fire fund property tax formula) and provides that the tribe will be responsible to negotiate its own fire services with Kern County.”

Overall, the total anticipated revenue to the city over the course of 20 years is $30.2 million, says the press release.

The agreement settles disputes between the city and tribe and is conditional on the dismissal of collateral claims filed by the co-owner of the property, China Lake Properties.

“The agreement clears the way for the casino project to move forward,” says the release.

While the city has not yet hosted public discussion on the item, Strand’s announcement has been broadly circulated online to mixed reception.

“Thank goodness the city council didn’t try and move forward with fighting a losing battle that would have bankrupt the city!” posted Jennifer Wood Slayton. “We finally get moving forward with the jobs and entertainment options this will bring!”

“At least they got a better deal,” posted a Facebook user identified as “Moschitto Fam’ly.”

“Still not good enough for me to celebrate, but anything is better than the first one.”

The post goes on to say that the deal between the city of Hesperia with the tribe — a case that also went to litigation — was better than the one the city was able to broker.

“I still don’t like the location and I wish it was just like any other business, where the land is up for sale if it fails, rather than remaining sovereign territory. Lots of work — good and bad — for the city to come,” wrote Moschitto.

“Everything comes in balance; I call B.S. on both the big economy boom and the wrath of God as a result of the casino. For certain, the biggest winners are the developer and Vegas shareholders.

“That said, I do hope the wins for the tribe are funds to send their kids to Cerro Coso and a business that helps motivate them to success, not apathy.

“I also hope the city learns to stop making backroom deals in secret. This whole thing would have been far better if it was slower, transparent and negotiated by a more capable team early on. Only time will tell now.”

Mike Neel wrote a letter to the News Review challenging the legality of the city’s handling of the discussion and subsequent announcement relating to the casino land sale and MSA (see letter:

The sale is set to close before July 30, 2020.

The council voted in 2016 to approve the MSA and land sale. Escrow was set to close in October 2017 and later extended to October 2018. The council voted 5-0 to cancel the sale because the developer failed to deposit funds into the escrow account before the two-year deadline closed.

Pictured: When the casino was first introduced in 2016, citizens — both for and against the concept — packed City Council Chambers. — News Review file photo

Story First Published: 2020-01-31