Reevaluating Petaluma's Casino Strategy

The Press Democrat published a story today based on an interview with Harvey Hopkins, the Chairman of the Dry Creek Band. This provides an opportunity to reevaluate the City of Petaluma’s strategy for fending off this casino.

Chairman Hopkins says the Dry Creek wants to construct sports fields on the land. Cities construct ball fields as a public service; ball fields are not run as private enterprises. Further, Petaluma already plans on building multiple all weather sports fields at an East Washington site in 2014.

Chairman Hopkins also discloses the desire to build a hotel on the site and says it is to accommodate spectators and players for the ball fields. Even given that more and more adult and kid teams travel on weekends, would that really support a hotel seven days a week?

Chairman Hopkins insists that the Dry Creek doesn’t want to build a new casino but then qualifies his statement by saying "at this time." It is pretty obvious that if conditions change, that is going to change.

So let’s look at his business assumptions. Chairman Hopkins predicts that River Rock could lose up to "25 or 30 percent" of its revenue. That is severe, but my guess is that the actual change will be even more severe. River Rock Casino is 33 miles and 40 minutes further driving time from San Francisco and Oakland than the new Graton Casino. The article didn’t state where River Rock customers live, but my guess is that most come from San Francisco, Oakland and the core Bay Area. Those customers will welcome a 33 mile shorter drive and saving 40 minutes each direction. My prediction: River Rock will lose 50 to 60 percent of their business, and will not be able to survive.

So while the Dry Creek might not have plans for a casino in Petaluma "at this time," once River Rock becomes unprofitable, plans will change quickly. At that time, the Dry Creek will want a casino at its Petaluma site and will push hard to get it.

Chairman Hopkins argues that financing would be difficult to secure. However, their existing bondholders have an easy decision to make. If they do not step up to finance a new casino, River Rock is likely to default. On the other hand, if the bondholders do step up to finance a new casino, the new casino will be the closest to the core Bay Area, 55 minutes closer than River Rock and 15 minutes closer than the Graton Casino, and will be very profitable. The bondholders will be repaid on their new investments and on the old.

Chairman Hopkins argues that it takes many years to get a casino. True, but this one has already been in process since 2005. My prediction, they could have approvals in three years and be up and running in four years.

Petaluma hopes that by denying water and sewerage utilities to the site, they can prevent development. Chairman Hopkins’ reply is that they will just dig wells and process their own sewage.

Graton Indian Chairman Greg Sarris weighed in with the comment that the site is "totally out of their territory." Chairman Sarris forgets that Dry Creek was an intact band as of 1900 whereas his tribe was at best an amalgamation of scattered Indians that had no organization. (Further, let’s not ignore the irony of Greg Sarris saying this in face of all the evidence that Mr. Sarris has no Indian heritage whatsoever). If anything, Dry Creek is going to be able to argue that they are a real tribe and were unfairly impacted by Graton.

Mr. Sarris does raise a valid point. Why do the Dry Creek need to have this land taken into trust. Not to have a baseball field. Not to have a gas station. Not to put up a few houses. The only reason is so they can circumvent state and local laws. Whether it is for housing or a casino, they want to circumvent local laws.

The City Council to date has taken the path of least resistance. They say maybe the Dry Creek will not pursue a casino. That is a false hope. They also want to ally with the Graton, and let the Graton stop the Dry Creek. No city around the country has prevailed with that strategy. The City Council needs to be proactive. The Dry Creek casino is clearly coming down the road, and the only way to prevent it is to stop the Graton Casino.