Jamulians against the casino

A secret deal on Route 94 - Caltrans yields public rights to tribe on highway access

Caltrans and the Jamul Indian Village have agreed on a process to connect the driveway for the tribe's proposed casino to state Route 94. The agreement appears to yield significant amounts of public control over a state highway to a private entity.

The tribe argued in federal court that as a sovereign nation it did not need Caltrans' permission to widen and connect an existing driveway for a new use. It did not win, and withdrew the litigation on April 14. Inexplicably, Caltrans and the tribe negotiated an agreement that was signed on April 7. It was not filed as a court document, and interested parties were not provided copies. The arrangement was not disclosed publicly for two weeks, and then only announced at the request of this page. Parties such as the county still have not been briefed.

Tribal Chairman Kenneth Meza is not talking, and Caltrans division director Pedro Orso-Delgado only somewhat reluctantly. Orso-Delgado said the state achieved a major concession – the tribe's agreeing to the environmental regulation process.

The document lets the tribe determine what past usage of the driveway was and do its own study on what amount of traffic a casino of unknown size would produce. Caltrans' statewide policy is to direct new hookups to a public thoroughfare, in this case the county's Melody Road. This document does not even mention Melody Road.

Unspecified “environmental documentation” will be required. The tribe, it appears, will determine the preferred highway access point. The tribe must pay to mitigate traffic effects while Caltrans will be taking a hands-off approach to calculating the amount. In the event of disputes, the two parties can retain a private arbiter to make the decision. The taxpayers need never know.

Jamul Indian Village has spent hundreds of thousands of dollars widening its driveway without a connection permit, leading to speculation of a confrontation on a rural highway under blinking casino lights. Now, it appears Caltrans is doing the blinking.

Ignore, for the moment, the merits or demerits of a casino on tribal property in Jamul. That proposal seems to be in a dormant stage and financial backer Lakes Entertainment just wrote off $32 million in related losses.

The issue here is that Caltrans has a responsibility to guard public safety, and with an even hand. It did not capitulate to Peaceful Valley Ranch just across the highway, requiring the developer to funnel all access to Melody Road. What makes a 51-member sovereign nation any different?

Public safety should be paramount – especially on the byway that spawned the bumper sticker, “Pray for me. I drive 94.”

Two weeks ago we filed a motion on your behalf to intervene in JIV’s federal lawsuit against Caltrans. The purpose of our intervention was to prevent the federal court from ruling that Caltrans lacks authority to conduct a CEQA review of JIV’s encroachment permit application. In support of our motion, we filed seven declarations, a Memorandum of Points and Authorities, and a proposed Answer disputing JIV’s allegations.

We have accomplished our primary objective of preventing the federal court from ruling that Caltrans lacks authority to conduct a CEQA review of JIV’s encroachment permit. On Friday, April 3, JIV agreed to dismiss its lawsuit against Caltrans. Thus, the federal court will not be issuing any substantive rulings in the case that could undercut Caltrans’ authority.

SACRAMENTO – A U.S. Supreme Court ruling that rattled American Indian tribes across the country has raised significant new legal questions about the Jamul tribe's controversial bid to build a large casino 20 miles east of downtown San Diego.
The development comes as Jamul's financial partner put the odds of casino construction at 50-50 and said it won't happen for at least five years because of the credit squeeze and a legal fight over access to state Route 94.
The Supreme Court decision in Carcieri v. Salazar bars the secretary of the Interior from taking land into “trust” – a status that permits gaming – for tribes that were federally recognized after 1934.
Although the Feb. 24 ruling involved a Rhode Island tribe, some Indian law specialists say it could have greater implications in California, which has 108 federally recognized tribes – more than any other state and nearly 20 percent of the national total.
“It will have an intensified impact in California because there are so few historic tribes and there are a number of tribes that were recognized after 1934,” said veteran tribal attorney Howard Dickstein, who represents Pala of North County.
“It's going to require a lot of unraveling, of histories of specific rancherias and their status through the years, in ways the results of which are a little unpredictable.”
Jamul Indian Village Chairman Kenneth Meza likened the Carcieri decision to the federal government's history of broken treaties with Indian tribes.
“It was a terrible decision,” he said. “It sets us back 100 years.”
But Meza is sure the ruling won't mean the end of the tribe's reservation, on which it plans a casino with 1,000 bingo-based machines, plus card games.
“We're pretty safe,” he said. “It's like we can't get more land.”
Jamul's history appears to be unique even for California. The tribe does not appear on federal lists in 1934, when the Indian Reorganization Act passed. It also is not among 16 tribes acknowledged more recently under a process established by the Interior Department.
Instead, Jamul was recognized through its ratification of a tribal constitution approved by the department in July 1981. A year later, the Interior secretary included Jamul on the master list of federally recognized tribes.
The 50-member tribe's 6-acre reservation was taken into trust by the federal government in two separate actions finalized in 1978 and 1982.
Federal recognition is required for tribes to receive federal aid and participate in government programs. It's also necessary to conduct gaming.
For a tribe like Jamul, the Supreme Court's decision “raises questions about the status of the land,” Indian law expert Kathryn Rand said.
“Those questions might ultimately be decided in favor of the tribe, but . . . they are dependent upon the particular circumstances surrounding the tribe's recognition and the land taken into trust,” said Rand, a law professor who co-founded the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota.
Rand said she would expect state and local officials – who have battled Jamul's plans to build a casino – to raise those issues.
The Carcieri suit was brought by Rhode Island Gov. Donald Carcieri against the Narragansett tribe in an effort to block the tribe's move to have 31 acres taken into trust to build housing.
In its ruling, the court concluded the Indian Reorganization Act authorized the secretary of Interior to take land into trust only for tribes that were “under federal jurisdiction” in 1934.
Jamul was not recognized and its land was not taken into trust until nearly a half-century later.
“It does call into question the land that was taken into trust previously on their behalf, but the case doesn't answer the question on what to do about those lands,” said Claudia Anzures, chief deputy counsel for San Diego County.
The decision, however, almost certainly ends the tribe's long pursuit of trust status for a 100-acre parcel that adjoins its reservation, Anzures said.
“I think it's clear that would not be permitted,” she said.
Both Dickstein and Matthew Fletcher, a law professor and director of the Indigenous Law & Policy Center at Michigan State University, agreed Jamul's and other lands taken into trust since 1934 appear secure, despite the decision.
The federal Quiet Title Act provides a six-year statute of limitations for such legal challenges, Fletcher said.
“It would be a hard claim for the county to get the 6 acres out of trust,” he said.
In the month since the Carcieri decision, tribes have been pushing for a prompt congressional remedy. The House Resources Committee has scheduled a hearing this week on the subject, but the Senate Indian Affairs Committee postponed a similar session amid growing sentiment that congressional intervention will not be quick or easy.
“You might get a fix, but it won't be for years and who knows what it would look like,” Fletcher said.
Any Carcieri legislation inevitably will become entangled in long-standing efforts to amend the Indian Gaming Regulatory Act, the landmark 1988 law that set the ground rules for tribal casinos, he predicted.
Carcieri “is not a simple case,” even from a tribal point of view, said Dickstein. Some tribes have been wary of others acquiring new land for casinos.
“I don't know if you're going to have unanimity among the tribes,” Dickstein said.
Rather than congressional intervention, Fletcher said he expects the Interior Department to try to sort out some of the legal uncertainties with administrative guidelines or regulations.
“They could do a whole lot to limit the import of Carcieri,” he said. “They could write a regulation that says Carcieri basically applies to the Narragansett tribe.”
The Jamul band is no stranger to legal battles.
The tribe is fighting the California Department of Transportation in federal court over casino access to state Route 94. Caltrans says it needs casino details before approving such access; the tribe says that would violate its sovereignty.
That legal battle was cited by Lakes Entertainment earlier this month when the company said the casino's construction faced longer odds. Lakes officials said they don't think the driveway issue will be solved soon, and local opposition will cause more delays even if it is resolved.
As a result, its deal with Jamul lost an estimated $35 million in value last year, Lakes said in an annual report filed with the Securities and Exchange Commission.
Meza, the Jamul chairman, said despite the tribe's struggles, he's confident it will eventually build a casino.
“We're not getting closer,” he said. “We haven't moved forward one inch, but we haven't stopped. We haven't said no. Even though it's at a standstill, it's still a go.”

Excerpts from Lakes Entertainment 4th quarter and year end results: (A big Thank You to Mike Weber for this information)

Lakes' 2008 report is out - it basically says the same thing as the blurb and the teleconference, but goes into a bit more detail. The interesting nuggets are: Jamul is now listed as a 50/50 proposition (rather than the 85% certainty it has been) and the estimated completion date has been pushed to 2014!!!...

Here is the first installment of what the 10-K has to say about Jamul:

Development and Financing of the Jamul Casino. Lakes acquired its initial interest in the development agreement and management contract for the Jamul Casino from Kean Argovitz Resorts in 1999 and formed a joint venture in which the contracts were held between Lakes and Kean Argovitz Resorts — Jamul, LLC (“KAR — Jamul”). This development agreement and management contract has been submitted to the NIGC for approval. On January 30, 2003, Lakes purchased the remaining KAR — Jamul’s partnership interest in the joint venture. In connection with the purchase transaction, Lakes entered into separate agreements with the two individual owners of KAR — Jamul. See Note 14 to our consolidated financial
statements included in Item 8 of this Annual Report on Form 10-K. Effective March 30, 2006, we entered into a development financing and services agreement with the Jamul Tribe to assist the Jamul Tribe in developing the Jamul Casino which the Jamul Tribe will manage.

The Jamul Casino project has been delayed due to various political and regulatory issues related to access from State Highway 94 to the proposed casino site. The Jamul Tribe first requested approval on a driveway road connection to State Highway 94, but was denied a permit by San Diego County (the “County”). In addition, the California Department of Transportation (“CalTrans”) issued a letter to the Jamul Tribe indicating that it would not allow access to a casino operation from State Highway 94.

The Jamul Tribe then submitted an application to the BIA for recognition of an access drive across its land to create an alternative means of access to the site over an Indian reservation road (“IRR”). In September 2008, the BIA notified the Jamul Tribe that the alternative means of access to the site had been approved as an IRR. The IRR would allow the Jamul Tribe to construct a second potential access point without the need for a permit from the County. The Jamul Tribe notified CalTrans of this additional access option but CalTrans by its lack of response indicated that it views this access point no differently than the proposed driveway road connection to State Highway 94. The Jamul Tribe has filed a federal complaint requesting the Federal Court to order CalTrans to cease its efforts to impede the Jamul Tribe from using its lands for economic development purposes. CalTrans responded to the complaint with a motion to dismiss based upon 11th amendment rights of sovereign immunity. A preliminary hearing on the issue was held on December 19, 2008, and the judge dismissed CalTrans’ motion. CalTrans answered Jamul’s complaint and denied the allegations. The parties met during February 2009 to discuss the situation. CalTrans indicated that they do not intend to block access to the reservation, however, the Jamul Tribe must proceed with an Environmental Impact Study which CalTrans would then consider for approval and issuance of the necessary permits. The Jamul Tribe is considering a stay of its federal lawsuit.

Lakes believes that the Jamul Tribe will ultimately prevail in this situation, but based on the typical duration of obtaining approvals of this nature, Lakes believes that a near-term resolution of the access issue is not probable. In addition, the local opposition to this project has not been resolved and Lakes current expectation is that issues associated with this opposition could cause further delays, even if resolution of access issues is achieved. These factors, in combination with the current general economic environment and probable difficulty of financing projects of this nature at desirable rates, have caused Lakes to lower its estimation of probability of eventual opening of this project to 50%, and adjust the projected opening date of this project to January 2014. Lakes has increased the discount rate to 23.5% for this project, due to the worsening financial markets and the wider spread over treasuries, which increased the estimate of the required yield on the notes. As a result, Lakes recorded an unrealized loss on its notes receivable of $15.6 million, an impairment related to the intangible assets of $14.1 million and an impairment related to the land held for development of $5.9 million during fiscal 2008.

Although the value of Lakes’ assets related to the Jamul Casino project have been significantly reduced, Lakes currently expects to continue with the project. Lakes acknowledges that significant risk exists related to this project. However, the Jamul Tribe has the two basic requirements to eventually build a successful project — federal recognition as an Indian Tribe and Indian land eligible for gaming. These factors, in combination with the likelihood that the access issues may be resolved favorably and the possibility of positive changes in the economic environment, could cause the outlook for this project to improve significantly. As a result, Lakes has concluded that it is not currently in Lakes best interest to terminate its involvement with the Jamul Casino project altogether, and forego the possibility of eventual recovery of its advances as well as fees associated with its financing and development agreement related to this project. Lakes will continue to monitor the status of this project.

The casino resort is to be located on State Highway 94, approximately 20 miles east of downtown San Diego. Current plans for the casino include approximately 1,000 electronic gaming devices and approximately 20 table games along with various restaurants and related amenities. Under our current development financing and services agreement, we are entitled to receive a flat fee of $15 million for our development design services, and a flat fee of $15 million for our construction oversight services, payable evenly over the first five years after the opening date of the Jamul Casino. As part of the current agreement, we will use our best efforts to obtain financing of up to $350 million from which advances will be made to the Jamul Tribe to pay for the design and construction of the Jamul Casino. In connection with our financing of the Jamul Casino, the Jamul Tribe will pay interest over a ten year period on sums advanced by us equal to the rate charged to us for obtaining the necessary funds plus five percent. Amounts previously advanced by Lakes to the Jamul Tribe in connection with the Jamul Tribe’s proposed casino resort are included in the development financing and services agreement financing amount. This agreement is planned to be modified to reflect the economics of the revised casino plan as discussed below, but is not currently believed to require approval by the State of California (“State”) or the NIGC. Additionally, there can be no assurance that third party financing will be available with acceptable terms, and if we are unable to obtain the appropriate amount of financing for this project, the project may not be completed as planned.

Under the current compact that the Jamul Tribe has with the State and based upon requirements in other compacts approved by the State in 2004, the Jamul Tribe completed a Tribal Environmental Impact Statement/Report that was approved by the Jamul Tribe’s General Council with a record of decision issued by the Jamul Tribe on December 16, 2006. Since that time, the Jamul Tribe has received comments from various state agencies including the representative from the California Governor’s office. The Jamul Tribe and the State have met on several occasions in an attempt to address the State’s comments related to compact requirements. Throughout fiscal 2007, Lakes and the Jamul Tribe were evaluating the Jamul
Tribe’s alternatives of pursuing a new compact, complying with certain requirements in their existing compact or building and operating a casino based solely on class II electronic gaming devices. The proposed gaming facility has been reduced in size and scope because resolving the State’s comments on the Jamul Tribe’s existing compact or a proposed new contract is expected to take more time than is currently acceptable to the
Jamul Tribe. The current plan is for a smaller scale gaming facility that will become a solely class II electronic gaming device facility which will not require a compact.

http://biz.yahoo.com/e/090313/laco10-k.html

See the Bulletin Board for an in-depth analysis of the financials. http://jacjamul.com/BulletinBoard/index.php?topic=182.0

In yesterday's Union Tribune the following article appeared regarding the JIV lawsuit and Caltrans.

Federal judge affirms tribe's right to sue state

FEDERAL COURT:A San Diego federal judge has rejected a bid by state highway officials to dismiss a lawsuit by an Indian tribe that wants to build a casino in Jamul without going through a lengthy environmental process to get road access.

Judge Dana Sabraw ruled Friday that the state's sovereign immunity doesn't prevent the state from being sued by the tribe, known as the Jamul Indian Village.

He did not rule on the merits of the case, in which tribal officials say the state is illegally threatening to cut off access to their reservation unless they submit casino plans for review.

For its casino, the tribe wants to use a driveway that has long connected its reservation to state Route 94. Caltrans officials say the driveway is at a dangerous location.

The judge gave Caltrans 20 days to answer the lawsuit, in which tribal leaders are seeking an injunction to prevent the agency from blocking access. Caltrans has said it would do so if it doesn't get the documents it wants.

The tribe says that federal law and tribal immunity prevent the state from regulating what it does on its reservation, and asking for details of its casino plans is illegal.

Caltrans officials say they are required to watch out for the safety of motorists, and can't approve a casino driveway without evaluating its effect on the road. –O.R.S.

ICR Xchange held it's investors conference this past week in Dana Point. Lakes Entertainment presented on Jan. 14th. Here are some excerpts of the presentation.

A slide in the presentation shows the in Development stage the Jamul Casino with a date of 2011.

At approximately 14 minutes into the presentation, slide 17 shows the Jamul casino location and Tim Cope from Lakes Entertainment stating the Jamul casino would be the closest to downtown San Diego. And still in the development stage. He also states that Caltrans will not let them build their casino. Caltrans cannot stop them from building but can stop the access to the property without the proper environmental and safety reviews.

The JIV decided that they did not want to comply with environmental standards and instead opted to go with a Class II facility. Recently they have also decided that they are unwilling to comply with CEQA standards and are suing Caltrans. The suit alleges that Caltrans is meddling since they are requiring that the JIV comply with the regulations that apply to any entity that attempts to connect to a state highway. View a copy of the suit submitted here.

SDG&E has been working to develop a substation in Jamul - near Simpson's nursery. SDG&E claims that this is necessary to reduce the power outages in Jamul. Simultaneously they are seeking to develop a power line from Rancho San Diego to Jamul to address the power needs of the proposed JIV casino. Of course once the substation gets built in Jamul they will then "re-evaluate" the situation to determine if the power line is warranted. Sounds like a situation where they are going to foist an unneeded substation to cover the needs for the proposed casino and charge us for the unneeded facility. Read more about SDG&E here.

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A Quick History - The Jamul Indian Village became a recognized tribe in 1982 with 23 members. The Village site of 4 acres was given in deed by the Daley family, owners of Rancho Jamul, to five families living on the site in 1978. The Jamul Indian Village is not, nor ever was given reservation status. In 1992 the tribe and Stations Casinos proposed a ten story casino on the four acre site. Several tribal members opposed the casino project and were dis-enrolled from the tribe and lost their voting rights. The old tribal hall was burned down by angry members who wanted the casino.

The Jamul Action Committee called public meetings and began a lengthy fight in opposition to the Stations Casinos project. Stations Casinos spent $1,000,000 in a land swap with Otay Water District to obtain the land adjacent to the Village, where the fire station sits, for ingress and egress. In 1996, following continued opposition to the project, Stations Casinos withdrew. In 1998, the Stations Casinos organization deeded the parcel to the Jamul Indian Village. This parcel is not in Trust but held fee simple and subject to the County’s zoning. In 1999, the Jamul Indian Village and Lakes Gaming announced an aggressive plan to acquire and put into trust 101 acres adjacent to the four acre Jamul Indian Village. With the acquisition of the 101 acres, the proposed 30 story casino/hotel complex was to incorporate the entire property.

The Jamul Action Committee met and formed a sub-committee called Jamulians Against the Casino and organized community opposition to the proposal. To date, the Department of Interior and the Bureau of Indian Affairs has not approved the taking of the 101 acres into trust.

In 2002, Jamulians Against the Casino took a vote of the community to determine the opposition to a casino in Jamul. Ballots were sent to all the registered voters in Jamul. The ballots were opened and counted by an independent accounting firm. The count showed that 97% of the Jamul residents were opposed to the casino project. A public hearing was held in 2003 in El Cajon for the environmental impacts of the proposal and acquisition of the 101 acres drew over 1000 people opposed to the casino.

New Game Plan - In early 2006, the Jamul Indian Village and Lakes Gaming announced that they would move forward and develop the existing 4.66 acre site with the planned casino/hotel in two phases. The adjacent 1.54 acres held by the tribe has an easement granted to the Roman Catholic Bishop for access to the .84 acres which is the Indian Cemetery still held in deed to the Roman Catholic Bishop.

JAC/Community of Jamul Reaction - If the tribe/Lakes Gaming decides to go forward, than the community will begin the appropriate steps to stop any proposed construction.

Where we are today - Even though the current tribal faction has begun drilling and grading the site, JAC will continue to fight.

It has been over a year since the Jamul Tribe evicted Walter Rosales and Karen Toggery. The overriding reason for the evictions was for the construction of their long awaited casino. Looking back we see no progress towards a casino - only increased disharmony in the community. Since that time we've experienced the following:

Despite all of these negatives there has been NO meaningful movement on the development of a casino. During that same period we've also experienced: