The Federated Indians of Graton Rancheria (FIGR) did an about face earlier this month when they finally sat down with Rohnert Park City Officials and renegotiated their MOU. The original agreement was null and void as it was recycled from 2003 and frankly referred to another property entirely that was never purchased. The current site never had been agreed upon. Even the National Indian Gaming Commission found (in 2009) that the MOU didn’t apply to the new site.
Stop the Casino 101 Coalition filed a lawsuit on May 21, 2012, challenging the gambling Compact Governor Brown gave Graton Rancheria as unlawful under the state constitution. It also challenged the use of the Rohnert Park MOU as the “intergovernmental agreement” that the Compact required, because the agreement was invalid. The Compact, which itself refers specifically to the current building site, says that without a valid agreement with Rohnert Park, construction on the casino could not begin. But Graton Rancheria officially began construction on June 18, 2012.
Until recently, the FIGR ignored this key fact and trudged forward. The City Officials of Rohnert Park were complacent and didn't seem to be concerned. They had their heads down, kept their mouths shut, and seemed to act afraid the Casino people would walk away completely as they could have. In August of last year, (see link below) city officials told the Press Democrat that they knew that the MOU didn’t apply to the new site, and that "discussions to update hadn’t started yet." In November, (see link below) City Engineer Daryl Jenkins told the Community Voice, “It wouldn’t do any harm to update it, but I have heard nothing in that direction.” Thus as of year-end no discussions and no progress.
But, on March 5, 2013, after a motion by the State (Governor Jerry Brown’s administration) to have the case transferred to Federal Jurisdiction was denied, and a court date was set for August 2 this year in Sonoma County Superior Court, things appear to have moved very rapidly; within three weeks after the trial date was set, a newly revamped MOU was on the City’s agenda. In the opinion of many, that's why they suddenly showed new interest. The triggering event.
The Rohnert Park City Officials approved a $40 million MOU in a straight 5-0 vote. Not one dissenting vote or comment.
Now with the MOU complete, many are wondering what is next and what remains in support of the lawsuit to halt the casino construction and/or shut it down completely. It seems the Casino operators, Tribe, and State officials never expected the court case to progress this far.
According to the Stop the Casino 101 Coalition website information, the primary part of the case remains; the stale MOU was a secondary issue cited. The case argues that the federal government does not have jurisdiction over the FIGR’s casino site, thus it is not Indian land as defined by state and federal law. As a result, the land is still under the state’s sovereign authority and is still subject to state law. Class III gambling is not allowed on state land, only on tribal land, and the governor had no authority to enter into a compact with the FIGR.
Up until this point, the FIGR Tribe and the State of California didn't seem to care. At several points, key officials admitted the MOU didn’t apply to the new site. Governor Brown's Office either ignored that fact or his staff didn’t do their due diligence. Many now believe that may have had a lot to do with close ties between Darius Anderson and the Governor. Favors and "Pay to Play" tactics prevail. Darius, a Sonoma Valley resident, has had Governor Jerry Brown over for private parties and attended various events, a few (there are many) of which are documented in these links below
The Graton Rancheria Casino is backed by Station Casinos to the tune of $850 milllion. Currently its Loans made to Graton Economic Development Authority were $375M senior secured term loan due 2018 and $450M senior secured notes due 2019. Bank of America Merrill Lynch, Wells Fargo, Deutsche Bank, and Credit Suisse were the joint financial backers for the sale of $450 million of senior secured note. Station Casinos of Las Vegas is the managing partner in the development. The deal is rated "junk bond" and Standard and Poors a "B" rating. The outlook was most recently issued a "Stable" but these loans are likely considered a syndication where these big banks, share in the credit risk. As this legal case progresses through August it is possible the rating agencies may downgrade the credit rating and/or change the outlook and if that happens it would be devastating to the banks in they would have to reserve higher loan loss reserves and should the legal case lean toward a court ruling to close the casino could have negative impact on a catastrophic proportion. The more negative press associated with the casino, the more the financing banks will be concerned.
Make no bones about it, in my opinion the financial institutions are worried and watching very closely. This could be a monumental ruling and impact not only Rohnert Park but undermine other casinos in California as well.
See the link below for more information: