Business & Real Estate

Opponents of Elk Grove casino head to court

The Elk Grove mall site sits abandoned. A developer wants to build an outlet mall there, but a controversy over an adjacent Indian casino could threaten the project. Casino opponents just sued the city to try to block the project.
The Elk Grove mall site sits abandoned. A developer wants to build an outlet mall there, but a controversy over an adjacent Indian casino could threaten the project. Casino opponents just sued the city to try to block the project. Sacramento Bee file

Opponents of the proposed Indian casino in Elk Grove have fired their latest shot – a lawsuit accusing the city of violating California’s strict environmental laws by approving the $400 million project.

Gambling watchdog group Stand Up for California, teaming up with two Elk Grove residents, sued the city last week over alleged violations of the California Environmental Quality Act, or CEQA. The suit tries to overturn a City Council decision that was designed to clear the way for the casino.

The lawsuit adds more intrigue to the Wilton Rancheria Indian tribe’s efforts to build a $400 million casino and conference center on a portion of land owned by developer Howard Hughes Corp. off Highway 99. Hughes, which plans to build an outlet mall on the rest of the land, says the casino would make the mall more economically viable.

Now the casino is under attack on multiple fronts. An unidentified group has launched a ballot referendum to thwart its construction.

At issue is the City Council’s decision Oct. 12 to revise its development agreement with Hughes over the mall project. The revision allows Hughes to sell some of the mall site to the Wilton tribe, pending approval from federal agencies that oversee tribal affairs. The tribe would also have to sign a compact with the governor before it can open a casino.

Casino opponents submitted 14,900 signatures in support of a ballot referendum that would overturn the council’s decision, nearly 6,000 more than necessary. The Elk Grove city clerk is checking the validity of the signatures.

It’s still a mystery who is funding the referendum. The lawyer who submitted the signatures on behalf of the casino’s opponents, Ashlee Titus of Sacramento, has been unavailable for comment.

A pro-casino group tied to Region Business, an alliance of building contractors, has filed a complaint with the state Fair Political Practices Commission saying the backers of the referendum should have filed campaign finance disclosure statements by now. According to the FPPC, anyone pushing a referendum must file disclosure statements after they’ve spent $2,000.

The Stand Up lawsuit also targets the Oct. 12 decision, saying the council had no business allowing the land sale to the tribe without undertaking an environmental review of the casino project as required by CEQA. Filed in Sacramento Superior Court, the suit said the city ignored “evidence that the casino would cause environmental impacts.” The suit doesn’t specify the impacts.

Cheryl Schmit, the head of Stand Up, declined to discuss the case, saying, “The suit speaks for itself.” She declined to say who is funding the litigation, as did the lawyer filing the suit, Marc Bruner of San Francisco.

Officials with the city and Howard Hughes declined comment.

Hughes officials have said the casino project is “essential” to its efforts to develop the mall. The company took over the site after a previous developer went bankrupt in 2009, leaving a half-built mall at the south end of town. City officials have been eager to revive the project, which has been a fenced-off eyesore.

Raymond Hitchcock led a town hall meeting in July on a proposed casino, which was attended by hundreds of Elk Grove citizens with mixed reactions to the project and lots of questions.

Dale Kasler: 916-321-1066, @dakasler

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