Business & Real Estate

Federal government grants Wilton tribe control of land for Elk Grove casino

Mary Tarango, the first official Wilton Rancheria chairwoman, is surrounded by sage smoke – to bless the area, people and ground around them – before the start of a news conference at the site of a never-finished mall.
Mary Tarango, the first official Wilton Rancheria chairwoman, is surrounded by sage smoke – to bless the area, people and ground around them – before the start of a news conference at the site of a never-finished mall.

The Indian tribe that plans to build a casino in Elk Grove announced Tuesday that the federal government has taken into trust 36 acres that the tribe had purchased for the gambling facility.

The action by the U.S. Department of the Interior on Friday means the property is now considered sovereign tribal ground for the Wilton Rancheria tribe. Elk Grove officials said the transfer means the tribe can now build its casino along Highway 99 without the city’s approval. But one lawyer who has spent many years representing casino tribes said the tribe’s ability to proceed may still be in question because of a previous agreement for the property that Elk Grove made with a shopping mall developer.

The announcement came during a news conference on Tuesday attended by 100 members of the tribe at the site of the planned casino on a half-built shopping mall on Elk Grove’s southern edge.

“After six decades of being landless ... we now have a home,” said tribal Chairman Raymond Hitchcock, as a bundle of sage burned at the foot of the podium – a ceremonial tradition meant to cleanse the area.

Wilton Rancheria was disbanded by the federal government in 1959 before official recognition was restored in 2009 to its 700 members. The tribe and its gambling partner, Boyd Gaming of Las Vegas, purchased 36 acres last month for about $36 million from Dallas-based Howard Hughes Corp., the developer of an outlet mall at the 100-acre site.

In recent weeks, the viability of the casino was questioned because the federal government had delayed taking the land into trust, despite a promise from the outgoing administration of President Barack Obama. Experts had suggested that President Donald Trump – who has a long history of lobbying against Indian casinos competing with his own – could overturn the decision.

The Elk Grove City Council had attempted to facilitate the casino’s construction by amending a previous agreement the city made with Howard Hughes Corp., which has proposed an outlet mall for the property. But a group financed by a company that works with card rooms gathered enough signatures to force a public vote on the council’s action. Rather than hold an election, the City Council voted last week to rescind its action, leaving intact the development agreement with Howard Hughes for the 36 acres slated for the casino.

On Tuesday, prominent Indian gambling lawyer Howard Dickstein said the existing development agreement could still cloud the property’s title and derail the tribe’s bid to build a casino.

In a Jan. 10 letter from the California Department of Justice to the Bureau of Indian Affairs, the state noted that the “development agreement has not been amended, and its restrictions currently encumber the property.”

Such an encumbrance, Dickstein said, “may affect what activities can occur on the land while it’s in trust.”

In addition to the title issue, tribal officials must clear some other hurdles before construction can begin, such as the negotiation of a gambling pact with the state.

“There’s still a lot more to do,” said Brian Larson, executive vice president of Boyd Gaming.

The $400 million casino, hotel and convention center will eventually employ 2,000 people, according to Hitchcock.

Boyd, which runs 24 casinos in seven states, financed the land purchase and will pay for the development. The Wilton Rancheria will repay its partner with profits from the casino’s operations. Hitchcock gave a three- to five-year timeline for the grand opening of the casino.

Former Elk Grove Mayor Gary Davis said the casino and outlet mall would “breathe new life onto the desolate ghost mall.” Both Davis and Assemblyman Jim Cooper, D-Elk Grove, attended the news conference. None of Elk Grove’s council members showed up.

Amid the recession, construction of the mall was halted in 2008. Six years later, Howard Hughes announced it would build an outlet center, but later argued that a casino would be needed to drive traffic to the shopping complex.

Under a memorandum of understanding with Elk Grove, Wilton Rancheria has promised to provide $132 million over 20 years in funding for infrastructure, police, schools and nonprofits. The money offsets tax revenue that the city will lose because the land is now considered sovereign, Elk Grove spokeswoman Kristyn Nelson said.

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.

Richard Chang: 916-321-1018, @RichardYChang