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Federal judge orders governor back to talks on Madera-area casino

An artist’s rendering of the proposed North Fork Rancheria Resort & Casino.
An artist’s rendering of the proposed North Fork Rancheria Resort & Casino. Station Casinos

Saying that Gov. Jerry Brown acted in “bad faith” by ending negotiations, a federal judge has ordered the state to return to talks with North Fork Rancheria officials on a gaming compact for a Madera-area casino that state voters rejected last year.

Voters rejected the gaming compact in Proposition 48 last November by a wide margin, and the governor wrote the tribe in January suggesting that entering into further negotiations “would be futile.”

But in a 23-page ruling issued Friday, U.S. District Court Judge Anthony W. Ishii said federal law requires the governor to negotiate with the tribe and conclude compact negotiations within 60 days. If both sides can’t reach agreement, the judge will appoint a mediator. The state and the tribe will then have 60 days to present a final offer for the mediator’s selection.

The North Fork tribe argued that under federal Indian gambling law, the power rested in the hands of a federal judge to order the governor back to the table and, if necessary, select a mediator to choose between a state-proposed compact and one from the tribe. The complaint was filed after the governor’s office sent a letter to the tribe’s lawyers declining further negotiations.

“The state does not now contend that any of the (Department of the Interior) secretary’s determinations were incorrect, nor does it articulate a basis for its refusal to negotiate regarding the Madera parcel,” the judge said in requiring the governor to negotiate.

The 305-acre casino and hotel site is in federal trust for the tribe. The tribe has no land in its North Fork base for a casino and has spent 11 years working with local, state and federal officials to put the Madera-area land in trust, get the compact approved and build a casino.

The state does not now contend that any of the (Department of the Interior) secretary’s determinations were incorrect, nor does it articulate a basis for its refusal to negotiate regarding the Madera parcel.

U.S. District Court Judge Anthony Ishii

The tribe contends that its state compact was legally ratified by Brown and the Legislature before California voters opposed it. The compact also provided revenue for the Chukchansi tribe to make up for losses it would suffer because of new competition. Also, it would put money into the coffers of the Wiyot tribe near Eureka so it won’t put a gaming complex on the environmentally sensitive Humboldt Bay.

Overall, North Fork tribal officials are encouraged by the judge’s decision.

“The North Fork Rancheria is obviously pleased with the U.S. District Court’s ruling and believes it represents another important step forward in our ability to bring jobs and economic opportunity to the region,” said Charles Altekruse, tribal spokesman.

A spokesman for Brown said the state is in the process of “reviewing our options.”

The North Fork Rancheria is obviously pleased with the U.S. District Court’s ruling and believes it represents another important step forward in our ability to bring jobs and economic opportunity to the region.

Charles Altekruse, North Fork Mono Rancheria spokesman

The casino and hotel resort would be built north of Avenue 17 and Highway 99, near Madera. It would have 40 gaming tables, a bingo hall and 2,000 slot machines, about the same size as Chukchansi Gold Resort & Casino near Coarsegold.

Under the terms of the 20-year deal signed by the governor, Madera County and the cities of Madera and Chowchilla were to get a total of about $5 million annually.

Millions of dollars also would be provided for transportation projects, water conservation and public safety. Casino construction would create about 1,200 jobs, and the casino – when finished in three phases – would employ more than 1,400.

But Proposition 48 argued that the North Fork Mono Indians were not native to the San Joaquin Valley and have no connection to the land where the casino is proposed. The proposition described the casino as an example of “off-reservation gaming.”

Dan Casas, counsel for Table Mountain, the largest financial opponent of the compact in Proposition 48, said the agreement that placed the land into federal trust would allow any tribe to go anywhere in California.

“The bigger picture for us is that if the state is going to allow ‘off-reservation gaming,’ they should allow it for everybody,” he said.

Picayune Rancheria of Chukchansi Indians officials also oppose the Madera-area casino. The tribe and its bondholders contributed to the campaign to reject the compact in Proposition 48.

The bigger picture for us is that if the state is going to allow ‘off-reservation gaming,’ they should allow it for everybody.

Dan Casas, Table Mountain Rancheria legal counsel

In his ruling, the judge said that the federal government acknowledges potential financial effects on Chukchansi Gold Resort & Casino, but “concluded that competition alone is insufficient to determine that construction of the (Madera) facility would result in a detrimental impact to the Picayune tribe.”

Chukchansi-sponsored studies showed a reduction of between one-third and half of its gaming revenues when the Madera-area casino is fully operational.

Revenue projections vary from $52.8 million annually by its seventh year to $225 million annually.

Marc Benjamin: 559-441-6166, @beebenjamin

Complicated process for Madera casino

Federal law requires the governor to negotiate with the tribe and conclude compact negotiations in 60 days. If both sides can’t reach agreement, a mediator will be appointed by the judge. The state and the tribe will then have 60 days to present a final offer for the mediator’s selection.

A compact will then require ratification by the state Legislature, but if legislators oppose the compact, the tribe could then go to the secretary of the federal Department of the Interior. The federal government will then decide which compact best meets federal gaming law and approve a compact to allow a new gaming facility.

If the Legislature approves the compact, but fails to get a supermajority, the compact could be subject to another statewide referendum, gaming experts say. But if the Legislature doesn’t ratify it, the tribe will request federal intervention from the U.S. secretary of the interior.

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