Rhonert Park Update – New Legal Challenges Face Graton Rancheria’s Bid for Casino

From the PressDemocrat.com website:

http://www.pressdemocrat.com/article/20090219/COMMUNITY/902180891/1052/OBITS?Title=RP-casino-faces-new-legal-challenge

RP casino faces new legal challenge
Graton Act does not allow 'reservation shopping,' opponents claim; Station Casinos says its financial woes won't affect project

By JAY GAMEL,
FOR THE ARGUS-COURIER
Published: Thursday, February 19, 2009 at 3:00 a.m.
Last Modified: Wednesday, February 18, 2009 at 3:48 p.m.

A group of Sonoma and Marin Native Americans has no right to buy just any property to set up a reservation and casino, according to an amended complaint filed in federal court on Jan. 29.

Casino foes are also hoping that the current economic climate will so affect the financial capacity of Nevada’s Station Casinos that the project will fail on sheer economic grounds. Station Casinos has funded the acquisition and development of the controversial Rohnert Park casino from the start.

In a related development, a spokeswoman for Station Casinos said that company’s financial woes will not affect the Rohnert Park casino project.

The issues are complex, involving claims of state’s rights vs. federal authority, the factual basis for concluding the Graton Rancheria was ever a federal trust, and whether the legislation enabling the Federated Indians of Graton Rancheria to buy replacement land is legal. The plaintiffs in the case are neighbors, concerned citizens and groups, as well as one Petaluma city councilman.

“People are misreading the Graton Restoration Act and it doesn’t allow the kind of shopping that’s going on,” City Councilman Mike Healy said. “The GRA has been interpreted that they can buy up to two parcels anywhere in Sonoma and Marin counties and have them taken into trust for Indian gaming. That’s not accurate; the act only applies to very specific types of land, most specifically the Graton Rancheria itself.”

Healy’s main concern for Petaluma is the impact of many thousands of car trips a day that would be generated along Highway 101. “Can you imagine what it will be like?”
“The most exciting thing about the amended complaint is that it addresses the issue of restoration on the basis of the Graton Rancheria and the act,” Marilee Montgomery of Stop the Casino 101 said. “There was never a tribe on the Graton Rancheria, and the restoration on that basis was contrived. The record is very clear about the circumstances on Graton Rancheria.

“The overwhelming body of archival evidence says that there was never a tribe there. The FIGR went to the federal government, claimed there was a tribe there, historically, and that they remained a tribe after it was eliminated. They omitted a huge body of archival evidence that would have negated their claim.”

A fine but important point of the lawsuit says that California rancherias were never actually trust lands, but were purchased by the federal government in fee (as is the norm) and were always subject to state laws. In other states, Indian reservations are lands held in trust for the tribes and were not subject to state laws when the states were formed. The suit claims that California would have to specifically cede the property in question to give up its right to control what happens.

The original suit was filed last July and has put on hold the transference of the Rohn-ert Park property to FIGR.

Rancherias were first bought by the federal government in the early years of the 20th century to provide lands for homeless Native Amer-icans. According to documents from the 1920s, the Graton Rancheria was first bought for homeless “Marsh-all and Sebastopol Indians,” and later opened up to anyone with at least one-quarter Indian ancestry because so few people ever lived there. Montgomery says “local Native Americans contacted us and said there was never a tribe at Graton Rancheria.”

Meanwhile, the development is having its own legal troubles. Station Casinos has been trying to stave off creditors since last last year and may have to file for chapter 11 bankruptcy. An initial offer to bondholders to retire the debt for pennies on the dollar was closed on Dec. 31. A second offer to buy out senior bond holders for new bonds worth 40 cents on the dollar and a 10 cent cash sweetener per dollar of bond owned — and to replace subordinated bonds with new bonds worth 7 cents on the dollar and a 3 cent cash bonus — is the target of a new lawsuit that could make Station Casinos’ bankruptcy filing far more difficult. Station executives Frank and Lorenzo Fertitta and private equity partner Colony Capital have also offered to put up $244 million in cash.

“The proposed plan will not impact our relationship with the tribe, nor will it have any impact on the progress of the project,” Lori Nelson, spokeswoman for Station Casinos, said Tuesday afternoon. This restructuring is only for the parent company and not for the tribal partnerships, including the Rohnert Park project, she said.

Calls to FIGR representatives were not returned by press time.

(Contact Jay Gamel at argus@arguscourier.com)