Casino, hotel on Hwy. 50 proposed: Tribe says El Dorado complex has funding

In what would represent a substantial widening of Indian gaming in Northern California -- and provide fresh competition for Reno and Lake Tahoe -- a Shingle Springs tribe said Friday it has lined up partners to build a $100 million casino-hotel along U.S. 50.

The Miwok Indians' Shingle Springs Rancheria, which has tried unsuccessfully for several years to break into the $1.5 billion-a-year Indian gaming business in California, said it has formed a partnership with casino firms in Minnesota and Texas to build and manage the facility. It probably would be built on a 42-acre parcel the Miwok are purchasing just south of 50, said tribal spokesman Dick Moody.

The facility would employ 1,200 workers, or about four times the tribe's population. Moody said the project could break ground in nine months -- assuming it wins the necessary approval from the federal Bureau of Indian Affairs, the National Indian Gaming Commission and other federal agencies, and negotiations on a gaming compact with Gov. Gray Davis are completed.

But Howard Dickstein, a Sacramento attorney who has represented a proposed Indian casino near Rocklin, said the governmental red tape alone could drag out the process considerably -- if not kill it. Indicating skepticism toward the Shingle Springs proposal, he said, "I hear about these things every other day, things like this."

Perhaps the biggest regulatory hurdle is the BIA, which must permit the expansion of the rancheria onto the new 42-acre parcel. "There's quite a lengthy review process," said Dale Risling, the BIA's superintendent in Central California.

One of the tribe's new partners, Houston-based casino developer Kevin Kean, acknowledged that the process could move slowly. But he said, "We're not going to let the grass grow under our feet."

If the plan comes to fruition, the Shingle Springs casino could provide additional competition for the Lake Tahoe and Reno casinos, which have been struggling for several years to fend off Las Vegas and the Indian tribes. The Miwok's 100,000-square-foot casino would be as large as many of the Reno-Tahoe facilities, while the highway location could be ideal for siphoning off gamblers heading to the mountains.

The proposal also calls for a 300-room hotel, multiple restaurants and a convention facility. "We're trying to develop that total entertainment package," Kean said.

The project significantly raises the stakes in the tribe's long-frustrated gaming ambitions.

Until recently the tribe had focused mainly on trying to reopen the small tent-like casino it ran for five months in 1997 before it was closed by a federal judge's ruling. Amid complaints from neighbors, the judge said casino customers couldn't use a winding residential street -- the only access to the rancheria -- to get to the casino.

In February, in a move that angered some neighbors, a casino investor working on behalf of the Miwok purchased land for an alternative access road to the rancheria.

Then, in a new wrinkle, the tribe agreed last month to spend $3 million on the 42-acre parcel next to U.S. 50, Moody said. That purchase has yet to close, he said.

Moody said the casino-hotel could go on the existing rancheria property but more likely would be built on the newly purchased land. The new property, which is zoned for commercial use, sits on the south side of 50 and is marked by a real estate billboard that says, "The Greatest Earth on Show." He said the new location should mollify neighbors because it's further away from residential areas. The tribe is talking to residents and "involving the community in the process," he said.

Penny Le Doux, a homeowner near the rancheria who fought with the tribe over its earlier casino, said the new site appears promising. "They don't go through anybody's neighborhood," she said.

However, while some residents are familiar with the proposal, El Dorado County Chief Administrative Officer Mike Hanford said he wasn't aware of the project until contacted by The Bee. The opinions of local officials can weigh heavily as the BIA and other federal entities rule on a tribal gaming proposal.

Indian gaming in California has become a hot political issue in recent years, climaxed by voter approval last November of Proposition 5, the measure that lets every tribe operate an unlimited number of video slot machines. The proposition is being challenged before the state Supreme Court.

With the court challenge pending, the Miwok have been negotiating with Davis over the types of gaming that they could offer. The Miwok hope to build a 100,000-square-foot casino offering gaming machines, table games and card games -- "anything allowed by the compact with the governor," Moody said. Davis has said he wants to see only a modest increase in Indian gaming; his office wouldn't comment on the status of the Shingle Springs negotiations.

Kean Argovitz Resorts, the casino developer from Houston, would build the facility. Lakes Gaming Inc., a Minneapolis-based manager of Indian casinos, would run it under a multi-year contract and then turn the management over to the tribe, Moody said.

Kean Argovitz's president, Kean, said his firm is committed to spending up to $100 million on the complex, although the size and scope of the project will depend on how much gaming is allowed via the negotiations with the governor.

He said he developed two Indian casinos in Louisiana in the early 1990s and has reached agreements to develop casinos for tribes near San Diego and in Michigan, in addition to the Shingle Springs contract.

His father-in-law and partner in Kean Argovitz, a well-known Houston entrepreneur and real estate man named Jerry Argovitz, should be able to line up the funds "through Wall Street." Kean said his group loaned the Indians the money to buy the new 42-acre parcel along U.S. 50.

Lakes Gaming, which would manage the property, manages casinos in Louisiana and previously ran Indian casinos in Minnesota. The company, whose stock is traded on the Nasdaq market, earned $61.2 million last year on revenue of $92.3 million. A year earlier, it earned $45.2 million on revenue of $78.5 million.

Timothy Cope, Lakes Gaming's chief financial officer, would only confirm the company was involved in the deal but declined to provide further details.

Bee staff writer Clint Swett contributed to this story.