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HomeMy WebLinkAboutMinutes 1995-05-01 Mayor Robert Yee Council: Jack Drago Joseph A. Fernekes --John R. Penna Roberta Cerri Teglia MINUTE~ City Council El Camino High School Cafeteria May 1, 1995 SOUTH SAN FRANCISCO CITY COUNCIL SPECIAL TOWN HALL MEETINGS DISCUSSION ON CARD ROOM PROPOSAL NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, that the City Council of the City of South San Francisco will hold Special Meetings for discussion on the eardroom proposal for the Shearwater site with all meetings beginning at 7:00 p.m. and ending at 8:30 p.m.: Monday, May 1, 1995, El Camino High School, Cafeteria, 1320 Mission Rd. Tuesday, May 2, 1995, Alta Loma Middle School, Multi Use Room, 116 Romney Ave. Wednesday, May 3, 1995, Ponderosa School, Multi Use Room, 295 Ponderosa Rd. Monday, May 8, 1995, Martin School, Multi Use Room, 35 School Street Tuesday, May 9, 1995, South San Francisco High School, Cafeteria, 400 B St. Tuesday, May 23, 1995, Westborough Junior High, Multi Use Room, 2570 Westborough Blvd. City Clerk City of South San Francisco Dated: April 26, 1995 CALL TO ORDER: ROLL CALL: AGENDA (Cassette No. 1) Discussion on the cardroom proposal for the Shearwater site. AC!ION TA~ 7:06 p.m. Mayor Yee presiding. Council Present: Drago, Fernekes, Teglia and Yee. Council Absent: Perma. City Manager Wilson gave the following presenta- tion: he showed artist conceptual drawings of the proposed site; it is a 400,000 sq. ft. retail/commer- cial complex with three major retailers which could be a Target or a Price Club; Hollywood Park is proposing a I00,000 sq. ft. casino cardroom and that is the primary focus in the proposal to discuss; the questions that arose with the gaming - what are the State regulations, how do you control control it, what kind of controls and regulations will be put in place, what additional City services will be 5/1/95 Page 1 Discussion on the cardroom proposal - Continued. needed, will it require a lot of police and fire, what are the issues involved, will it require anything unique in City planning or services; revenues are purported to be large with other forms of taxes that will benefit the community; he sent staff to various communities such as laglewood and neighboring cities with casinos and they met with officials of those communities to try to learn as much as possi- ble about the casino operations; members of the City Council also went down, so that on a first hand basis they c.6uld experience what Hollywood Park operations are; staffs intent is to not promote or cast negative aspersions about the gaming and to tell the community what was found in the process so everyone can draw their own conclusions; the com- munity will be able to draw their own conclusions and, if it is acceptable or not they will have the op- portunity to voice their concerns to the Council; staff is not asking the question, should there be a cardroom, but will answer any questions associated with the cardroom, such as what are the steps to service this facility both before it starts operations and after; staff is not taking a position, but did a due diligence analysis and will recommend to the Council in terms of regulations and additional staff- ing to serve the facility; there are certain questions staff cannot answer; staff can raise issues of social consequence, but none are that well learned and what staff doesn't know will be recorded, and they will develop responses to the community; etc. City Attorney Mattas related: gaming allowed under State law with restrictions are lottery, keno, horse racing, bingo and cardrooms; the Attorney General does background checks and issues gaming card licenses; State law allows cities to impose more stringent regulations; staff is working on an 80-100 page draft ordinance on cardrooms; a city has the ability to limit the number and type of games played; under current State law an election is re- quired if the city did not permit gaming prior to 1984, but there are two existing cardrooms operat- ing in S.S.F. and, in his opinion, a vote is not re- quired; a General Plan amendment will be required on the land use and a change to the Municipal Code if the proposal is approved, for they prohibit addi- tional clubs; these amendments will allow gaming at one location, the Shearwater, if approved; the public hearing process required for these amendments and land use approvals that the City might grant at the Shearwater site; etc. 5/1/95 Page 2 Discussion on the card room proposal - Continued. 5/1/95 Page 3 Police Chief Raffaelli related: he investigated Bay Area and Southern California cardrooms and found calls for police services for the gaming clubs (200) are not greater than calls from S.S.F. Kaiser Hospi- tal (250) per year; statistics on police service calls for the Price Club (160), Century 8 (76), Tanforan (2,300), Hillsdale Mall (450), Serramonte (890); he determined that police calls for the Shearwater pro- posal would not have a significant impact on this community; crimes associated with cardrooms - loan sharking, extortion, which causes bodily harm usually away from the site, money laundering, from drug traffic where they want to clean the money from gambling and cash in, organized crime, tries to get in and subcontract with their own dealers extor- tion and gangs, prostitution, sometimes the prostitute goes into the club or sends her pimp to have the client meet her at a hotel nearby, drugs, not that prevalent for they are more in cocktail lounges and most people are gambling to win which they cannot do if they are under the influence, follow-home robberies, bookmaking, skimming, cheating, against the club or the people gambling which has a domino effect in the family, and political influence, from the card club bringing a lot of money into a city which cities come to rely on heavily and then the card club has a great deal of control over the city. He continued: if a cardroom is going into the Shearwater site he will need one sergeant, one clerk and three police officers who will be assigned to the club; they will do background checks on the em- ployees and be responsible for all of the club; so there is not a nighttime impact on the community he needs one officer seven days a week and he will be on the street so when calls come in it will not take away from the community; the total cost is $550,000 with some equipment; the police are on their 4th draft of the ordinance the City Attorney spoke of, which will cover a lot of the crimes for they had gleaned ordinances from other cities, as well as from Nevada; there will be surveillance cameras where security people will watch everyone inside and out- side the club; Hollywood Park has 90 security peo- ple who work constantly inside and outside; anyone wining $10,000 or more is reported to IRS; Holly- wood Park prosecutes people found cheating; he is looking at no subcontracting of Asian games; no campaign contributions to Council candidates and a non-transferable license, so no other company can come in and the City keeps control over the card- Discussion on the cardroom proposal - Continued. 5/1/95 Page 4 ACTI_QN TAKEN room. Interim Director of Economic & Community Devel- opment Byer had investigated: social consequences of cardrooms becoming addictions and the individual becomes a compulsive gambler; there are 300,000 compulsive gamblers according to the study he read, of which 60,000 are juveniles; social cost to the State of New Jersey was $554,000,000 while the State revenue is $300,000,000; etc. Assistant City Manger Martel spoke of significant new revenue to the City: $5.1-6 million, plus sales tax, redevelopment funds; 1,000-2000 new jobs; staff is recommending that all revenue be separated out from the General Fund by creating a card club enterprise fund; the $5-6 million will be set aside to pay specifically for the personnel related costs for police and in finance for auditing services; set aside the rest for building improvements, street and infra- structure in the capital improvement budget and for property acquisition; those accounts would be for one time expenditures and would not affect our on- going City budget; the nature of a gaming club involves cash flow and money handling which re- quires expertise of auditing and an on site obser- vation of procedures that are implemented by a card club operation; staff's overseeing would include audits of the cardroom receipts, a review of the video tapes would be compared against the transac- tion; job specifications for a revenue technician will include skills for the gaming tables at a cost of $16,000 a year; there will be interior and exterior audits every six months; etc. Rev. Richard Neely, 801 Miller Ave., stated it is not a matter of calls for service, for when staff talks about twenty pages in other ordinances and they are adding 80 pages, his question is why make such regulations for something so great and grand. This is the Shearwater that involves the shopping center and the cardrooms - from which do you expect to get the most revenue. He stated in San Jose he read there was a great amount of money that came to a city from a card- room which others think this City can get, but whose idea is this project. City Manager Wilson stated the proposal came from the Developer who approached the City with Holly- Discussion on the cardroom proposal - Continued. 5/1/95 Page 5 _A C TI Q_N .T.T _A K E N wood Park as a participant for the casino, which is part of the development. Councilman Penna questioned if the City is at a point where we are actually so desperate that we need this kind of revenue from gaming. What else is in the proposal. City Manager Wilson stated the proposal includes a restaurant, a video arcade, a karioka and the capa- bility of a club type show. At the current time it would be the cards. City Attorney Mattas stated if the use was expanded in the State to include slot machines it would require a vote of the people of California, similar to the lottery. Councilwoman Teglia stated the City received a lot of proposals over a lot of years and the City had turned up its nose. This proposal was interesting, not only the revenue, but the site is one of the super fund sites and, in order to develop it, it has to be cleaned up. Because of the site not being located in one of our residential neighborhoods, the City is desirous of moving the existing clubs and have not encouraged expansion over many past years. There are negotiations going on between Hollywood Park and the Pasco family to eliminate the existing licens- es so there would be only one license. The City has attempted to look at new sources of revenue and the sources have been traditional, such as what the State has been absorbing. We have had sales tax from the Price Club but now San Francisco has a Price Club and our sales tax has dropped and in mid-year we had to cut the budget due to State revenue absorption. This is the first year we are not offering our employees any kind of a raise. We have been cutting our staff and services for the past few years and yes, we do not have a bunch of revenue sources; etc. Vice Mayor Drago stated he and another Council- member are working on the same kind of ordinance for Cable TV. They don't answer their phone and the ordinance will be just as thick as the gaming club ordinance. Ms. Edna Harks spoke against having gaming be- yond the limits we have for non-profit organizations Discussion on the eardroom proposal - Continued. that are regulated by the police and.she did not think we should embark on this big scale gaming. Mr. Manny Madriaga stated he was against the proposal. He is in favor of strengthening family values and this will disrupt families, for a gambler cannot recoup his losses over a period of time. That is why it is a thriving business, because over 98 % of people will lose and if they stay long enough all will lose money .and more will be dependent on social services. He is in favor of minorities and the low income members of society becoming part of the main stream. He felt the casinos victimize the poor and the minorities at the lowest level of the ladder, because they cannot control their risk taking. He is for a S.S.F. that will provide wholesome activities. The casino only gives misery to the wives and the kids of the gambling addicts. He asked the Council, if those cardrooms were legal would you want them in your backyard. He did not think it was an issue of our Police Department being able to police it, the City Manager will be able to administer it. It is not a case of economics or toxic waste, but an issue of choice. There is the East of 101 Plan and the casino does not fit into that Plan. Why weren't there more proposals that could com- pete, because now it is the casino or nothing. What is the time table for rushing, are we in competition with San Bruno that we can get the money ahead of them. He felt it should be a choice of the people whether or not to have a casino and the Council should consider what the General Plan says and should not exceed its moral mandate if they decide for the peo- ple. Councilwoman Teglia replied: the City had three proposals on the site over a period of years; the merits of this proposal include Hollywood Park being a publicly owned company and its stock is traded over the Stock Exchange. Mr. Lou Dell'Angela spoke against the proposal: we are talking about big money and an image of the City; the City had a bad image for a long time and if the City accepts this proposal it is going back- wards; Councilwoman Teglia talked about the super fund site, yet any contaminated soil is hot; if it takes $3 million to clean up the site then the value is less 5/1/95 Page 6 Discussion on the cardroom proposal - Continued. 5/1/95 Page 7 ACTION TAKEN 54 $3 million; it is not the City's responsibility to bail out the owner; you have the Paseos as operators and they are not creating problems on Grand Avenue; this is 150 table poker room and the biggest poker room anywhere; this cannot be compared to Pasco's, but you cannot use it to force the Paseo's into a casino like this; he agreed with the previous speaker's comments on this being a social problem for you can talk about revenues, but the social costs are heavy; he thought these meetings are good, but hoped they are for Council to come to a conclusion or an election; we are six months away from an election, the General Plan says there will be a vote of the people and there are concerned people on the Council who are pushing hard to eliminate a vote of the people; if the Council approves this it will be facing a referendum or a recall, and that is not talk; this is a significant decision and the people should have the vote; he felt this use gives no attention to the attraction of the bay front; this is window dress- ing for the issue of a cardroom; there are six months before the election, a lot of information is still not out there and there is a sketchy concept plan; if indeed we see retail on the site, it is going to take away from the downtown area, which the Council is supposed to enhance; people need to be aware of this issue before an election is held and he urged the Council to not circumvent nor amend the General Plan; he personally is against a casino but, more importantly, wants the people to vote on the issue; he questioned who is pushing for a no vote and what is the justification for a no vote; he again urged the Council to put this on the ballot and trust people to do the right thing. City Manager Wilson stated his understanding from Water Quality Control is that the soil is very con- taminated. Mayor Yee asked the City Manager to come back with more information. Councilwoman Teglia stated Council had not com- pared this operation with the Pasco's and the only thing that was brought up are negotiations to elimi- nate all but one operation. She did not know if it is tO be a partnership or what. The other thing men- tioned about the rush and who is pushing for what - we have not discussed whether or not there will be an election. We are holding six meetings in the community for input, which most Councils don't do. A~ENDA Discussion on the eardroom proposal - Continued. 5/1/95 Page 8 Mrs. Madelyn Madriaga spoke of San Jose's deficit, where they assessed everyone $25.00 to keep the libraries open, so she does not see where the bene- fits come from. In San Jose 80% of the Asians do gamble and it has been proven that 80% of the clientele comes from Asians, which is a lot of im- pact. If she gambled away her life in the casinos she might end up on welfare rolls and gamble that money away. She stated there are many bankrupt- cies and follow-home crimes, since they know that Asians keep'their money at home. This is big mon- ey coming in and, with the casino influence, how can you trust your politicians - for they are not working for the people. This is a government for the people, by the people and the Council should be looking to the people for this decision. She is against lobbying because then our representatives don't represent us. She stated the job positions will be for card dealers and bosses. She felt this is a "lose lose" situation and felt the Council should look for revenue that is morally good money. She wor- ried that the kids will be working at the casino and after work they are right back in and that will be their society. She felt the Council owed the people, as public servants, to do the right thing. Ms. Margie Casagrande, 234 Westview Dr., stated that ideally she did not have a problem with a card- room and it could be good for the City but, looking at the plan of a cardroom and a shopping center, she likes the shopping center. However, most people look at shopping centers and think families and felt this was a good mix for the site. She questioned what retail users are going to the site and would be linking themselves to a cardroom, because, in this day and age, we have people who ban products with moral issues. Mr. Poland, Developer, spoke of the Hollywood Park operation in Southern Calif. where a cardroom is attached to the race track and just a few hundred yards away they are leasing a 500,000 sq. ft. retail center with large retail stores, a theater complex and recreation activity. Likewise, in our project, we have talked to a lot of people who are interested for there aren't more land blocks available. Most retail- ers are reluctant to commit until the City okays the use. There could be a Target, a Home Depot, a large electronic store, a McDonalds and other res- taurants, as well as theaters; etc. Afi~NDA AC_T!Q_N _T_A_KE_N Discussion on the cardroom proposal - Continued. ADJOURNMENT Mr. Alex Agiusti, Security Manager Hollywood Park, related: minors are not allowed, other than in restaurants or banquet facilities; getting a Wall- Man; proximity to a freeway is a plus to the site; police of Inglewood sit in on security meetings in Hollywood Park; what will occur in a casino is only what you will allow. Ms. Maria D'Alessandro stated she is against cardrooms, especially of this proportion. Can we tear it down' if the economy gets better. She feels the lure of a quick dollar could woo this Council. Would this proposal be considered if these were good times. She believes the Council should put this issue on the ballot and try to convince the peo- ple their quality of life will not change in the future. Mr. Madriaga questioned what is the ethnic break- down of customers and the breakdown of income levels. Mr. Agiusti related the ethnic breakdown: casino - asians 68 %, blacks 25 %, at race track there are black and hispanics from all levels of income. A gentleman who refused to identify himself related: understood the contaminated hot spot because he is licensed from the State on toxicity; does the City still own the property; anytime there is a hot spot it has to go into a Class I dump site and down the road the owner of the soil is responsible for that dirt; etc. Mr. Dell'Angela related: four weeks ago in a Council discussion someone said if we have to go tO an election then we should group in bingo; he ques- tioned if that is a hidden agenda and backroom politics. M/S Fernekes/Penna - To adjourn the meeting. Carried by unanimous voice vote. Time of adjournment was 9:45 p.m. 5/1/95 Page 9 AGENDA ACTION TAKEN 57 RESPECTFULLY SUBMITTED, Barbara A. Battaya, City City of South San Francisco APPROVED. Robert Yee, Mayor City of Somh San Francisco The entries of this Council meeting show the action taken by the City Council to dispose of an item. Oral communica- tions, arguments and comments are recorded on tape. The tape and documents, related to the items are on file in the Office of the City Clerk and are available for inspection, review and copying. 5/1/95 Page 10