Needy Would Be Beneficiaries : Cudahy Looks to Bingo for Funds

City officials are negotiating with a nonprofit organization headed by a casino owner from Compton to bring a potentially lucrative bingo game to this tiny, low-income community.

The intent is to use revenue produced by bingo to fund the Cudahy Social Service Agency, a nonprofit organization that distributes food and clothing to the needy. The agency is supported mostly by city funds. Backers of bingo say money from the games would make the agency independent and allow city money to be spent for other services.

“The city doesn’t have money to (continue) supporting the program,” Mayor Wilfred (Bill) Colon said. “Bingo is one means of funding. It would take the strain off the taxpayer.”

In addition, under state law, the city could also receive a licensing fee of 1% of the monthly gross bingo revenues over $5,000. Bingo revenue could also be given to other charitable organizations outside the city, supporters say.

Although formal negotiations to bring bingo to Cudahy are just beginning, the proposal has already raised a number of questions that supporters and opponents are seeking to answer.

Questions Arise

The questions include how much money a bingo parlor would generate, whether the games should be on city-owned property and how this 1.1-square-mile community would cope with increased traffic caused by bingo players from other areas.

Among the key people in this proposal are Colon and James Graham, director of the Cudahy Social Service Agency, both leading supporters of bingo; Councilman John Robertson, a supporter-turned-opponent; and John Mgrdichian, a Compton businessman.

Mgrdichian, who owns a Compton rubbish firm called Murcole and the Hi Desert Casino & Inn in Adelanto near Victorville, is forming a nonprofit organization called Social Service Foundation to run the proposed Cudahy bingo operation. He said he is not sure how much money a bingo operation could generate, but he hopes to draw 500 to 600 players a day. He also hopes that bingo in Cudahy would draw many people who used to play at a popular game in Hawaiian Gardens.

The Cooper Fellowship, a Santa Ana-based nonprofit organization, operated the Hawaiian Gardens game but shut down early this year when its founder and executive director, Jack Blackburn, suffered a cardiac problem, Cooper Fellowship attorney Bill Thom said.

The Cooper Fellowship reportedly received an estimated $24 million a year from bingo. The city of Hawaiian Gardens received about $200,000 from the games as part of its state-mandated licensing fee.

State law says that most proceeds from bingo games must be used for charitable purposes. The law also requires that individual prizes not exceed $250 and that a small portion of the proceeds, which cannot be more than 20% or $1,000 a month, can be used for administrative purposes.

Mgrdichian, Colon and Graham are leading an effort to put the proposed Cudahy bingo parlor in the rear portion of a large industrial building owned by the city’s Redevelopment Agency at Otis Avenue and Elizabeth Street. The front of the building houses the Social Service Agency’s offices.

Graham started operating the Social Service Agency late last year with city funds. So far, the city has provided the agency an estimated $116,000, including payment of telephone and electricity bills. Graham’s salary, which is an estimated $35,000, is also provided by the city. He has received an estimated $17,000 in federal funds, Graham said.

Graham’s contract with the city expired July 1 but has been extended for three months while the bingo issue is resolved. In the interim, the city will continue to provide the agency with $5,000 a month.

Graham said he had promised the city that the agency would be self-supporting within 18 months and that he would use bingo to bring in funds. At the beginning of the year, the city issued the Social Service Agency a license to operate a bingo game for less than 300 players.

But Graham said he was too busy to operate bingo games and was encouraged by Councilman Robertson to bring in a nonprofit organization to handle bingo. Both Robertson and Colon serve on the Social Service Agency’s board of directors.

Last week, Graham presented what he described as a “multiple-choice document” to the City Council (acting as the city Redevelopment Agency). In it, he outlined some options the city could consider for running bingo. It was signed by both Mgrdichian and Graham.

In the five-page proposal, Graham said the Social Service Foundation was interested in purchasing or leasing the industrial building. In the proposal, Graham pointed out that adequate parking was a concern. The group would have to find ways to use the parking around the property and nearby areas without causing traffic congestion, Graham said.

The council did not act on the proposal, but Mayor Colon appointed a two-man subcommittee of Councilman Joseph Graffio and Councilman Tom Thurman to begin negotiations with the Mgrdichian group.

A first meeting took place Tuesday. Thurman said the meeting was to “to get to know the players on both sides.”

The initial meeting included former Assemblyman Leon Ralph, who is representing Mgrdichian; City Manager Gerald Caton and Thurman, Thurman said.

“It was a good preliminary meeting, but nothing was decided,” Thurman said.

Meanwhile, Robertson has become an opponent of the plan, saying he has changed his mind about locating bingo games on public property. “I have no problem using public property to feed our people, but public property should not be used for gambling,” he said.

Robertson said he did support bingo, but on a “much smaller scale.”

Mgrdichian said he became aware of the Social Service Agency when he visited City Hall to put in what ultimately was an unsuccessful bid for a residential trash contract. When he visited the Social Service Agency to make a cash donation, Mgrdichian said, he discovered it was looking for a bingo operator. He said he decided to get involved to help the agency.

“I have contributed to (charitable) projects in Compton and East Los Angeles and wanted to expand on that,” Mgrdichian said in an interview.

Graham said Mgrdichian last year at Christmas donated $2,500 to help supply toys and food to needy families in Cudahy and the nearby community of Bell.

Mgrdichian said he has never operated a nonprofit bingo game but got experience a couple of years ago running a bingo operation on the Soboda Indian Reservation near Hemet. He said he no longer operates the game.

Mgrdichian said the Soboda game made up to $25,000 a day, but he did not net much money because $20,000 went for prizes. He quit the business, which had 600 to 900 players daily, because “there were too many partners and I had no management control,” Mgrdichian said.

Mgrdichian said that working with him to form the Social Service Foundation is a group that includes three members of his family; Jose Hernandez, the manager of the Murcole plant in Compton; Louie Angel, his chef at the casino in Hemet; and Don Cadoo, an attorney who is a friend of Mgrdichian.