Bell Picks a New Pit Boss to Oversee Beleaguered Poker Club

City officials, nearing the end of a yearlong effort to make this the first city in the country to own a casino, have selected a new corporation to oversee the day-to-day operation of the beleaguered California Bell Casino.

California Casino Properties Inc. was chosen from four applicants to run the 8-year-old card club when the city’s Redevelopment Agency finally forges a takeover deal with the owners of the club, the officials said.

City ownership would be the last chance to save the once-successful gambling operation, which for three years has been plagued by financial and legal troubles that have threatened to shut it down, they said.

“We feel we have picked some very experienced people who will take decisive steps to recover player confidence (in the 560-seat poker parlor), said City Councilman George Cole after the council vote last week to begin talks between the agency and the prospective management group.

Organizers of the corporation, according to Cole, include Julius Kahn, a former director of the Las Vegas Dunes Hotel and Casino.

The manager would be Dennis Robie, who has also managed several casinos in Las Vegas and the Caribbean island of Aruba, he said.

City officials hope to sign an agreement with the group in two weeks.

The city wants a good-faith deposit of $1.2 million from the management group and a promise that the group would start an aggressive ad campaign to draw back players who abandoned the club in recent years for newer, flashier casinos in nearby Bell Gardens, Huntington Park and Commerce, City Administrator John Bramble said. The new operators would also remodel the aging casino at 4901 S. Eastern Ave.

In return, the city would offer the management company a chance to buy out the city’s interest at an undetermined future date. Bramble declined to discuss other details.

Cole, a member of the council’s Card Club Committee, said city officials “don’t want to keep this thing forever. We just want to see it back on its feet.”

Officials of the prospective management group were unavailable for comment.

The casino, once the largest poker parlor in the state, opened in 1980 to rave reviews. By 1983, the city was receiving about $2 million a year--15% of its total yearly revenues--in fees from the club. But a year later, the club’s fees to the city dropped to $450,651. Now, Bramble said, the club owes the city $848,000 in back fees.

The council passed a gambling law in 1980 after a decline in state funds threatened to put the tiny, working-class city in a financial bind.

Helped Pay for Services

During its heyday, the fees from the club helped the city pay for police and social services. But when club profits began to decline, city officials had to draw on city reserves to pay bills.

Bramble said that with a fiscally prudent management group using aggressive advertising, the city could expect to collect about $1.5 million a year in revenues.

But before a deal with the current owners can be completed, the Community Redevelopment Agency must sell municipal bonds to raise $7.7 million that the city has agreed to pay for the club, Bramble said.

The process could take up to 90 days, he said, but added that he is confident the city could take over the card club “within weeks.”

Since last September, the redevelopment agency has been wrangling in court to take the card club through eminent domain. Attorneys for California Bell Club Management Corp.--the current management group and the club’s general partner--initially fought the city’s takeover bid. They later dropped their objections after a series of negotiating sessions led by Superior Court Judge Pro Tem Herbert M. Klein.

Distribution Discussed

Klein and attorneys are meeting to decide how the $7.7 million would be distributed to the club’s investors and creditors, said Howard Manning Jr., attorney for the general partner.

The agreement came after 74% of the club’s 50 limited partners voted to sell their shares in the gambling operation and allow the management group’s four directors to negotiate a takeover deal with the city.

A separate civil suit, filed last year against the management by the limited partners, is still pending in federal court. Hearings are expected to begin in January on the suit, which claims damages under the federal racketeering law, said attorney Leo Branton, representing the bloc of minor partners.

The suit alleges that the four directors conspired to “systematically loot, plunder and convert for their own benefit the assets, cash, earnings, and property of the club.”

The limited partners’ suit seeks to recover financial losses anticipated in the takeover.

Manning declined to comment on the civil suit against his clients.

Profit-Skimming Scandal

The club has suffered other legal problems. In 1985, the club was involved in a profit-skimming scandal that eventually resulted in the convictions of two city officials. Former City Administrator John Pitts and former City Councilman Pete Werrlein Jr. admitted that they had conspired to form a secret partnership with poker club investors.

In May, acting on an anonymous tip about possible skimming of proceeds, Los Angeles County sheriff’s deputies led a raid on the club and the homes of its four directors, seizing financial and business records. According to one source close to the sheriff’s investigation, more than $2 million in canceled checks, believed to be used in the alleged skimming, was confiscated.

Deputy Dist. Atty. David Patrick Conn confirmed this week that the sheriff’s investigation is continuing. He declined to speculate about when the department and the district attorney’s office would release details of the investigation or if any charges would be filed.