Plan to Build Casino Complex Divides Cash-Strapped City : Development: The council sees chance to build tax base, provide jobs. Critics see it as a gamble that could lure criminal element.

There was a time when a Builders Emporium, a Velvet Turtle restaurant and an aluminum window factory that provides jobs to 300 people were desirable businesses for a city to have.

South Gate, however, says businesses like these cannot provide the megabucks the city needs today to make ends meet. So officials are proposing to tear down all three, along with three smaller businesses, to clear the way for the newest trend in municipal finance--gambling.

Voters will go to the polls in a special election Oct. 22 to approve or reject a proposal to build a 125-room hotel, restaurant and card club along the east side of the Long Beach Freeway at the intersection of Firestone Boulevard.

The proposed entertainment complex could net the city as much as $10 million annually in tax revenues, say backers of Measure A. And, Councilwoman Mary Ann Buckles says, the hotel and casino would bring 2,100 to 2,200 jobs to the city.

Opponents of the ballot question are calling the gaming proposal a “cruel hoax” and a “pie-in-the-sky” promise that will bring professional gamblers, crime, corruption and other social ills to the city instead of prosperity.

“It would be hard to say, ‘God Bless South Gate,’ when we depend on gambling money,” the Rev. George Jameson, pastor of the South Gate Foursquare Church, said last week at a press conference to launch the No on Measure A campaign.

Another opponent, former City Councilman John Sheehy, pointed to the Bicycle Club in Bell Gardens, saying it is an example of how tainted money finds its way into the casino business. A federal jury last year found that $12 million of the $22 million used in the construction of the club came from Florida drug smugglers.

At least one property owner on the proposed 17-acre casino site in South Gate said his firm will fight the ballot measure and, if necessary, wage a court battle to stop the city from condemning the land in an effort to acquire it for resale to the casino developers.

“It’s such a miscarriage of justice,” said John P. Cunningham, president of International Aluminum Corp. in Monterey Park, which owns International Window Corp. The firm built a factory and distribution center in 1970 on 15 acres at the southwest corner of the site.

Cunningham said last week that the window firm cannot afford to buy a new site with such an ideal location with the money the city would give him through condemnation proceedings. The site is not far from the Santa Ana and the Artesia freeways, both of which intersect the Long Beach Freeway.

Measure A has the support of the city manager and all five council members, who see the hotel and club as the financial salvation for a community that lost its industrial tax and employment base when the General Motors auto plant and the Firestone Tire and Rubber Co. plant closed a decade ago.

In June, the city had to grapple with a $1.2-million budget deficit. Unless it can tap new sources of revenue, officials say, deficits will become routine and the city’s ability to provide basic services will erode.

“It’s an economic necessity for the community leading up to the 21st Century,” Mayor Gregory Slaughter said of the proposed hotel and casino. “If South Gate is going to survive and grow, it is going to need a steady source of income. . . . When we look at the projected figures for the next five years, (expenses increase), the revenues decrease,” Slaughter said.

The mayor, who is a Santa Monica police officer, dismissed the claims of critics of the measure that gambling would automatically bring crime and corruption.

“My full-time job is a law enforcement job. . . . I’m not going to sit still for any project that is going to bring crime and corruption to the city,” he said.

Councilwoman Buckles said: “In my mind, (the complex is) a very positive way of bringing money into the city, and I think it’s a good idea.”

Revenue projections prepared by the developers and their consultants are that the city would reap $5.2 million in taxes in the casino’s first year of operation, rising to $10.7 million in the 10th year of operation. City officials said they could not immediately provide revenue figures for the existing businesses.

The casino complex would cost $40 million to build. However, that figure does not include the cost of acquiring the 17-acre site. The area was declared a redevelopment zone in 1974, which allows the city to buy the land and resell it to developers at less than the appraised value.

South Gate’s community redevelopment director, Andrew Pasmant, said the city has not yet appraised the land, so he does not know how much it will cost to acquire it or how much the city would charge the developer to buy it.

The Greater Los Angeles Development Group is the proposed developer. The principal in the company is Mary C.P. Wang, who, according to city officials, has built other hotels in the Southland.

Slaughter says the hotel and casino, combined with the South Gate Town Center, a commercial development already built on the south side of Firestone Boulevard, would make the city a powerful economic force in the Southeast.

Other cities, however, have found that hotels and casinos do not guarantee a city economic prosperity. It is true that the Bicycle Club generates at least $10 million a year in tax revenues for the city of Bell Gardens, but for each success story there is a failure.

Cudahy officials, for example, heavily promoted a casino development in their city called the Silver Saddle Casino that was to open late last year. However, the owners got into a court battle over control of the casino and, today, construction has stopped. The building stands empty and only 80% completed.

In Bell, a casino became embroiled in corruption and business fell off. A new group bought the casino, refurbished it and renamed it the Regency Card Club and Casino. But revenues there are only about $500,000 a month, less than half what they were when the club was in its heyday.

South Gate officials say they are not worried about their proposed casino being a success. The key to attracting business, they say, is the location and the trio of offerings in the complex--the hotel, the restaurant, and the casino. Pasmant noted that hotels and motels around the Bicycle Club enjoy a brisk business.