Strapped Pico Rivera Explores Casino Plan to Raise Revenue

Desperate for long-term solutions to their economic woes, officials in Pico Rivera have joined the ranks of other financially strapped Southeast cities who are thinking about taking a gamble on card casinos.

City officials have been meeting with MWB Development, which wants to build a $35-million casino on a lot in the northeastern part of the city. Two City Council members were selected to hold a series of public meetings to examine the level of public interest.

Three gambling clubs operate in the Southeast area: The Bicycle Club generated $10.8 million in fiscal 1991-92 for Bell Gardens; the Commerce Casino brought the City of Commerce $10.2 million, and the Huntington Park Casino generated $280,000 for that city.

Compton and Inglewood have agreed to allow casinos to be built in their cities. Voters in Lynwood and West Hollywood will probably decide the fate of similar proposals this spring. A measure that would have allowed gaming on the Queen Mary was narrowly defeated by Long Beach voters last November.

The Pico Rivera project, which eventually would have to be put to a vote, drew mixed response at meetings in December. Several more meetings are planned through the end of February, officials said.

“Some people think we should be trying to get industry in here to help with the budget, not this kind of element,” said Mayor John G. Chavez, who is on the two-person committee conducting the meetings. “What they don’t understand is that it is hard to attract (industry) these days.”

MWB has estimated that a new club could generate $5 million to $8 million a year for the city, and create 1,000 jobs. The city’s general budget is $14.9 million.

The MWB revenue estimates have stirred interest among city officials smarting from last year’s $1.8-million budget shortfall, which forced them to eliminate five full-time positions and impose a 5% utility-user tax. “Our general fund was bleeding badly,” City Manager Dennis Courtemarche said. “We’ve been making cuts for five years, and the recession has only compounded the problems.”

Courtemarche said a successful casino “could allow us to do away with some of the taxes and let us put money into reserves and toward worthwhile programs.”

But card clubs are not a sure bet. Huntington Park’s casino revenues have been declining the last three years, city officials said. The Regency Club in Bell closed in July, depriving that city of about $80,000 a month in revenue. The Regency Club is in bankruptcy, and its gaming license has expired. Another card club was built in Cudahy in 1989 but ran into financial difficulties and never opened. In Gardena, four card clubs have closed since 1982, leaving just two in that city.

However, s state gaming official said that she does not think that the area has reached the casino saturation point. “The cities that are looking at these clubs have big dollar signs in their eyes,” said Debbie Wiley, who heads the state’s gaming registration division in Sacramento. “And there is a heck of a lot of money still to be had.”

She said she thinks that casinos will benefit from the influx of Asian immigrants who thrive on traditional betting games.

High-stakes Asian gaming rooms already provide a huge source of income for casinos, said Los Angeles County Sheriff’s Sgt. Tom Budds, who heads the department’s Asian crimes division. “Essentially, these are high-value games,” he said, adding that hundreds of thousands of dollars can sometimes ride on a single hand. “This is where real money is.”

The developers of the proposed Pico Rivera club described the casino’s proximity to the large Asian populations in Monterey Park and Hacienda Heights as “highly desirable, as (they) play in greater numbers than other ethnic groups.” Most of the estimated 150 tables would be devoted to the complex Asian games such as pai gow , which uses domino-like tiles instead of cards, and is generally played in Cantonese.

MWB Development was formed late last year by two former Bell Gardens city officials--former City Manager Claude Booker and former City Atty. Peter Wallin--and real estate developer Michael E. Macke, who in the early 1970s was a board member of the Southern California Rapid Transit District.

Booker was fired last March after four longtime foes were elected to the City Council after a bitter recall of four council members in December. Wallin resigned shortly after Booker departed.

The casino is MWB Development’s first project.

So far, no financing has been secured, Booker said. He said the group plans to approach a number of lenders, including banks and other private investors. Courtemarche said Pico Rivera will not provide any funding.

The preliminary proposal calls for a 100,000-square-foot, multistoried palace-like structure to be built adjacent to the San Gabriel River (605) Freeway at Beverly Boulevard. He estimated that it would cost $6 million to buy the site. The proposal also said a new freeway overpass might be required.