El Dorado County-Red Hawk Casino revised agreement doesn’t help Lake Tahoe area


By Kathryn Reed

Red Hawk Casino and El Dorado County have rewritten their agreement from 2006 and still the Lake Tahoe Basin portion of the county isn’t getting a dime.

“We’ve had the biggest negative impacts on the East Slope. They get all the positives and we get all the negatives,” South Lake Tahoe City Councilman Tom Davis said of folks in the Placerville area.

The South Shore economy tanked for a variety of reasons – a big one being the proliferation of Indian casinos on the three main routes into the Lake Tahoe Basin – Red Hawk on Highway 50, Thunder Valley near Interstate 80, and Jackson Rancheria along Highway 88.

Red Hawk Casino has had financial issues since it opened in December 2008.

The 2006 agreement stemmed from a settlement involving a lawsuit the county had filed against the Shingle Springs Band of Miwok Indians in regards to the interchange that needed to be built to access the casino from Highway 50, along with environmental concerns.

Ultimately, the Indians agreed to pay the county $5.2 million a year for 20 years.

“All the money that the tribe paid to the county was for mitigation … the negative impacts we expected when the casino went in,” Ed Knapp, who today became chief county counsel, told Lake Tahoe News. “The original agreement hammered out with the tribe was the richest agreement ever in American history of a local public entity and an Indian tribe.”

This was pre-recession, and although gaming was declining, it was still a huge reason to come to the South Shore. Red Hawk opened in December 2008.

While officials on the South Shore made noise about how the Indian casino would be bad for the basin section of the county, the supervisors only saw the potential dollar signs in front of them. What they didn’t listen to were projections that gamblers stopping in Shingle Springs would never make it to Tahoe so it negatively impacted the county as a whole.

No money from the tribe has been used to mitigate that negative impact.

The money must be “spent on things impacted by the casino,” Knapp said.

Davis told Lake Tahoe News, “I always advocated some of that money should come to the East Slope because our casino business is impacted.”

Not a penny has been spent in Tahoe on Red Hawk’s impact on the South Shore.

“The business community is unclear as to why El Dorado County would in essence subsidize poor business performance of one select business to the detriment of the county’s citizens, especially those located in the Tahoe basin,” B Gorman, CEO-president of Lake Tahoe South Shore Chamber of Commerce, told Lake Tahoe News. “While we may not have all the relevant information, it is difficult to understand why such a concession would be given to a gaming business that has wrought such harm on our local economy.”

The 2006 agreement said the money was to be used to build carpool lanes on Highway 50 near the casino to alleviate what officials’ thought would be a dramatic increase in traffic. The traffic didn’t materialize. And then the federal government offered stimulus money for the same roadwork.

Three payments by the tribe have been made to date. Half was spent to get what became the federal project shovel ready and the other half is sitting in the bank.

County Supervisors Jack Sweeney and Ron Briggs, who are on the Indian Gaming Special Distribution Funds committee, got the revised agreement on a November agenda. It passed 5-0.

Supervisor Norma Santiago said, “There is nothing to indicate Tahoe got screwed. (The money) can be used for specific roads in the area impacted by the casino. The entire county made out very well in the deal.”

But neither she nor Knapp could explain how the entire county benefits.

The new deal calls for $2.6 million to be paid by the tribe to the county for road improvements in the general area of the casino.

The other $2.6 million will be given back to the Miwoks for the tribal health clinic. The clinic is open to all county residents.

However, instead of being billed for services rendered, the county is paying a flat fee for the health center even if not a single Band-Aid is ever used on a non-tribal county resident.

In some respects, the new deal amounts to the county only collecting half of what it was originally promised.

This is good for a casino that is financially troubled and just recently renegotiated the deal it has with the state.

Then there is the little issue with the county budget having not been revised, so the $2.6 million check that is due by Dec. 14 can’t be written to the tribe.



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Comments (9)
  1. Joe Doaks says - Posted: December 8, 2012

    I screamed bloody murder that the original contract was riddled with loopholes and if the Miwoks decided to welsh the country was screwed. Lou Green and others including Ed Knapp said nothing could be done as their bosses, the board of supervisors, wanted the rotten deal. So here we are today. Want to bet the Miwoks further reduce their contributions to the county?

  2. Steve says - Posted: December 8, 2012

    It is unclear how revenues, fees and taxes that formerly went to a different state and county, but now are directed to the State and County in which the City of South Lake Tahoe is situated, is or has been harmful.

    And if Red Hawk hadn’t been built, Bay area and Sacramento gamblers would have simply been diverted to other close-by casinos such as Thunder Valley, Cache Creek, Jackson Rancheria or any of the other 65 Indian casinos in California.

    Confused South Shore officials are simply confounded by competition.

  3. Not Born on the Bayou says - Posted: December 8, 2012

    Joe Doaks – Native Americans potentially hosing the white man instead of the other way around – now isn’t that rich?

    Probably a good thing in the long run, to light the fire faster under South Shore to move away from gambling (gaming is such a hokey substitute word) and get the destination attractions of the future better designed, established, and communicated to future visitors.

  4. Parker says - Posted: December 8, 2012

    For the record, I bet the majority of people in the City of Placerville don’t like Red Hawk! In talking to many people down there, the Casino not only competes with their restaurants and activities, but businesses in Placerville rely heavily on the Tahoe to and from traffic!

    Also for the record, having been in Red Hawk a couple times, wonder how it benefits Native Americans? Are any employed there?

  5. Red Dog says - Posted: December 8, 2012

    The agreement between County and Miwoks aka Red Hawk Casino is not about competition problems for Tahoe its about the County’s failure to adequately administer a contract that was flawed from the start. And let’s be clear, Tahoe has zero representation on the Board. Norma made many promises to this community that about ten or twenty percent of the $100 MILLION dollar agreement with the Miwoks would be spent in Tahoe. Yes, $100 to $200 Million was promised by the Miwoks to the County. The economic study touted by the County to support such claims was never released to the public, considered confidential.

    The agreement was supposed to fund police, fire, construction projects and pay for Tahoe economic development and job training. And now the County is paying the tribe. A very nice switcharoo, but not for County or its residents. Where is Norma’s outrage at this for Tahoe? Or the Supervisors who should be grilling the Miwoks at their handling of the money?

    When the Miwoks came to the county, the Sups with dollar signs in their eyes began salivating over the slot machines in their neighborhood and once the $100 million dollar promise was made by the Miwoks, the County didn’t seem to read all the caveats to protect the Tribe from ever having to turn over the money … the $100 million bucks was to come from future earnings over twenty years, AFTER the health center would be built and only after the roadway improvements, in spite of all the protections up front for the tribe, the County rolled over giggly eyed with dreams of sugar plums, fairies and cash from the sky. In spite of the Supervisors’ promises, they have failed miserably to collect on the deal so let’s renegotiate the agreement. Aren’t some of those Supervisors supposed to be experts in contracts? Briggs is a commercial real estate guy right? Has there ever been a more ridiculously uncollectable agreement for $100 million bucks? Where’s the audit of the Miwoks books? There are far more questions in than the County is answering.

    Need a refresher course? (county refuses release economic study)

  6. Bill Swim says - Posted: December 8, 2012

    It’s all cash, how much money do they really make?

  7. copper says - Posted: December 8, 2012

    If anyone imagines that transfering City services, or even the entire City of South Lake Tahoe, over to the weird political control of El Dorado County and Placerville, needs only to read this story, and research the history.

  8. Tom Wendell says - Posted: December 9, 2012

    I think the NBOTB nailed it pretty well.
    “Probably a good thing in the long run, to light the fire faster under South Shore to move away from gambling (gaming is such a hokey substitute word) and get the destination attractions of the future better designed, established, and communicated to future visitors.”

    The Lake Tahoe Basin offers visitors something no garishly light, noisy, money grubbing edifice to cheap thrills, gluttony and the almighty dollar can offer. I refer it to the healing power of nature—the ability of a waterfall to inspire awe and rejuvenate your senses with negative ions. the exhilarating feeling of crisp, pine scented air filling your lungs, a multi-colored sunset to bring a sense a peace and closure to the day. The wondrous life of a meadow as the birds, snakes, coyotes and other wildlife go about their daily dance of life.

    And if these wonders of nature are too subtle to satisfy the adrenaline junkie in you, well, there’s always skiing, boarding, gliding, road and mountain biking as well as subtler ways to enjoy our incredible environment like sailing, kayaking, SUP, canoeing, swimming, fishing, hiking, cultural activities. …the list goes on.

    Find your bliss. If it’s standing in front of a clanging slot machine waiting for the money gods to grace you with a few coins, may you find peace there. IF clean air, a meandering creek and the sight of a bald eagle with a fish in it’s talons is more your speed… then c’mon up. The air is pure and the memories will sustain you the next time you’re stuck in a mile long traffic jam.

  9. Ryan Payne says - Posted: December 9, 2012

    Steve, your comment is right on the money! (pun intended)
    …. and ….
    Very well stated, Mr. Tom Wendell!

    To the powers that be: The casinos in the South shore no longer draw the crowds to this area like they did in the past and NOTHING can change that. (except for maybe changing the casinos, but that discussion is for another day) It is pointless to point fingers elsewhere at this point. Get the POINT???

    Focus on the future. Visualize what tomorrow has to offer. It need not look like the past as that would not be forward thinking!