Anger over Graton casino land deal resurfaces in garbage talks

Still stinging over the price it paid an influential businessman for the site of the Graton Resort and Casino, a North Coast Indian tribe has not yet complied with an agreement that requires it to hire the company that owns the rights to haul garbage in Sonoma County.

Under an agreement with the county, the Federated Indians of Graton Rancheria, which owns the casino, is required to use the Ratto Group to haul waste from the gambling complex just outside Rohnert Park. But since the casino’s Nov. 5 opening, the tribe has used a rival company, Industrial Carting, to take its garbage to the landfill.

Lawyers for the tribe and the Ratto Group say they continue to negotiate but have not been able to agree on a rate structure. But tribal chairman Greg Sarris said the dispute is more personal and stems from a land deal he made in 2005 with James Ratto, founder of the Ratto Group, and two other real estate investors.

Sarris said he is still upset about the $100 million price tag for the 279 acres of land on which the casino now sits. Las Vegas-based Station Casinos, which manages the casino, paid the sum in 2005 on behalf of the tribe. The tribe is required to repay Station Casinos.

Ratto, Dennis Hunter, a longtime partner of Ratto in the garbage business and founder of Ygrene Energy Fund, and Clem Carinalli, a former Ratto partner and developer who later went bankrupt, bought the land for $11.4 million and made nearly $90 million on the sale, a record profit for a Sonoma County real estate transaction.

When asked why the tribe has not hired Ratto’s company to haul its garbage, Sarris said: “We wanted to try and use our own. I don’t like what Ratto did to us. In my opinion, we paid way more than the land was worth. That’s why I’m not fond of him at all.”

Sarris has said the land purchase was the result of a lengthy process in which the tribe was pressured to abandon its two previous casino sites in the face of public opposition and environmental constraints. Relocating again was the only way to minimize that opposition, he said.

A spokesman for the Ratto Group would not comment on the dispute. Eric Koenigshofer, a former Sonoma County supervisor and a lawyer representing the Ratto Group, said the company is close to reaching an agreement with the tribe to start garbage hauling.

“At this time, we are meeting with representatives of the casino and trying to work out the details of an agreement,” he said. “It is my belief that we will have an agreement in a few weeks.”

He declined to state the terms or the rates that are being discussed, and he declined to give an opinion on why the company and tribe were at an impasse.

The Ratto Group has collected garbage in Marin and Sonoma counties since 1986. The Santa Rosa-based conglomerate, which does business under a number of different names including North Bay Corp., Redwood Empire Disposal and Santa Rosa Recycling and Collection, has waste collection contracts with the county and a number of North Bay cities.

In 2009, the company signed a 20-year franchise agreement with the county, agreeing to pay an annual franchise fee of $2.8 million.

According to Sonoma County’s agreements with the tribe, the latest signed in 2012, “the tribe will direct all of its refuse to the county’s franchised hauler for disposal and/or processing at the county-owned solid waste facilities, and the tribe will pay the franchised hauler for such collections and disposal services in accordance with the rates authorized in the county approved in the franchise agreement.”

David Rabbitt, chairman of the Board of Supervisors, said the county required the casino to use its franchise hauler to ensure the waste ends up in the county’s Central Landfill and reduce air pollution from garbage trucks.

“We want to meet all of our diversion goals,” he said. “Ultimately, we want the trash to end up at Central.”

In the absence of a contract with the Ratto Group, garbage from the 340,000-square-foot casino - one of the county’s largest commercial facilities with four restaurants, three bars and a food court - has been hauled by Santa Rosa-based Industrial Carting, according to Susan Klassen, director of the county’s Transportation and Public Works department. Industrial Carting delivers the waste to the Central Landfill, said Klassen, whose department oversees the county landfill and solid waste disposal.

Curtis Michelini, owner of Industrial Carting, did not return multiple phone calls seeking comment. The Ratto Group’s municipal waste contracts have shut out Industrial Carting from much of the garbage business in Sonoma County, and Michelini has been a frequent critic of Ratto.

Rabbitt said the tribe and the Ratto Group have been negotiating in good faith, but added there are “unique circumstances with a sovereign nation in our midst.”

As a sovereign nation, the tribe is immune to most litigation. Trying to sue a tribe would be like trying to sue the government of France, Indian legal experts say.

“Indian tribes cannot be sued without their consent,” said Stephen Pevar, an Indian law expert with the American Civil Liberties Union.

The tribe’s agreement with the county includes a waiver of sovereign immunity, which means that, on matters included in the agreement, the county could take the tribe to court. The agreement also spells out different levels of mediation that the two parties must explore to resolve disputes before involving the legal system.

County Counsel Bruce Goldstein said the county does not consider the tribe in violation of the memorandum of understanding, or MOU, since it is working out a deal with the Ratto Group. It has been difficult to determine the proper price structure for the casino’s garbage contract because it is a “unique facility” located on tribal land outside of municipal jurisdictions, where garbage rates already have been determined, he said.

Goldstein said the county is staying out of the negotiations between the company and the tribe. The tribe so far has met all of the other requirements of its agreement, including making its quarterly payments to the county to offset the casino’s impact on municipal services, he said. Those payments are expected to total $5 million per year.

“If they do not come up with an agreement, they would be in breach of the MOU,” Goldstein said.

You can reach Staff Writer Matt Brown at 521-5206 or matt.brown@pressdemocrat.com.