Graton Resort and Casino marks 5 years with widening Sonoma County footprint

Five years ago, the largest casino in the Bay Area threw open its doors on the western outskirts of Rohnert Park amid much fear - and hope - about the ways it would change Sonoma County.

Thousands of people clogged Highway 101 and side streets to experience the debut of the $825 million Las Vegas-style gambling hub, built in a former cow pasture in a collaboration between a Nevada casino giant and a once-destitute Native American tribe.

Critics warned the 320,000-square-foot facility would lead to sharp increases in traffic, crime and personal bankruptcies while damaging the region's environment and depleting its groundwater supply. Advocates countered it would unleash an economic tidal wave that would create jobs, fill government coffers and lift the fortunes of a tribe whose traditional lands were taken away by Congress more than 150 years ago.

The true impact, however, has been more subtle - and more potent - than many had anticipated.

While traffic has calmed since the Graton Resort & Casino opened on Nov. 5, 2013, tens of thousands still pour into the massive gambling hall each week, according to its leadership.

All the while, the 254-acre casino property has become one of Sonoma County's largest private employers and cemented its status as a Bay Area tourist destination.

And the Federated Indians of Graton Rancheria, which owns the casino, has begun flexing its political muscle in new and significant ways, launching campaigns worth hundreds of thousands of dollars while the casino generates revenue that tribal leaders say is in the hundreds of millions of dollars.

Tribal members have benefited greatly from the casino since it began welcoming patrons. Graton's profits have funded annual payouts to members of the tribe, as well as the growth of social programs and college scholarships. Supporters of the casino say the broader community has benefited, too, both from the tribe's expanding charitable donations in addition to tens of millions of dollars in required contributions toward local government budgets.

“We had dreams of providing great jobs for people. We had dreams of supporting the local economy. We had dreams of furthering our mission of environmental stewardship and social justice,” said Greg Sarris, Graton Rancheria's tribal chairman. “In the last five years, we have done all of those things, I think, very well. I'm very happy about that.”

Before the casino opened, critics said the potential negative impacts would lead to an overall decline in the region's quality of life. They warned it would increase traffic and crime, and deplete the supply of groundwater in the surrounding area.

But congestion diminished just days after the casino opened, according to the CHP and city public safety officials, and the water issues have yet to surface. Increases in arrests and reports of illegal activity at and around the property are evident from local law enforcement data, but authorities and local government leaders say the trends are not unusual or unexpected, given the size and nature of the business.

“I still remember people saying how it was gonna be Armageddon or, on the other side, how it was gonna be this huge cash cow,” said Sonoma County Supervisor David Rabbitt, whose district encompasses the casino property, which is sovereign territory of Graton Rancheria.

“It's probably neither,” Rabbitt said. “It's operating, and it seems to have kind of found its place within the community, and the community has found its place with it.”

‘Best year ever'

Graton officials won't detail exactly how much money they are making from the resort, which is managed by Las Vegas-based Station Casinos. Tribal casinos are not required to make earnings public. But Sarris, a native of Santa Rosa, said revenues over the five years have now reached the hundreds of millions of dollars.

Sarris said 2018 has been the “best year ever.” From April through June, the resort recorded its most profitable quarter to date - a record that was immediately topped by the following quarter, which ended in September, Sarris said.

And among the resort's 19 most profitable days, 18 were this year, Sarris said in a November interview. The other date was the casino's very first day of business.

He attributed the success to “very bold” marketing, the debut of a new 9,000-square-foot nonsmoking area last month with about 300 more slot machines, and the resort entrenching itself further in Bay Area commerce and culture.

In November 2016, almost three years to the day after the casino opened its doors, Graton launched a new $175 million hotel that expanded the site by another 300,000 square feet. It includes a pool, spa and ballroom. The resort remains “jammed and booked and sold out,” Sarris said.

“The word is out, and spreading,” he said. “There's nothing like it.”

The resort draws nearly 10 million patrons per year, according to Graton officials. They declined to specify how many are local residents versus out-of-county visitors, but clientele remains predominantly Bay Area- based, said Kord Nichols, the resort's general manager.

“Our reach goes literally from Ukiah to south of San Jose, and, as we continue to grow, we continue to expand to all aspects of the Bay Area,” Nichols said.

With more than 3,300 slot machines and 131 table games, the Graton resort is the biggest in the Bay Area and among California's largest casinos, Nichols said. It has distributed more than 1 million casino loyalty cards to its customers, of which about 700,000 are active members, Sarris said.

Payments to government

The casino's customer base and finances paint a rosy picture of operations, but the gains for the local economy - an early promise of the enterprise - are tougher to pinpoint.

The land was once envisioned as the future home of a retail shopping center to be annexed into Rohnert Park city limits. If that had occurred, it could have led to sizable tax revenues, which evaporated the day the tribe paid $100 million for the property.

“That all died when it was sold to the casino,” said Darrin Jenkins, Rohnert Park's city manager. “It's an interesting hypothetical, but hard to say if we'd be better off or not. Things would be different.”

Through October, Sonoma County's third-largest city estimates it has lost more than $36 million that would have been generated through tax revenues if a different type of developer had acquired and built out the property. Some of that's offset, however, by guaranteed annual payments from the tribe to offset anticipated impacts to public services from its massive gambling hub. Over the past five years, the tribe has made more than $47 million in payments to the city, including $19 million to replace the city's lost tax revenue, required under a 20-year agreement between the tribe and Rohnert Park. Starting in 2017, the tribe also began paying the city nonguaranteed funds based on profits from its slot machines, so far totaling about $5.3 million.

The county signed a similar 20-year agreement with the tribe to ease impacts to local law enforcement, fire departments, traffic and water. To date, Sonoma County has received nearly $28 million in guaranteed disbursements, of which $19.3 million has gone to local law enforcement agencies and $6.5 million to area fire departments. The county has seen an additional $4.6 million from the casino in profit-based payments.

In addition, as part of the state compact that allowed the casino to be developed, California has received a total of about $7 million through quarterly payments that go toward oversight of gambling operations and other state programs, according to a spokesman for the California Gambling Control Commission.

The Graton tribe also has been meeting its commitment to a fund that distributes casino revenues among the state's 72 eligible, federally recognized tribes. To date, it has paid more than $43.3 million into the fund.

Measuring the economic impact on other businesses in the area is more difficult. Sales tax revenues, which make up about a third of Rohnert Park's annual budget, have been on the upswing during the five-year stretch but have not risen in a way that shows a specific effect from the casino, according to Jenkins.

“It didn't have that much of an impact to our sales. It's been pretty flat,” he said. “I think any attraction that has a lot of people visiting, some go to restaurants at the casino, some go to restaurants in Rohnert Park, some buy gasoline. So there are some economic benefits outside of the casino site itself, but how much of that there is I don't know.”

Increase in police calls

The casino's impact on public safety agencies is equally difficult to assess.

Incidents requiring the presence of law enforcement officers at the site have clearly increased. Calls reporting crime at the property jumped from about 100 in 2013, the year the casino was completed, to 755 in 2014, the first full year of operation, according to the Sonoma County Sheriff's Office. The number changed little in 2015 and 2016, and rose 21 percent year-over-year to 925 in 2017.

“Certainly they're higher,” Sheriff's Sgt. Spencer Crum said of calls for deputies to the area. “A casino was built. It would certainly be attributed to thousands of people going to the same location, a casino, which comes with gambling, drinking and drugs, fraud, theft.”

Crum referred to 2014 as “a spike year,” tied to the casino's opening and an agreement in place between the Sheriff's Office and the casino to station three deputies on site during its first year of operations. The casino ended that relationship the following year, no longer wishing to cover the law enforcement agency's overtime costs.

Arrests have remained steady for both violent crimes, including aggravated assault and robbery, and lower-tier offenses including car theft, drug possession and weapons violations.

“It's the new normal out there,” said Crum. “They didn't build a church, they built a casino. They're going to have calls for service.”

The lone homicide reported at the site occurred in a fight outside the casino in September, when authorities said a Lake County man shoved a Santa Rosa man to the ground, causing him to hit his head on a concrete sidewalk. Hermilo Andrade, 55, a longtime Santa Rosa Junior College employee, died three days later. The suspect, James Morgan Lewis Jr., 44, of Hidden Valley Lake, faces a charge of involuntary manslaughter.

The Rincon Valley Fire Protection District, which acts as the primary responder to the casino for fire and medical calls, has also seen a significant increase in calls there since 2013.

“No doubt, that is a regular response address for us,” said Cyndi Foreman, spokeswoman for the fire department.

The majority of calls over that time have been for medical aid, Foreman said. Many are for complaints of chest pain among casino patrons, but also include people who are intoxicated and parking lot assault victims in need of treatment.

Sarris said the resort works closely with sheriff's officials, who are able to send images of possible suspects that the resort can then use with facial recognition technology to target for quick arrest. Casino cameras can “count the hairs on your head,” Sarris said, making it a particularly bad place to commit crimes.

The operation has done little to win over longtime foes of the casino.

Chip Worthington, 72, pastor of Rohnert Park Assembly of God Crossroads Church, has been a leading voice of an opposition group since long before the Graton resort was built. The Stop the Casino 101 Coalition filed state and federal lawsuits to prevent its construction and ultimately lost its legal fights.

Worthington still assails the resort's role in the community.

“There's three major problems: Crime is rampant because of the casino; there have been thousands of personal tragedies because of bankruptcy; and prostitution is out of control,” Worthington said, adding that he believes area law enforcement underreports crime statistics associated with the Graton property.

Rohnert Park's Department of Public Safety, which houses a dual police and fire force and acts as a backstop for response by the lead agencies, has seen an increase in reports of crime at the resort.

Police responded to 187 incidents at the property in 2014, the casino's first full year of operations, up from 82 the previous year. After a dip in 2015, the number of calls for police assistance and officer-initiated actions at the property have increased in two consecutive years, reaching 296 last year.

Prostitution activity in Rohnert Park has fluctuated since the casino's opening. In 2016, police made 23 arrests for prostitution throughout the city, a number that exceeds the total during the two preceding years combined.

The department said the prostitution numbers are skewed. The one-year surge in 2016 reflects stepped-up sting operations targeting crimes that include pimping and human trafficking. The next year they fell back to eight cases and so far this year there's been just one.

On the whole, city officials aren't convinced there is a connection between crime and the gaming facility. The west side of town is also the location of several of the city's largest retailers, which are often targets for shoplifting, they said.

“I'm not comfortable linking it specifically to, ‘You showed up and now we have problems,'?” said Rohnert Park Cmdr. Aaron Johnson. “People would love to be able to say that is the cause. The stigma comes with the name ‘casino.'?”

Recent changes in the California criminal justice system have emphasized diversion programs for thousands of state prisoners, led to early releases for those imprisoned for nonviolent crimes, and dropped some drug crimes and property thefts from felonies to misdemeanors. Those actions, authorities say - on top of the legalization of recreational marijuana - have contributed to increases in crime throughout California. Rohnert Park is no exception, authorities say.

“These are pivotal moments in our judicial system that we are living through,” Johnson said. “I think it's hard to put a direct correlation with the casino. Altogether, in general, you need to look at the bigger picture, not just a single point of contact.”

To Sarris, the calls for police and fire service have a simple explanation: the fact that so many more people now come in and out of the area where the resort was built, patronizing a business open 24 hours a day, 365 days a year.

“You've got to consider the volume of people,” he said. “When you have that many people in one place, thousands of people going through there a day, of course things are going to happen that didn't happen before.”

Tribal fortunes improve

For the more than 1,400 members of the Graton tribe, the casino has been a benevolent influence for the past five years, according to Sarris.

The tribe doesn't publicly discuss its yearly payouts to members, and as a sovereign nation it is not required to do so. Under federal guidelines, tribes typically can funnel up to 40 percent of total casino revenues back to their members, though Sarris would not disclose details of Graton's allocation plan.

What he would divulge, however, is that a decade ago, 80 percent of the tribe's young people were dropping out of school, and now 90 percent are graduating from high school. The shift comes amid growth in the tribe's scholarship program, which covers the full cost of college tuition for any member who wishes to attend, and education-based requirements for members to receive annual payments from the casino.

In order to get the money, Sarris said members must have a high school diploma or a GED, pass a financial literacy course and pass a cultural literacy course so they “learn about the culture and history of the tribe they're a part of.”

Tribal member Patricia Miraz has experienced the casino's impact firsthand.

She started working for Graton Rancheria as an intern in 2013, helping in what is now the tribe's wellness and justice department. When she graduated from Sonoma State University in 2014, she was hired full time to be an employment and education coordinator and also started operating the tribe's scholarship program.

“Before the casino opened, the scholarship, we didn't really have that much funding for it,” Miraz said. “I think there may have been 10 to 15 recipients when I was getting the scholarship. And now we have at least 50 every year.”

Miraz, a 34-year-old single mother of three who is a cousin of Sarris, received financial assistance from a tribal program for needy families while she worked her way through school. She didn't possess a GED when she moved to Sonoma County in 2008, but she now has a bachelor's degree and is planning to pursue a master's degree in legal studies or go to law school.

Now, as an academic and career counselor for the tribe, Miraz helps other members take advantage of the same programs from which she benefited. The casino's financial support has had a major impact on her work, she said.

“There's just so many things that we can do now,” she said. “I drove to Modesto to see a whole family a couple months ago. I would have never been able to do that (before).”

The Graton Rancheria was a critical resource for tribal members affected by the October 2017 wildfires, when the casino provided more than $245,000 in assistance to 132 impacted families. Five of those families lost their homes, according to tribal officials.

The Graton resort also played a sizable philanthropic role during the disaster, donating $1 million to the North Bay Fire Relief Fund, which distributed $32 million in aid, including $20.5 million in direct payments to fire victims, students and first responders who lost homes.

Numerous casino employees were also affected by the fires. The resort provided hundreds of rooms free of charge to those who were evacuated, mostly in the early weeks of the fires, a spokeswoman said.

The Graton resort currently has about 2,000 employees, according to Sarris. The benefits provided to the unionized workforce, including 100 percent employer-paid health insurance, are a consistent source of pride for Sarris, who regularly touts the package offered to Graton workers in his interviews about the casino.

It has provided more than $100 million in employee benefits over the past five years, he said.

Flexing political muscle

In addition, the casino has provided the Graton Rancheria the resources to exert more influence in the political arena, as shown in this year's midterm elections.

The tribe was a key financial backer of Measure M, the countywide eighth-cent sales tax to fund public parks. It poured at least $307,000 into the Yes on Measure M campaign, according to the latest campaign finance reports.

It also reported spending at least $22,000 on advertisements to opposing Measure N, the $124 million housing bond put before Santa Rosa voters.

Tribal campaigns prevailed on both fronts.

Sarris cast the tribe's involvement in both measures as rooted in its commitment to environmental stewardship and social justice issues - and a sign of things to come.

“Expect the fight to be stronger in the future to protect those issues, to protect people in this community and protect the environment,” Sarris said. “We are here, and I think it's the first time in this community where, all of a sudden, there's been a player that hasn't been recognized that politicians and others are going to have to be attentive to.”

The tribe has long been a backer of county parks. Tribal leaders also put financial support behind Measure J, the failed 2016 ballot measure to provide a half-cent sales tax toward parks.

Under an agreement negotiated with the county prior to the casino's opening, the tribe has pledged to pay up to $25 million per year for public parks and open space preservation, once it has paid off its debt, met its other payment obligations and hit certain revenue benchmarks. Additionally, as much as $5 million per year would go to the county for environmental restoration and enhancement, including programs that provide organic produce to disadvantaged populations around the county.

Sarris said he expects to reach that all-important financial threshold within the next three to four years, noting more than half the debt has been paid off.

As for Measure N, Sarris said tribal leaders support the goal of creating more housing. But the tribe couldn't get behind the measure because it lacked provisions sought by allies in organized labor that would have dictated union benefits and rules for a greater share of bond-funded projects.

“We're not interested in repeating the same old paradigm where the builders make money and the workers build houses that they can't live in,” he said.

While meeting its required quarterly payments to the city, county and state, the Graton tribe has also recently made about $2.5 million in charitable contributions to local groups and organizations, including Sonoma State University, the Cotati-Rohnert Park Unified School District and the Rohnert Park Senior Center.

The nonprofit Redwood Empire Food Bank was the recipient of a $280,000 grant this year as well, which CEO David Goodman said helped support the distribution of $1.85 million worth of groceries throughout the community, including a food basket program for Rohnert Park seniors. He called the tribe a “formidable ally” in the battle against food insecurity.

“They have the capacity and ability to effect change in a positive way for people that are in need of food,” said Goodman. “Hunger is at the very foundation for what it takes for everybody to survive and thrive and succeed. We're grateful that they picked this issue.”

Considering housing, offices

Looking ahead to the next five years, Rabbitt, the county supervisor, said the tribe's involvement on groundwater sustainability issues will be critical as the region continues its state-mandated efforts to monitor the limited resource. To date, the casino operation has not resulted in declines in the supply and quality of groundwater, city and county officials say.

The tribe could also play a role in helping the county address its long-running housing crisis, Rabbitt said.

“(Graton) quickly became one of the larger employers in the county. I would imagine that we need to look at where the workforce housing is going to be,” Rabbitt said.

Tribal leaders are contemplating building some housing on approximately 35 acres they own in front of the casino. Sarris said they're also looking to construct their own office building there, perhaps a community center and otherwise have “huge plans” for the remaining 100 or so acres at the casino site, including developing an organic farm.

The tribe may eventually double the number of hotel rooms at the resort, as well. An environmental study on the proposed project was completed in January, but its exact timing and scope are in flux.

“We'll definitely expand. We just have to think when and how,” Sarris said. “We have a beautiful design here, and I'm very concerned that the way in which we add to this does not mar the aesthetic.”

The city and county, as well as the state's Department of Transportation, cited in the environmental report a number of concerns tied to the construction and expansion. Given another 200-room, 211,000-square-foot hotel expansion was not part of the original agreement, the city also believes further negotiation would be appropriate for more guaranteed funds should it eventually be built.

“We're constantly looking at what else can be mitigated on the impacts to residents,” said Jenkins, the city manager. “It's an ongoing process.”

For Sarris, an author and writing and Native Studies professor at Sonoma State who had never before run a casino, the past five years have proved an ever-evolving learning experience.

“My own prejudices about the casino business have certainly been checked,” he said. “Most people don't know much about people who gamble and make assumptions. I was one of them. And I learned differently. ... I'm still learning.”

You can reach Staff Writer Kevin Fixler at 707-521-5336 or kevin.fixler@pressdemocrat.com. On Twitter @kfixler.