KELSEYVILLE – Supervisor Rob Brown said his trip to Sacramento on Monday to speak with lawmakers about concerns regarding a potential casino deal at Konocti Harbor Resort & Spa went well.
Brown made the trip in order to share concerns about the casino proposal by Kenwood Investments, which is in negotiations with the resort's owner, UA Local Convalescent Fund.
Earlier this month, the Board of Supervisors voted to accept a resolution authored by Brown that states the county's opposition to an Indian casino being located at the resort.
Last month, two local tribes, the Elem Pomo of Clearlake Oaks and the Habematolel Pomo of Upper Lake, both confirmed to Lake County News that Kenwood Investments had approached them about being part of a multi-tribe casino at Konocti Harbor.
On Monday, Brown met with representatives from the governor's office, as well as staffers from the offices of Assemblywoman Pat Wiggin, Assembly Speaker Fabian Nunez and Senate Leader Don Perata. Brown said he also met with Assemblywoman Patty Berg and two of her staffers.
“Every one of them felt the same way that we did, that it didn't make sense that a developer would be able to come in and pull that off,” Brown said.
He reported that those he spoke with didn't feel that Gov. Arnold Schwarzenegger would make allowances for such a deal, which he would ultimately have to approve. There also were assurances from lawmakers that they would watch the matter closely, said Brown.
Brown took some of the petitions against the casino, which he began circulating around his district last month, with him to Sacramento. He estimates he has a “couple thousand” signatures, and noted that petitions are still coming in, because the deadline is March 1.
The officials he met with Monday, Brown said, were impressed by the local effort to stop the casino deal, especially the board's resolution and the signed petitions.
Whether or not Kenwood Investments still plans to purchase the agreement isn't known, said Brown, because no one is talking.
The resort also is at the center of a federal lawsuit lodged against Local 38 of the United Association of Plumbers, Pipefitters and Journeymen, which controls the UA Local Convalescent Fund, Konocti Harbor's owner.
The Department of Labor (DOL) filed the lawsuit, alleging that Local 38 diverted $36 million in assets from five employee benefit plans to renovate and operate Konocti Harbor.
Court documents show the Department of Labor had the resort appraised. Brown said the county has seen two appraisal amounts for the resort: $8.5 million as a nongaming venue, or $11 million if it included gaming.
Local 38 has disputed these findings, according to court documents.
Lawrence Mazzola, Local 38's business manager, financial secretary and treasurer, told the court in a signed statement that in 2000 he became aware that the convalescent fund defaulted on two loans totaling $11.6 million held by Imperial Bank. Court documents report that the bank began foreclosure proceedings on the loans in 1993, but that the foreclosure action was resolved that same year. Mazzola said in 2000 he was able to resolve the debts for $6 million.
A letter from Mazzola to Local 38 members dated Jan. 22, gave an update on the federal suit.
In the letter, Mazzola stated DOL had “indicated a desire to settle the case.” He said DOL and Local 38 representatives had made “substantial progress” in a Jan. 16 meeting.
Mazzola reported a meeting was scheduled for Feb. 16 to discuss a possible settlement. That meeting was to have included representatives of DOL and Local 38, including Mazzola himself.
“We hope to conclude the mediation and settlement process at that time,” he wrote.
However, calls to the DOL and to the office of James P. Baker, Mazzola's attorney, seeking information on the meeting's outcome were not returned.
Brown said the county also has been unsuccessful finding out what, if anything, came out of the meeting.
Mazzola's letter told union members that Local 38 was in the “due diligence period” of the Konocti sale, which they expected to complete soon.
His letter stated that Indian gaming, combined with Konocti Harbor's rock concert venue and amenities, would only enhance Konocti Harbor's reputation as one of the country's most prestigious resorts.
Mazzola told Local 38 members that the union hired Whitestar Investments to do an in-depth study to find Konocti Harbor's highest and best use, and that Whitestar concluded the resort's best use would be a combination of an Indian gaming resort, concert venue and residential development that included condominiums and homes.
“When Indian gambling is in full operation at Konocti our pension fund will be guaranteed an excellent return on its investment,” Mazzola's told union members in his Jan. 22 letter.
What a difference a month makes.
Since Mazzola's letter, the board passed its resolution against the casino plan, although when last he spoke with Kenwood representatives, Brown said they indicated the sale still was under way.
However, Brown added, it makes no difference who the developer is; if the convalescent fund has a contingency on the resort's sale that it must be an Indian casino, problems still will remain.
“We're afraid that contingency would still be there,” he said.
Brown has a trip to Washington, D.C. planned for next week, March 5-8, to continue lobbying lawmakers against the casino deal happening. He said he'll be finalizing meetings with lawmakers on Wednesday.
Brown said he wants commitments from Sen. Dianne Feinstein's office, the Bureau of Indian Affairs and the Secretary of the Interior that they will oppose any casino plan like that proposed for Konocti Harbor if it doesn't have local support.
E-mail Elizabeth Larson at
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