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Will the Proposed $1.2 billion Point Molate Casino-Resort
Really Create 17,000 Jobs?


By Katherine Tam and John Simerman, Contra Costa Times, Walnut Creek, Calif.McClatchy-Tribune Regional News

July 06, 2010--It's a big number. A bold, five-digit jobs jackpot for a community beset by one of the Bay Area's highest unemployment rates.

The figure -- 17,000 jobs -- shows up in documents, fliers and at packed City Council meetings -- wherever support musters for a big casino-hotel resort proposed for the old Point Molate Navy Fuel Depot in Richmond.

But is it accurate -- or a bloated guess based on generous assumptions and deceptive economic "multipliers"?

The developer asserts the 17,000 figure is probably realistic, assuming an economic ripple for local vendors -- including money that casino workers would spend. But critics and some gaming experts say the jobs estimate far exceeds the actual work force at most casino resorts.

In a city with 17.5 percent of its residents unemployed, just how many jobs the resort would create -- and whether any other project there could come close to that number -- has become a key issue in the political divide over the projected $1.2 billion plan.

Under a current agreement, the Guidiville Band of Pomo Indians would hire Richmond residents for 40 percent of the nonmanagement casino and hotel jobs. Developer Jim Levine of Upstream Point Molate LLC pegged that pool at 3,000 workers, meaning at least 1,200 spots would be set aside for Richmond. Levine said the casino plans to go beyond that pledge to include 1,500 on-site workers in retail, entertainment and other services.

The tribe plans to tap older people for part-time jobs with prorated benefits, he said.

"We think the over-50 population in Richmond is a tremendous source of employee talent," Levine said.

The jobs estimate is the work of Las Vegas-based Gaming Market Advisors, which was hired for the environmental study. The same consultant estimates 9,300 direct jobs during construction -- although those are not actual jobs, but "man-years" stretched out over a years-long construction schedule. A "man-year" is the work of a full-time employee, or two half-time workers, in a calendar year.

The casino plan calls for as many as 4,000 slot machines, 1,100 hotel rooms, a conference center, restaurants, shops, tribal headquarters, open space and trails.

Big resorts, smaller staffs

Some of the biggest resorts in the state employ far fewer people than what the environmental study for Point Molate suggests:

-- The Pechanga Resort in Southern California, the state's largest, has a work force of about 4,300 to run its 188,000-square-foot gaming floor, 517 hotel rooms, spa, retail, restaurants, comedy club, theater and a ballroom where live championship boxing is broadcast by Fox Sports Network and HBO.

-- Thunder Valley Casino Resort in Lincoln, Placer County, which features more than 3,000 slot and video machines, a 17-story hotel, outdoor amphitheater, restaurants and a spa, employs about 2,400.

-- Cache Creek Casino Resort in Brooks, Yolo County, has about 2,400 on its payroll for a casino with 3,000 slot machines, a 200-room hotel and a 20,000-square-foot events center.

North America's largest gaming resort, Foxwoods in Connecticut, boasts 7,352 slot machines, four hotels, two theaters, 170,000 square feet of conference space, a museum, research center, restaurants, retail stores, spas and two golf courses. It employs 9,000.

Levine defends the Point Molate jobs estimate, saying that billion-dollar resorts hire thousands of workers.

Project opponents say supporters are simply repeating inflated estimates by the consultant.

"Those numbers are being used to generate support for the project throughout the community and within the union ranks," said Richmond resident Joan Garrett with Citizens for a Sustainable Point Molate. "It's not fair when people are looking for a real job opportunity to dangle a huge and unrealistic carrot around. It just seems irresponsible."

The 17,000 jobs claim is based on a multiplier Contra Costa County uses to estimate broader economic benefit of local business. The 12,000 direct operational jobs include outside vendors for services such as food, laundry and transportation.

Subtleties, variables

Critics and some industry experts question whether the calculation captures the whole picture, given that the casino could siphon spending money from local gamblers. If its main customer base is the East Bay, that could shift spending from other activities, reducing revenue and jobs from local restaurants and other employers.

The environmental consultant estimated $813 million in annual gaming revenue for the tribe and its investors.

"Those are the subtleties," said Bill Eadington, director of the University of Nevada's Institute for the Study of Gambling and Commercial Gaming. "The key variable is, where do the customers come from."

Estimates vary widely. William Thompson, a University of Nevada-Las Vegas public administration professor who has written extensively on gaming, figured Bay Area gamblers would contribute nearly two-thirds of annual gaming revenue for the resort. In a study funded by card clubs that oppose it, Thompson predicted a net loss for the region of more than $200 million per year -- local money sucked from the Bay Area economy.

Gaming Market Advisors, meanwhile, estimated more than half the gaming revenue would be redirected from other gambling outlets mostly in the Sacramento area and beyond.

A divided City Council in May extended the land disposition agreement with Upstream to April 2011 to finish negotiating details including financing and design. The sides are discussing added steps the tribe must take to maintain the local hiring numbers, Levine said.

Ultimately, the council must certify the final environmental study for the project to move forward. A vote is not expected until next year. The city plans to hire a consultant this summer to lead public workshops on alternative ideas that Upstream would consider.

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To see more of the Contra Costa Times, or to subscribe to the newspaper, go to http://www.contracostatimes.com/.

Copyright (c) 2010, Contra Costa Times, Walnut Creek, Calif.

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