No dice on Tukwila gambling; Council sets the clock for local casinos to 2016

The days for the Great American Casino - as well as its neighboring card rooms, the Gold Nugget and Riverside Casino - are now numbered. A Feb. 22 vote by the Tukwila City Council has set a closing date of Jan. 1, 2016 for these privately owned casinos. The vote also means that as of 2016, Tukwila will be a casino-free city.

Tukwila’s Great American Casino General Manager Mark Palmer sits at a blackjack table with dealer Yung Thach March 10.

The scene at Great American Casino the afternoon of March 4 was the same as it usually was: people, many of them senior citizens, gathered around card tables, accompanied by the low buzz of conversation from the casino dining area as waitresses bustled between tables. Outside, the parking lot was moderately filled, as traffic steadily buzzed by on Tukwila’s Interurban Avenue.

The scene was the same, all right, but it came with a difference:

The ticking of a clock.

The days for the Great American Casino – as well as its neighboring card rooms, the Gold Nugget and Riverside Casino – are now numbered.

A Feb. 22 vote by the Tukwila City Council has set a closing date of Jan. 1, 2016 for these privately owned casinos. The vote also means that as of 2016, Tukwila will be a casino-free city.

That decision – which came on a 4-3 vote following emotional testimony from both residents and casino representatives – is the result of an either-or decision the Council felt compelled to make: either let casinos open in any part of town where restaurants can be, or not let any casinos operate here at all.

“It was a very tough issue,” said Councilman De’Sean Quinn, who along with councilwoman Verna Seal and Council President Allan Ekberg, voted against the Tukwila moratorium on casinos.

Quinn, who noted casinos really aren’t part of his vision for the city, said his vote against the ban came from the financial problem it represents:

The city will lose between $2.1 million to $2.4 million every year in the gambling tax it now receives from the three casinos here. It also means a total of 450 people from these casinos will lose jobs – many of which are family-wage careers.

“I couldn’t allow the moral component to come in without thinking of the financial issues,” Quinn said.

“We’ve just created a self-inflicted wound to our revenue source.”

The Council’s decision also inflicts a wound on an industry that in Tukwila is worth about 450 family-wage jobs.

Even with the five-year sunset period, “it’s making it hard to run a business with this hanging over our heads,” said Mark Palmer, general manager of Great American Casino, who has 156 employees here.

And as to the employees who would be displaced by closing, especially in such a difficult economic climate, Palmer said it would be difficult for them to find something that paid as well.

“They couldn’t work at McDonald’s for what they’re making here,” he said.

For the majority of the Council, it was the issue over local control that spelled out the upcoming prohibition on card rooms in Tukwila.

Councilman Dennis Robertson, who with fellow members Joan Hernandez, Kathy Hougardy and Joe Duffie voted for the ban, said if the city couldn’t dictate location of the state-regulated casinos, then it was best to leave the industry behind, for the sake of residents, a number of whom showed up to express their distaste for the casino industry at the Feb. 22 meeting.

“If we can’t control where they locate, then they can locate anywhere,” Robertson said of casinos here. “Do I want one next to my house? No.”

The five-year sunset, he said, gives those businesses time to amortize their investments before decamping the city.

“What we voted for was a graceful way for the businesses to leave without severe financial problems,” Robertson said. “Most people who get laid off don’t get five years’ warning.”

But as of this point, there is no plan as to how the city will even make up that major spending gap.

“We’re still going to be short $2.1 million to $2.4 million,” said Councilwoman Seal. “How are going to find a way to make up that lost revenue? We don’t have a plan. We worked hard last year to close a $9 million gap, and we’re coming into this year still behind.”

For the representatives of the Great American Casino, the city’s stance is baffling and unfair.

“It’s almost like this city is saying the Deja Vu strip club is more acceptable,” said casino Manager Christy Henry, of the exotic-dancer club which operates in Tukwila city limits.

But Deja Vu, in spite of questions over its enticements, doesn’t operate a casino, and therefore is not subject to state gambling oversight.

The gambling is the key reason why this whole issue came up at all: Tukwila’s previous ordinance on casinos actually grandfathered in the three cardrooms, but prohibited any others from coming to town.

But then last year, another casino company showed interest in opening a fourth casino in Tukwila – this one out of the former Denny’s Restaurant in Tukwila.

That, according to city attorney Shelly Kerslake, is what brought that earlier city ordinance with the grandfather clauses into full focus.

“The city had an ordinance that grandfathered the existing casinos, and prohibited newer casinos in the city,” she said. “There is a law on the state books that says you can’t do that.”

Kerslake said state law allows card rooms in cities where there are restaurants, meaning a city’s hands are effectively tied when it comes to saying where it is okay for a casino to operate.

“If they say, ‘you can only have it here, and not there,’ that would directly conflict with what the state statute allows,” Kerslake said.

But Palmer, of the Great American Casino, disagrees with that assessment, pointing out that other cities, such as Renton, have what are called “blue zones,” keeping casinos operating in specifically outlined places.

Kerslake kept her response short.

“I don’t want to opine on other cities,” she said. “But what I can say is they haven’t been challenged.”

Contrary to what seemed on the outside like a quick decision on the matter, Kerslake said the proposal to change city law came about after extensive staff work.

“There was a full year of work to try to address this issue,” she said, during which time the city put a moratorium on any new casino development. The city’s efforts included being part of a work group with other cities and a tribe to craft some sort of policy that could be brought to the state, giving more freedom to cities to dictate where casinos would go. But the group wasn’t able to reach common ground. Kerslake also said there was a previous effort by cities to back a legislative bill giving more control to cities, but that never made it to law.

So on Feb. 22, what Kerslake brought to the Council was a pretty clear choice: they could change the law to allow casinos, or they could change the law to prohibit them. But they had to change the law.

The vote came down on the side of prohibiting them.

“To me, the basic issue was that as a city, our jurisdiction would not be able to call our own destiny on this,” said Councilwoman Hernandez, who voted in favor of theban. To allow the three casinos to continue operating, “we would be forced to allow casinos to expand other places where food or beverages are sold. I just think that would be so unfair to allow that to happen.”

Council President Ekberg, who voted against the ban, didn’t like the position in which the Council was placed.

“It was a non-winning proposition all the way out,” he said. “Some Council members perceived a decision had to be made that evening. I would have like more information about the fiscal impact to the city.”

Ekberg expressed anxiety about acting without regard to a plan, when it came to making a decision on an industry putting that much money into city coffers.

“I try to be fiscally conservative, and I didn’t see staff at all giving us any direction on what that impact would be,” he said, noting last year the Council had had to squeeze millions from the city budget.

Mayor Jim Haggerton agonized over signing the ordinance into law.

“I took a few days to think about all the ramifications,” he said, noting he could have vetoed it, but the Council could have overridden him with a 5-2 vote.

Closing the budget gap is his greatest concern in this issue.

“We don’t have too many options available to us,” he said. “Employee and service reductions – that’s what I’m faced with.”

Matters could change if the state does revamp its own statutes regarding where casinos can locate – giving more cities local control.

And who’s to say in five years if the regulatory climate will change?

“That’s one of the reasons I voted to pass this ordinance,” Hernandez said. “I wanted time for us to start working on it now.”

In the meantime, though, the Council’s vote does have another consequence.

For the next five years, casinos will be allowed to operate in Tukwila, and not just the three that are already here.

“Now there’s no moratorium,” Palmer, of Great American Casino, said. “By passing this law, they’ve allowed this casino operator into town no questions asked. Now there’s no challenge. Unfortunately the law they passed has done just the opposite (of the desired effect) in my opinion.”

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