Taking a Gamble on a Controversial California Casino

By Josh Richman

Published October 15, 2004, issue of October 15, 2004.

SAN FRANCISCO — When Hollywood icon Arnold Schwarzenegger wrested the California governor’s office from hapless Democrat Gray Davis in 2003, both men had at least one thing in common: They opposed the opening of Indian casinos in the Golden State’s cities.

But after almost a year in office, Schwarzenegger has tempered that opposition with the desire to get a piece of the action for the recession-blasted state.

Among those who stand to profit most from California’s recent gaming push is Jerome Turk.

A pillar of the Jewish communities in Las Vegas and San Diego, Turk is a key member of the investment and management team that is backing the Lytton Band of Pomo Indians in its bid to open a huge casino across the bay from San Francisco.

Those who know Turk, 61, from his work in the Jewish community describe him as a mensch. But the casino proposal has polarized the Bay Area.

On one side, a collection of lobbyists, businessmen and politicians argue that a casino could boost tourism and generate much-needed tax revenues. Opponents, including nearby residents, good-government watchdog groups and anti-gambling activists, cite studies suggesting an urban casino will end up hurting existing entertainment and restaurant businesses, increase social ills and corrupt the political process by opening the door to a wave of well-financed gambling lobbyists.

Under the deal that the tribe recently struck with Schwarzenegger, the Lytton Band will operate 2,500 slot machines — imagine Caesar’s Palace in Las Vegas, then add 25% more slots — in what would be California’s first urban casino. Some industry observers predict that the venture, to be called Casino San Pablo, could pull down a quarter of a billion dollars every year. The agreement still requires the approval of the state legislature and the U.S. Secretary of the Interior.

Schwarzenegger says he opposes urban Indian gaming but was compelled by federal law to bargain in good faith with the tribe. The Lytton Band will be obligated to fork over a quarter of its profits to California — a tidy sum for a state beset by chronic budget problems. Turk and the three other investment and management partners backing the Lytton Band are likely to split 20%-25% of the annual profits for the first seven years that the casino is in business.

The deal temporarily is in limbo. Schwarzenegger and the Lytton Band’s chairwoman signed a compact August 23, scant days before the legislative session’s end; lawmakers balked at rubber-stamping such an unprecedented deal on short notice, and delayed the vote for several months.

Turk declined to discuss the situation, saying he would not rehash old news.

Turk and his wife, Carole, live in the tony coastal town of Del Mar, about 20 miles north of San Diego. He is the developer and manager of a casino in northern San Diego County, owned by the Pala Band of Mission Indians. For most of his career, Turk has been in and around the gaming industry. But he traveled a long way to get there.

A Queens, N.Y., native with a Brooklyn Law School degree, he briefly worked as a special assistant in the New York City Controller’s office and then spent seven years in the women’s footwear industry before joining the Oppenheimer & Co. Inc. investment-banking firm. His duties at the firm included gaming-industry financing. That led to his 1989 move to Las Vegas, where he helped build and lead a gaming company that later merged with Fitzgeralds Gaming Corp. Also, he and a partner in 1991 developed, managed and held an equity interest in the successful Empress River Casino near downtown Chicago; he and his partner were bought out in 1992.

In Las Vegas, Turk logged time as president of the city’s ADL chapter and also served on the board of the Jewish Federation of Las Vegas. He now serves on the executive committee and board of the San Diego chapter of the ADL. Turk said he remains dedicated to the ADL because of “the continuing increase in antisemitism around the world… I think it’s critical we all get involved with organizations like that.”

Turk is also a board member of the United Jewish Federation of San Diego County and, until recently, served on the executive committee of Seacrest Village Retirement Communities, a nonprofit development of the San Diego Hebrew Homes. “He gives not only of his financial assets, but also his leadership abilities, which are substantial,” said Steven Solomon, president of the federation.

When asked about his federation involvement, Turk said: “We need to give back to the community, both from a Jewish standpoint and a non-Jewish standpoint. Whether you’re Reform or Orthodox or somewhere in between, never forget what you are, because nobody else will.”

Turk retired from Fitzgeralds in 1996, bought his Del Mar house in 1997 and sold all his Fitzgeralds stock in 1999, the same year that he became an investment partner in the casino owned by the Pala Band. Now the Pala Band is among the other three principals ready to invest in and manage the Lytton Band’s proposed casino near San Francisco. The others are the Rumsey Band of Wintun Indians, whose Cache Creek Casino in Brooks, Calif., is currently the closest major Indian casino to the Bay Area; and the Maloof family, whose holdings include the Sacramento Kings NBA franchise and the Palms Resort in Las Vegas.

The debate over the casino proposal has reached a boil since Schwarzenegger and the tribe inked their deal. Opinions in the local Jewish community vary. The Jewish Community Relations Council in San Francisco, the top public-policy arm of the Jewish community, has not taken any position on the casino proposal. And there’s no consensus even among board members at Temple Beth Hillel in Richmond, Calif., which, at 2.5 miles away, is the synagogue closest to the proposed casino.

Creating jobs and providing money to the city and state are good things, said temple president Doug Freifeld. “But speaking personally, I think providing additional opportunities for big-money gambling in the Bay Area is a disservice to families in our community.” He added, “It’s got more downsides than upsides, in my view.”

But David Brown, another past president of Beth Hillel, as well as the Rotary Club of Richmond, said, “This community needs jobs, and I’m willing to take the chance that making gambling more available to people in the community will be less of a social harm when weighed against creating a couple of thousand jobs.”

Turk said all concerns about the casino’s impact on surrounding communities would be addressed through the federal and state environmental reviews the project must undergo.

“They are very extensive, and the environmental process doesn’t just include the usual stuff like traffic, water, fire protection and so on, but also the human element, the social issues,” Turk said. “We’re in the middle of that process now, and without getting the approval of the federal government… we cannot move forward. Over the next six months, a report will be published and we will address every issue that people are raising.”



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