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Car dealership: Gaming proposal

Dwight Nelson brought a proposal to Selma City Council to convert banquet facilities at his Spike N’ Rail restaurant into a gaming card room. Use of the facilities is down and he’d rather make use of the space to bring jobs, recreation and potentially thousands to the City’s general fund. “I’ve looked at this for a long time and it’s a good thing for Selma,” he said.

SELMA – Long-time car dealership owner Dwight Nelson has an idea he thinks will not only add an estimated 100 new jobs to Selma, but could also bring in thousands of dollars in taxes for the city’s general fund.

At the June 17 Selma City Council meeting, Nelson shared his idea to convert 4,000 square feet of banquet facilities of his Spike N’ Rail Restaurant into gaming rooms, as usage of them has declined over the years, he said.

“Twenty-five years ago, having banquets inside was the thing to do. Over the years, that’s changed now where a lot of banquets and weddings are held outside in destination locations. [The banquet rooms] do provide a service [but] the banquet facilities have not been very busy for us.”

Nelson said he’d like to maximize the use of the buildings, put more people to work and generate more revenue for the city’s coffers by operating a Legends Card Room.

During his presentation, Nelson said since he’s grown up in Selma, he’d prefer to continue investing in his hometown rather than relocate elsewhere. Since graduating from Selma High, Nelson’s owned a construction company that’s built projects - from schools to hospitals to prisons - all over the state.

“Over the years, I’ve earned money and in the construction business I was able to make decisions with what to do with my money. It’s all come back into Selma. It’s done that through the construction of office buildings, apartments, houses, restaurant, the hotel and the auto mall that everybody knows about.”

Thirty years ago, Nelson invested in the town’s Chevrolet dealership. He brought in Honda and Mazda, and then over the years added 15 to 16 different car lines.

He then got permission to build the Spike N’ Rail and hotel that went on to earn the highest ranking for Holiday Inn properties in the world for customer satisfaction.

“We won the award four different times,” he said of that portion of his businesses. “The restaurant was 14,500 square feet. It was the largest single-facility restaurant built in the state of California that year.”

More rooms were added to the hotel that now has 115 rooms that “do pretty well and stay busy,” he said. The restaurant was meant to provide facilities for the hotel and banquet facilities.

“Over the past 25 years, I don’t know what the total dollar amount is, but it’s in the tens of millions that the City has received in sales tax revenue dollars,” he said of the car sales at his dealerships. “The reason I’m explaining everything is I believe what I do is helping me, but it’s also helping my community. [The card room] would put more people to work and that would be a good thing.”

Nelson touted the economic benefits cities such as Fresno, Clovis and Lemoore are reaping by having gaming facilities nearby.

“What they create is a source of income for those cities that have them. You’ve read what Chukchansi does and the park with the baseball facility, Table Mountain and what they do for their community. They’re tremendous donors to their communities.”

City attorney Bianca Sparks Rojas said since the proposal would likely involve zoning amendments, she advised the Council members against stating whether they were for or against the idea at this time. The issue was not up for a vote during the Council meeting as it was an informational presentation only.

“What we can comment on is statewide legislation that may need to be sought, what affect the project could have on the city, but with specifics and voicing either support or opposition, I’d ask the council to refrain from making comments like that this evening,” the city attorney said.

The City of Selma currently has a law that would allow a card room to operate, however an ordinance would need to be approved by a public vote to allow the business to open up.

“It’s a system you have to go through, through the [state] legislature, through the city’s majority of voters to get approval to put a card room in the city,” Nelson said. He’s even willing to spend his own funds to put the proposal on a ballot, he said.

“I think we could create a revenue-generating facility there that would hire 80 to 100 new people and provide a service to the community - recreation - and provide money to the city for whatever you folks want to do with it,” Nelson said. He said he’s hoping the extra funds could be used to hire more police officers “but whatever you want to do with it.”

Nelson had attorney and Sacramento lobbyist Jarhett Blonien present financial data as he’s been involved in bringing the 500 Club to Clovis. Blonien works exclusively with card room facilities around the state. He shared the following at the Council meeting:

  • Nelson’s proposal of using 4,000 square feet would accommodate 15 gaming tables.
  • Clovis’ gaming facility has 18 tables that generate approximately $1.5 million.
  • The average fees paid to state, county and local governments for smaller cardrooms is $27,846 per table.
  • California cardrooms pay almost three times as much in local and state taxes and fees as a percentage of revenues as tribal casinos.
  • In 2014, cardrooms generated $932 million in gaming revenue and paid $124.25 million in taxes and fees.
  • In 1999, there were 150 operating cardrooms. Now there are 74 in the state ranging from two to 270 tables.
  • Each gaming table produces 10 direct and 15 total jobs to the state’s economy. Such jobs would include dealers, supervisors, cashiers, food service and bartenders, hosts and hostesses, hotel/hospitality and spa services.
  • In 2014, gaming jobs paid employees an average of $60,000 annually.

“There are a lot of similar communities in the Valley which generate tremendous revenues for their general fund,” Blonien said. He cited Turlock as an example where that city receives about $500,000 from its 14-table club. “Club One in Fresno is the largest single-source of revenue for the City of Fresno.”

There’s been a moratorium preventing more card rooms from opening up since 1996 but that moratorium will end in 2023.

“So for Selma to have an opportunity to do a cardroom [before then] they’d need to pass an ordinance pursuant to the business and professions code 19960(c) which would require the City put before the people an ordinance and ask them whether they think gaming should be legalized in the City,” Blonien said

If voters approve the law, the City could petition the state to allow the cardroom to be licensed.

Depending on if, and how quickly, enough voters approve of the idea, the cardroom could be on the ballot as early as the 2020 election.

Council members asked about the next steps in the process and Attorney Sparks Rojas said voters would need to approve the law to allow the establishment to open, then Council move forward with the zoning and entitlement process specific to the application for the card room.

“This can be done by a citizen-driven initiative. The council doesn’t have to move forward on anything, but it can be a regular ballot initiative whereby an individual moves forward with petitions in the city and has 180 days to collect signatures. Generally, it requires 10 percent of registered voters in order to put this matter on the ballot. That way, the council doesn’t do it, but it’s citizen driven,” she said.

Sparks Rojas said under state law the Council as a whole must stay neutral, but individual Council members are allowed to take personal positions.

“We couldn’t advocate for or against it, but once an initiative does come to the city with the requisite number of signatures of 10 percent, the City has an obligation to either enact it or put it on the ballot.”

Blonien said if Selma voters approve it and the governor approves it, then the City and the California Gambling Control Commission issue licenses.

In order to deal with potential gambling issues, Blonien said cardrooms pays fees per table to the State Office of Problem Gambling. They conduct problem gambling trainings for all the employees and have programs where customers can bar themselves or the casino can bar customers who have problems.

Council also asked about security, alcohol consumption and the hours the cardroom would operate.

Blonien responded that if the cardroom operates 24 hours, seven days a week, security would on site around the clock and typically consists of “at least two or three guards outside and three or four inside full time” for the size proposed for Selma. Many card rooms contract with local police during weekends or busier nights for additional assistance, he said.

“One of the great benefits is the partnership between the local PD and the cardroom security. Because the cardrooms have so many cameras, you’re able to pick up a lot of ancillary activities. That generally helps deter crime in the area.”

Nelson said he’s aware of a previous cardroom on Manning and Highway 99 that existed 20 years ago but said he thinks because it was too large, it couldn’t generate enough business to sustain itself.

“We, on the other hand, have 4,000 square feet that’s similar to the 500 Club. As these card rooms go, you don’t get hundreds of people at a time in there. You might run 50 gamblers at a time with 15 tables and they come and go so parking’s not an issue. I’ve looked at this for a long time and it’s a good thing for Selma.”

Councilman Louis Franco asked whether the banquet facilities would be lost completely as the rooms are used throughout the year for various functions.

Nelson said since the restaurant also has two dining areas, there’s “plenty of room to move things around.”

In other matters, the Council also approved the following appointments to City committees:

  • Johnny Gonzalez and Ramza Coury were retained for the Planning Commission.
  • Approved keeping Hugh Adams and Rosemary Alanis on the Personnel Commission.
  • Appointed Josh Sheperd to a vacancy on the Measure S Oversight and reappointed Char Tucker and
  • Brandon Shoemaker.
  • Reappointed Char Tucker and Susan Wells and to Pioneer Village.
  • Appointed Santiago Oceguera, Diego Haro and Theresa Herrera to Recreation and Community Services Commission.

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The reporter can be reached at 583-2427 or lbrown@selmaenterprise.com.

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