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HomeMy WebLinkAboutReso 2017-057RESOLUTION NO. 2017-057 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA (1) RATIFYING CHIEF OF POLICE AND'STATE OF CALIFORNIA DIVISION OF GAMBLING CONTROL APPROVALS OF THE TRANSFER OF A CONSOLIDATED CLASS II CARDROOM LICENSE FOR THE SEVEN MILE CASINO FROM V.C. CARDROOM, INC. TO STONES SOUTH BAY CORPORATION; (2) WAIVING THE REQUIREMENT FOR TEMPORARY REVERSION OF THE CLASS II LICENSE TO A CLASS I LICENSE FOR THIS TRANSFER WITH FINDINGS AND CONDITIONS; AND (3) RATIFYING CHIEF OF POLICE APPROVAL OF THE NEW OWNERS AND OTHERS POSSESSING A FINANCIAL INTEREST IN THE GAMING OPERATIONS AND/OR CARDROOM LICENSE FOR THE SEVEN MILE CASINO; AND (4) APPROVING RELATED MATTERS WHEREAS, V C Cardroom, Inc. is the owner of the only two (2) cardroom licenses issued by the City of Chula Vista, which have been consolidated into a "Class II" cardroom license (collectively, the "Cardroom License"); and WHEREAS, pursuant to the Cardroom License, the sole gaming operation within the City is known as Seven Mile Casino, which is located at 271 and 285 Bay Boulevard, Chula Vista, California 91910; and WHEREAS, on December 12, 2016, Stones South Bay Corporation ("Stones Corp.") submitted an application ("Application) to the Chula Vista Police Department per section 2.4 of the City of Chula Vista Gaming Plan (the "Gaming Plan") for the transfer of the Cardroom License from V C Cardroom, Inc. to Stones Corp.; and . WHEREAS, on February 15, 2017, Stones Corp. requested that the City Council ratify the Application for the Cardroom License per section 2.5 of the Gaming Plan, and WHEREAS, on March 23, 2017, the State of California Division of Gambling Control conditionally issued a Temporary State Gambling License to Stones Corp. and approved the transfer of the interests in Seven Mile Casino from V C Cardroom, Inc. to Stones Corp.; and 'NTHEREAS, on or about April 11, 2017, the City Council approved an Amendment to the Gaming Plan allowing the City Council to waive the requirement for a temporary reversion of "Class I1" licenses to "Class I" licenses upon transfer of a cardroom license where the Chief of Police determines; and the City Council approves, that the proposed transferee possesses adequate experience and expertise to operate a "Class 11" cardroom in accordance with state gaming laws, the terms and conditions of the City's Gaming Plan, and existing best practices for such operations (the "Gaming Plan Amendment")- and Resolution No. 2017-057 Page No. 2 WHEREAS, the Chula Vista Police Department has thoroughly reviewed the Application and conducted background investigations of the proposed transferees and financial interest holders in the Cardroom License; and WHEREAS, based on these background investigations, and an on-site visit and evaluation of Stones Corp. affiliate operations of a "Class II" cardroom in Citrus Heights, California, the Chief of Police has determined that Stones Corp. possesses adequate experience and expertise to operate a "Class II" cardroom in accordance with state gaming laws, the terms and conditions of the City's Gaming Plan, and existing best practices for such operations and therefore recommends City approval of a waiver under the Gaming Plan Amendment ("Waiver"); and WHEREAS, the Chief of Police has approved the proposed transferees and proposed financial interest holders in the Cardroom License; and WHEREAS, as a condition of the approval of a transfer of the Cardroom License, and the Waiver, the City and Stones Corp. have agreed to amend the Card Room Operating Agreement, consistent with the terms provided therein, to reduce the Vested Operating Term from a period of five (5) years to a period of four (4) years, whereby such Vested Operating Term shall expire on March 3, 2019; and WHEREAS, the City Attorney's office has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because the activity consists of a governmental administrative/fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is required. NOW, THEREFORE, based on the recitals set forth alone, the City Council of the City of Chula Vista hereby resolves as follows: 1. The City Council hereby ratifies Chief of Police and State of California Division of Gambling Control approvals of the transfer of the Cardroom License from V C Cardroom, Inc. to Stones South Bay Corporation. 2. The City Council hereby determines that Stones Corp. possesses adequate experience and expertise to operate a "Class II" cardroom in accordance with state gaming laws, the terms and conditions of the City's Gaming Plan, and existing best practices for such operations and, accordingly waives the requirement for a temporary reversion of the Class Il License to a Class I License for the transfer of the Cardroom License from V C Cardroom, Inc. to Stones South Bay Corporation. Resolution No. 2017-057 Page No. 3 3. The City Council hereby ratifies. the approval by the Chief of Police of the new owners and financial interest holders in the Cardroom License per the attached Exhibit A. 4. As a condition of the approval and waiver provided in Sections 1 and 2; above, the City Manager is hereby authorized and directed to finalize and execute on behalf of the City, an Amendment to the Card Room Operating Agreement with the Cardroom License interest holders, consistent with the terms provided therein, to reduce the Vested Operating Term to a period of four (4) years, whereby such Vested Operating Term shall expire on March 3, 2019. 5. The City Council hereby authorizes and directs the City Manager to take such further actions and execute such further agreements as deemed necessary, in the City Manager's sole discretion, to effectuate the transfer of the Cardroom License from V C Cardroom, Inc. to Stones South Bay Corporation. Presented by Glen R. oogins Ky At rney Approved as to form by Q: Glen R. ooD 0 gins ity Attdrney Resolution No. 2017-057 Page No. 4 PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 1 lth day of April 2017 by the following vote: AYES: Councilmembers: Aguilar, Diaz, McCann, Padilla, and Salas NAYS: Councilmembers: None ABSENT: Councilmembers: None a las, Mayor ATTEST: AL�'l al, Donna R. Norri , CMC, City Clerk STATE OF CALIFORNIA COUNTY OF SAN DIEGO CITY OF CHULA VISTA I, Donna R. Norris, City Clerk of Chula Vista, California, do hereby certify that the foregoing Resolution No. 2017-057 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 11th day of April 2017. Executed this 11th day of April 2017. 4 L' 5e' U. Aa - Donna R. Norris, CM , City Clerk EXHIBIT A Resolution No. 2017-057 Page No. 5 Financial Interest Holders in the Cardroom License for Seven Mile Casino Attachment 3 - Financial Interest(s) Summary Person(s)/Entity(ies) Financial Interest(s) Harvey Souza Trustee - Souza Trust Bette Souza Trustee - Souza Trus Harvey and Bette Souza Living Trust ("Souza Trust") Sole Shareholder - V.C. Cardroom, inc- ncPartner Partner- V.C. Cardroom General Partnership Memb •• Prooerties, LLC V.C. Cardroom Inc. Sole Owner - Seven Mile Casino Licensee - Consolidated cardroom license for Seven Mile Casino issued by City Licensee - California State Gambling (License No. GEGE-000466) Licensee. -Type 47 On -Sale General Eating Place liquor license (License No. 552452) issued by California Gambling Control Commission Partner - V.C. Cardroom General Partnership Lender - To Stones Coro. Stones South Bay Corporation ("Stones Corp") Partner - V.C. Cardroom General Partnership [Proposed).Sole Partner - V.C. Cardroom General Partnership (Proposed) Sole Owner - Seven Mile Casino Lessee - 285 -Bay Blvd from V.C. Bay Properties, LLC Lessee - 2i5 Bay Blvd from Stone 215 Bay Blvd. LLC Borrower - From V.C. Cardroom, Inc Borrower - From Comerica Bank. Rodney Stone Shareholder - Stones Corp. [Proposed) Casino Operator - Operation strategy and global management decisions Member - Stone 215 Bay Blvd. LLC Member - Stone Chula Vista Holdings LLC Manager - La Jolla Investment Company Trustee - Rodney Stone Family Trust Lender -To Souza Trust. Lender - To V.C. Cardroom Inc. Gloria Stone Trustee - Rodney Stone Family Trust Stone Family Trust dated April 8, 1982 ("Rodney Stone Family Trust") Member - La Jolla Investment Company LLC Ryan Stone Shareholder - Stones Corp. [Proposed) Operator - Seven Mile Casino. Day-to-day operations. Member - Stone 22.5 Bay Blvd. LLC Member - Stone Chula Vista Holdings LLC Trustee - Ryan Stone Family Trust Member - Monarch Investments LLC Lender - To V.C. Cardroom Inc. Guarantor - Promissory Note from Stones Corp. to V.C. Cardroom Inc Guarantor - Loan from Comerica Bank to Stones Corp. Ashley Stone Trustee - Ryan Stone Family Trust Member- Monarch Investments LLC )Guarantor - Promissory Note from Stones Coro. to V.C. Cardroom Inc. Guarantor - Loan from Comerica Sank to Scones Coro. 1Ryan and ,"-shley Stone family Trust dated April 24, 2002 ("Ryan Stone Family Trus:") Guaranior - 'romissory lJoic from Stones Cor?. to H.C. Cardro:)m In_. Guarantor - Loan -f,ron Comerica Bank io Stones Coro. ' �Masis Keoorkian I Shareholder - Stones Coro. ([Proposedj Operator -Seven Mile Casino. Day-to-day operations. Member - Stone Chula Vista Holdings LLC Member - Stone 215 Say Blvd. LLC Trustee- Kevorkian Family Trust Guarantor - Promissory Note from Stones to V.C. Cardroom Inc. Resolution No. 2017-057 Page No. 6 Guarantor - Loan from Comerica Bank to Stones Corp. Willa Kevorkian Trustee - Kevorkian Family Trust Guarantor - Promissory Note from Stones Corp. to V.C. Cardroom Inc. Guarantor - Loan from Comerica Bank to Stones Corp. 2005 Kevorkian Family Trust dated lune 10, 2005 ("Kevorkian Family Trust") Guarantor - Promissory Note from Stones Corp. to V.C. Cardroom Inc. Guarantor - Loan from Comerica Bank to Stones Corp. Member - Stone 215 Bay Blvd. LLC Pledgor - Membership interest in Stone 215 Bay Blvd. LLC Kermit schayltz Shareholder - Stones Corp. [Proposed] Operator - Seven Mile Casino. Day-to-day operations. V.C. Cardroom General Partnership [Proposed) Transferor of Seven Mile Casino Interests to Stones Corp. V.C. Bay Properties, LLC Members - Stone Chula Vista Holdings LLC and Souza Trust Fee Owner - Real Property located at 285 Bay Blvd Lessor - 285 Bay Blvd to Stones Corp. for Casino Operations Lender - To. V.C. Cardroom Inc. - Stone Chula Vista Holdings LLC Members - Rodney Stone, Ryan Stone, and Masis Kevorkian Lender - To Souza Trust. Member - V.C. Bay Properties, LLC Pledgor - Membership interest in V.C. Bay Properties, LLC Stone 215 Bay Blvd. LLC Members - La Jolla Investment Company, LLC, Monarch Investments LLC, and Kevorkian Trust [Proposed] Members - Souza Trust, La Jolla Investment Company, LLC, Monarch Investments LLC, and Kevorkian Trust Fee Owner - Real Property located at 215 Bay Blvd Lessor - 215 Bay Blvd to Stones South Bay Corporation for Office/Parking Operations La Jolla Investment Company LLC Sole Member - Rodney Stone Family Trust Pledgor - Membership interest in Stone 215 Bay Blvd. LLC Monarch Investments LLC Sole Members - Ryan Stone and Ashley Stone Pledgor - Membership interest in Stone 215 Bay Blvd. LLC Comerica Bank Lender -To Stones Corp. Joe Olivieri Casino Operator - General Manager Art Van Loon Casino Operator - Employee license