Feds Raid Bell Gardens Bicycle Casino

April 4, 2017 by · Leave a Comment 

Bell Gardens relies heavily on revenue from the Bicycle Hotel and Casino, but today’s raid by federal agents could lead to a substantial economic hit to the Southeast city if the Casino is closed for a prolonged period, or shut down permanently.

Dozens of law enforcement officials with the Los Angeles High Intensity Financial Crime Area Task Force — which includes the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE), IRS Criminal Investigation, the California Department of Justice, Bureau of Gambling Control and the United States Attorney’s office — executed a search warrant at the Casino around 7 a.m. Tuesday.

Federal task force raids Bicycle Hotel and Casino in Bell Gardens Tuesday morning. (EGP Photo by Nancy Martinez

Federal agents raid Bicycle Hotel and Casino in Bell Gardens Tuesday morning. (EGP Photo by Nancy Martinez)

Bell Gardens police, who have in the past taken part in other joint federal task forces, were not involved in today’s action, the department told EGP.

It is not yet clear what the task force was looking for because “The search warrant issued by a United States magistrate judge was filed under seal in relation to an ongoing investigation,” according to Virginia Kice of U.S. Immigration and Customs Enforcement. “Because the warrant is under seal, we are not able to comment on the scope or nature of the investigation.”

She said it’s “an ongoing investigation.”

Because the task force is known to target money laundering, there is speculation today’s raid could be related to organized crime.

A call by City News Service to the poker club’s legal department was not immediately returned.

(EGP photo by Nancy Martinez)

(EGP photo by Nancy Martinez)

With the exception of a few hotel and casino managers, most employees were allowed to leave the premises.

A woman resembling Julie Coyne, executive director of the Bicycle Casino Community Foundation, was caught by a helicopter news camera being escorted by federal agents into the Casino early in the morning.

The task force is expected to seize financial documents from the Casino. No arrests have been made so far.

The Bicycle Casino – known to many poker players as The Bike – is expected to be closed to the public for the rest of the day, but hotel guests who could show a room key card were being allowed to return to the Casino.

News of the raid spread quickly through the small city, drawing people to stand outside the facility to get a closer look.

It also led to a lot of conversation amongst neighbors, with some speculating as to the reasons behind the early morning raid.

Jorge Gonzales, a longtime city resident whose mother at one time worked for the Casino, told EGP he believes federal investigators are looking into criminal activity he says has been going on for years.

“I’m not surprised, it’s actually about time they look into what’s going on here,” he said.

“This place was put up with gangster money,” he said, referring to the Casino’s history.

Founded in the mid-1980s, the Bicycle Club was seized in 1990 by the federal government after investigators said the club was partly built with laundered drug money.

 

(EGP photo by Nancy Martinez)

A number of casino employees — who did not want to be identified for fear of putting their already uncertain jobs at risk —told EGP they had not been told if they should show up for their next work shift.

“Most people who work here are honest, humble, good people,” said one employee. “The people gambling are not from Bell Gardens,” he added, implying the raid may be targeting activity by foreigners.

Many Bicycle Hotel and Casino employees live in Bell Gardens. Several said Tuesday they are worried about their jobs.

“I can’t imagine what will happen if they close this place down,” said one worried employee, who hopes he will still receive his paycheck this week.

“It’s not beneficial for the casino or the city” for it to be closed down, interjected a woman in Spanish.

The Bicycle Casino Hotel opened with great anticipation in December 2015. Gov. Jerry Brown was at both the groundbreaking and grand opening of the $50 million, seven-story, 100-room hotel.

In years past, nearly half of Bell Gardens’ General Fund revenue has come from the Casino. It is expected to generate $13 million in funds for the city during the 2016-17 fiscal year that ends in June, an amount projected to be slightly higher in 2017-2018.

(EGP photo by Nancy Martinez)

(EGP photo by Nancy Martinez)

A long time closure or the revoking of the Casino’s license could have a negative impact on city finances. In 2012, when Casino revenue dwindled to an all-time low, Bell Gardens found itself with a budget deficit that took a toll on some city services.

Call to Bell Gardens officials for comment were not immediately returned.

The possibility of such drastic action – long time closure or revoking the Casino’s license – seem unlikely based on similar raids of other Casinos.

Federal authorities last year investigated the Gardena card club formerly known as the Normandie Casino for violating anti-money laundering laws.

The partnership that ran the Normandie was ordered to pay about $2.4 million to settle federal charges that the poker club failed to report large cash transactions to federal authorities, as required.

As part of an agreement with the government, the four partners agreed to pay a $1 million fine and to forfeit nearly $1.4 million for failing to maintain an effective anti-money laundering program and conspiring to avoid reporting to the government the large cash transactions of some of the casino’s “high-roller” gamblers.

Under the Bank Secrecy Act, casinos are required to implement and maintain programs designed to prevent criminals from using the clubs to launder the large sums of cash that illegal activity can generate.

For example, casinos must record and report to the government the details of transactions involving more than $10,000 by any one gambler in a 24-hour period.

City Manager Phil Wagner does not believe the current Bicycle Hotel and Casino owners and management are the targets of this investigation citing reports that the probe is focused on individual gamblers that may or may not have used the casino to launder illegally obtained cash.

“Unfortunately for the many law-abiding customers of the Casino, its employees and the community which has suffered a great deal of negative publicity,” Wagner told EGP.

Wagner went on to criticize media reports that used today’s events as an opportunity to  bring to light “unrelated issues that happened 27 years ago when the casino was under completely different ownership and management.”

“That’s totally unfair to the Casino and to this community,” Wagner told EGP.

Even if not closed, heavy fines would hurt Casino revenue, losses that could in turn hurt the city’s budget.

The Bicycle Casino has always been the crown jewel in the working class city, longtime Bell Gardens resident Nury Balmaceda told EGP.

It “helped build all this,” she said, pointing to the surrounding development that now includes high producing retailers like Ross and Marshals and the newly opened Dunkin’ Donuts and Chipotle.

“It helped bring all these businesses here.”

Other residents were concerned by the presence of ICE agents in the Southeast city, home to a large immigration population.

“A lot of undocumented people may be afraid to come out,” noted Balmaceda, who hopes nothing bad comes out of the raid.

In addition to city revenue, The Bicycle Casino Community Foundation provides scholarships for local students, recognizes local businesses and hosts an annual Christmas celebration for low-income residents.

“This is hit for the people of Bell Gardens, in the end we are the ones who will pay for it.”

Information from City News Service was used in this report.

[Update 7:15p.m.] to include statement from Bell Gardens City Manager.

Las Finanzas de Bell Gardens Continúan Mejorando

June 23, 2016 by · Leave a Comment 

La apertura del muy esperado hotel en el Bicycle Casino se convirtió en un premio mayor de $1 millón de dólares para la ciudad de Bell Gardens, que apostó por el éxito del proyecto para aumentar los ingresos de la ciudad.

Fue hace solo un par de años que la ciudad enfrentaba un déficit de $1 millón producto de la recesión económica y el cierre del estado de su agencia de desarrollo urbano (RDA), que había contribuido con millones de dólares para rehabilitar las zonas deterioradas de la ciudad.

Read this article in English: Bell Gardens Finances Continue to Improve

La suerte de Bell Gardens ha cambiado y la ciudad anticipa un superávit de $1 millón en su presupuesto del año fiscal 2016-2017 de $29,7 millones de dólares. $200.000 del superávit serán destinados a las reservas de la ciudad—un fondo de reserva para emergencias o gastos inesperados.

El alcalde interino Pedro Aceituno acredita el superávit al personal que es frugal y se mantienen en línea durante tiempos difíciles.

“Nosotros no gastamos de más”, dijo Aceituno.

Las ganancias del Bicycle Casino siguen desempeñando un papel importante en la salud financiera de la comunidad de clase trabajadora predominantemente latina, con casi la mitad de los ingresos del fondo general de la ciudad procedentes de las tasas del Casino.

En 2012, los ingresos del casino se redujo a un mínimo histórico de $9.3 millones de dólares, provocando un déficit presupuestario ese año. Ahora en el rebote, se espera que los ingresos del casino lleguen a $13 de millones de dólares este año, $1.8 millones más que en 2015-2016 y $170.000 más de su ingreso más alto en 2008.

El Bycicle Casino es uno de los mayores proveedores de ingresos para la ciudad. (EGP foto por Nancy Martínez)

El Bycicle Casino es uno de los mayores proveedores de ingresos para la ciudad. (EGP foto por Nancy Martínez)

“Durante años estuvimos perdiendo jugadores en otros casinos con hoteles, [pero] ahora podemos mantenerlos aquí”, dijo a EGP el administrador de la ciudad Phil Wagner en referencia a la apertura del nuevo hotel del casino.

Sin embargo, “No es sólo la economía que esta mejorando o las mejoras del hotel, pero mucho tuvo que ver que supimos manejar nuestro dinero muy bien”, dijo.

Los ingresos agregados compensarán $234.000 en ingresos de arrendamiento perdidos cuando la ciudad se vio obligada a vender dos centros comerciales de propiedad municipal, como parte de un acuerdo con el Estado sobre el cierre de su agencia de desarrollo urbano. Wagner cree que la ciudad está en el “noveno turno” de prueba de la RDA, “se termina cuando el estado dice que se termina”, agregó.

“La clave es que la pérdida de las negociaciones del RDA pudieron haber sido mucho más grandes”.

El personal trabajó duro para minimizar el daño, que podría haber alcanzado hasta $4 millones de dólares, dijo el Director de Finanzas Will Kaholokula.

La alcaldesa Jennifer Rodríguez también le da crédito al personal de la ciudad y a los funcionarios elegidos por la “próspera” economía de Bell Gardens. “Somos una de las ciudades que tenía un plan para llevarnos a través de tiempos difíciles”, le dijo a EGP.

A diferencia de algunas ciudades vecinas, “hemos trabajado juntos de manera eficiente sin tener que preocuparnos acerca de la política”, señaló.

Eso es un gran paso adelante de los últimos años cuando las reuniones del Consejo de Bell Gardens eran a menudo escenario de disputas políticas en voz alta. Rodríguez y Aceituno, ambos concejales de toda la vida, creen que la falta de agitación política es la razón por la cual los minoristas de alimentos como Dunkin Donuts y Chipotle están ahora acudiendo a la ciudad, a pesar de su demografía predominantemente latina, de clase trabajadora y de ser sólo 2,4 millas cuadradas en tamaño.

Como resultado, los ingresos por impuestos sobre las ventas está aumentando y el desempleo esta bajando.

Al igual que la vecina ciudad de Montebello, el ayuntamiento de Bell Gardens continuará lidiando con la pérdida de dinero del sistema de agua envejecido.

Después de años de posponer una decisión, ahora se esta trabajando para la realización de talleres y audiencias públicas sobre el futuro de la empresa de agua. Los expertos dicen que la infraestructura de 50 años necesita reparaciones costosas a largo plazo, pero la utilidad no genera suficientes ingresos para cubrir ni siquiera los gastos de operación actuales. Comprado en 1991, el sistema de agua de Bell Gardens sirve alrededor del 30% de los residentes de la ciudad. Las tarifas no se han incrementado por más de 20 años.

La ciudad puede seguir con las tarifas bajas pero se requerirá de planificación a largo plazo, según Wagner. “El ayuntamiento tendrá que decidir si quieren mantener el sistema, venderlo o aumentar las tasas de agua”, explicó.

Otra nota brillante en finanzas de la ciudad ha sido la reducción significativa de las pérdidas relacionadas con los campos de golf, de un déficit de $90,000 por año a $18,000 después de dar la instalación a una empresa de gestión externa.

El aumento del costo del Retiro de Empleados Públicos de California (PERS) continuará desafiando a la ciudad, pero Wagener dice que no hay mucho que la ciudad puede hacer excepto ahorrar. El personal municipal ha propuesto iniciar un fondo de fideicomiso irrevocable para cubrir las obligaciones de pensiones futuras como parte de una solución a largo plazo.

Como la mayoría de las comunidades del sureste, Wagner dice que Bell Gardens debe abordar infraestructura y proyectos generales de mejora de capital, incluyendo calles, callejones y parques.

El pasto sintético en la cancha de futbol del parque Ford necesita ser reemplazado a un costo de $1 millón, señala el Administrador Auxiliar John Oropeza.

“Ahora que tenemos un pequeño superávit podemos asegurarnos de que regresará a nuestros residentes”, dijo Aceituno a quien le gustaría ver algunos programas previamente removidos para que regresen.

Pero Rodríguez cree que un excedente no se traduce a una fiesta.

“No podemos empezar a derrochar sólo porque hay un excedente”, le dijo a EGP. “Incluso antes de tocar el dinero, tenemos que agotar todas las demás opciones y continuar planificando para el futuro”.

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Twitter @nancyreporting

nmartinez@egpnews.com

Bell Gardens Finances Continue to Improve

June 23, 2016 by · Leave a Comment 

The opening of the highly anticipated hotel at The Bicycle Casino turned into a $1 million jackpot for the city of Bell Gardens, which wagered on the success of the project to increase city revenue.

It was only a couple years ago that the city faced a $1 million budget deficit resulting from the economic recession and state closure of its redevelopment agency (RDA), which had contributed millions of dollars to rehabilitate the city’s blighted areas.

Bell Gardens’ luck has since turned around and the city is anticipating a $1 million dollar surplus in its 2016-2017 Fiscal Year Budget of $29.7 million. $200,000 of the surplus will go to the city’s reserves – a fund set aside for emergencies or unexpected expenses.

Mayor Pro Tem Pedro Aceituno credits the surplus to staff being frugal and holding the line during troubled times.

“We didn’t overspend,” Aceituno said.

Bicycle Casino profits continue to play a major role in the predominately Latino blue-collar community’s financial health, with nearly half of the city’s general fund revenue coming from Casino fees.

The Bicycle Casino is expected to generate $13 million in revenue this year. (EGP photo by Nancy Martinez)

The Bicycle Casino is expected to generate $13 million in revenue this year. (EGP photo by Nancy Martinez)

In 2012, Casino revenue dwindled to an all-time low of $9.3 million, sparking a budget deficit that year. Now on the rebound, Casino revenue is expected to reach $13 million this year, $1.8 million more than in 2015-2016 and $170,000 more than its peak in 2008.

“For years, we were losing players to other casinos with hotels, [but] now we are able to keep them here,” City Manager Phil Wagner told EGP, referring to the opening of the Casino’s new hotel.

However, “It’s not just the economy doing better or hotel improvements, but a lot of it was that we managed our money very well,” he said.

The added revenue will offset $234,000 in lease revenue lost when the city was forced to sell of two city-owned shopping centers, as part of a settlement with the state over the closing of its redevelopment agency. Wagner believes the city is in the “9th inning” of the RDA ordeal, “it’s over when the state says it’s over,” he added.

“The key thing is the loss from the RDA negotiations could have been much bigger.”
Staff worked hard to minimize the damage, which could have reached up to $4 million, said Director of Finance Will Kaholokula.

Mayor Jennifer Rodriguez also credits city staff and elected officials for Bell Gardens’ “thriving” economy. “We’re one of the cities that had a plan to get us through rough times,” she told EGP.

Unlike some neighboring cities, “we have worked efficiently together without worrying about the politics,” she pointed out.

That’s a major step forward from years past when Bell Gardens City Council meetings were often the scene of loud political bickering. Rodriguez and Aceituno, both longtime councilmembers, believe the lack of political turmoil is why food retailers like Dunkin Donuts and Chipotle are now flocking to the city, despite its predominately Latino, working-class demographics and being only 2.4-square-miles in size, factors that have been deterrents to investments in other cities.

As a result, sales tax revenue is up and unemployment is down.

Like neighboring Montebello, the Bell Gardens City Council will continue to grapple with its aging and money losing water system.

After years of putting off a decision, plans are in the works to hold workshops and public hearings on the water utility’s future. Experts say the 50 year old infrastructure needs costly long term repairs, but the utility does not generate enough revenue to even cover current operating expenses. Purchased in 1991, the Bell Gardens water system services about 30% of city residents. Rates have not been raised in over 20 years.

Dunkin Donuts and Chipotle are two of the newest retailers opening its doors in Bell Gardens. (EGP photo by Nancy Martinez)

Dunkin Donuts and Chipotle are two of the newest retailers opening its doors in Bell Gardens. (EGP photo by Nancy Martinez)

The city can continue to offer the low rates but it will require long term planning, according to Wagner. “The city council will have to decide whether they want to maintain the system, sell the system or increase water rates,” he explained.

Another bright note in city finances has been the significant reduction in golf course related losses, from a deficit of $90,000 per year to $18,000 after turning the facility over to an outside management company.

“We do a lot that doesn’t make money but we want to be able to make enough to cover the costs,” said Wagner.

The rising cost of California Public Employees’ Retirement (PERS) obligations will continue to challenge the city, but Wagener says there’s not much the city can do except save up. City staff has proposed starting an irrevocable trust fund to cover future pension obligations as part of a long-term solution.

Like most southeast communities, Wagner says Bell Gardens must address infrastructure and general capital improvement projects including streets, alleys and parks.

Turf on the soccer field at Ford Park needs be replaced at a cost of $1 million, notes Assistant Manager John Oropeza.

“Now that we have a little surplus we can make sure that comes back to our residents,” said Aceituno who would like to see some previously cut programs return.

But Rodriguez believes a surplus does not translate to a party.

“We can’t start splurging just because there’s a surplus,” she told EGP. “Before we even touch the money we have to exhaust all other options and continue to plan ahead.”

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