The Breakdown

Explaining Southern California's economy

Hawaiian Gardens breaks ground on redevelopment of casino

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Governor Jerry Brown was in Southern California Monday at the groundbreaking ceremony for the redevelopment of the Hawaiian Gardens Casino, the economic mainstay of the city by the same name.

Hawaiian Gardens is more a middle class poker club than a high-end casino, but with a staff of more than a thousand workers, it is the largest employer in the small city southeast of Los Angeles.

Five months ago, the Hawaiian Gardens City  Council approved a $45 million project to build a new and bigger Hawaiian Gardens casino and replace the large tent structure that sits just off the 605 Freeway.

In attending the groundbreaking ceremony, Governor Brown joked that the poker club business was in his blood.

"My grandfather had two poker clubs in the city of San Francisco which I don’t think they were quite legal at the time," the Governor said to laughs, "This was the 1930s."

Governor Brown has received substantial political contributions from the gaming industry, including over $75,000 from the Hawaiian Gardens Casino itself between 2005 and 2013, according to the National Institute on Money in State Politics.

Hawaiian Gardens Mayor Victor Farfan says the city is contributing $9 million to the redevelopment effort — about one fifth of the city's budget - and it’s worth it, he said, because revenues from the casino represent 70 percent of the city’s general fund.

"The city is 9/10 of a square mile.  In terms of commercial redevelopment, there’s really zero to none – no industrial," Farfan said.  "So this is really the crown jewel of our community, our partnership is really vital," he said.

The city collects a licensing fee linked to the casino's gross revenues.  Irvine-based economist Alan Meister of  Nathan Associates says these arrangements can benefit cities, especially if a bigger, nicer facility will bring in more visitors.  But he says there can be a danger in betting too big on a casino.

"If something were to happen to the facility itself, or something were to happen to the gaming industry, and it were to decline, then that could have significant negative impact on the city," Meister said. 

Hawaiian Gardens City and Casino officials expect construction of the new casino to create 200-300 jobs.  Once open, officials estimate the new facility will need an additional 300 to 500 employees.  

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