The Smallest City In LA Has Lost Its Volcano, Its Casino, And Most Of Its Money
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Occupying less than one square mile of land just east of the 605 Freeway at Carson Street, Hawaiian Gardens is the smallest city in Los Angeles County.
But it has a big problem.
Nearly 70 percent of its tax revenue comes from one business: The Gardens Casino. And since the coronavirus shutdown, the loss of casino income is costing the city about $1.1 million a month.
"I've been in this business for 20 years and I've been at six other cities, and there's just really nothing like it," said City Manager Ernie Hernandez.
"The bottom line is, nobody depends this much on one source."
The first thing you see as you drive up to the casino is the fake volcano.
"The theme here is Hawaiian. So it has a volcano and has music and smoke and fake lava that lights up," Hernandez said as he led a tour of the exterior.
Under the massive shaded portico out front, there are lanes for valet parking -- a stretch limo is at the curb for the high rollers. This place is open 24/7, and it's normally jumping, with boxing matches, weddings, tournaments.
More than 2,000 cars can park in the lot. But it's quiet and empty now. The double doors don't even have locks on them, so are held closed with chains and padlocks.
Security Manager Dan Sanchez is not used to the quiet.
"We're so used to the hustle and bustle of it," Sanchez said. "And just seeing it closed is kind of just really odd."
Inside are 200,000 square feet of space with 225 gaming tables, the second largest card room in California. No slot machines or video poker like in Las Vegas or tribal casinos, just card players sitting elbow-to-elbow, face-to-face. Or at least, there used to be.
SECURITY BARS AND SWIMMING POOLS
Hawaiian Gardens is home to nearly 15,000 people, so it's one of the more densely-populated cities in the area. Most families speak Spanish at home, and nearly one-quarter of the population is poor.
While police, fire and road repair services are safe for now, with the casino money slashed, many other free services Hawaiian Gardens provides to its residents to improve quality of life and reduce crime could be cut. They are possible only because of the revenue that comes from the casino.
One program encourages homeowners to remove security bars from their windows. The city offers free bar removal, new windows or home security cameras. That's on hold for now, along with other non-essential services.
"We have some recreational and quality-of-life programs that really nobody else has," Hernandez said. "I mean, we have a tattoo removal program. We have most of everything, our service, especially to the seniors, at zero costs. And most cities can't afford to do that."
The city's only public pool, at Lee Ware Recreation Center, is closed during the coronavirus outbreak, but when the health precautions abate, the pool might remain closed if the city cannot pay lifeguards and swim teachers.
Free public events, like a popular car show, Independence Day celebration, Halloween and Christmas tree lighting gatherings will also likely be canceled, Hernandez said.
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BIGGEST PLAYER IN TOWN
The city of Hawaiian Gardens, incorporated in 1964, is named for a Prohibition-era thatched roof fruit stand where, local legend has it, you could get some illegal moonshine in your soda if you knew how to ask for it. The city developed as a bedroom community, nearly all single-family homes. But over the years, as the housing stock aged and large nearby employers such as the Long Beach Naval Shipyard and big factories closed, the population got poorer and crime rose.
For years, the city budget was bolstered by fees from a big bingo hall, but by the mid-1990s the city was in dire financial straits. So voters approved a proposal for the operator of the bingo game to create a card club.
The card club operated out of a big tent back when it started in 1997. But that was replaced in 2016 by a $90 million gambling hall.
The casino is controversial -- partly because the money doesn't all stay local, some goes to a political cause in Israel. The casino also recently admitted to violations of the federal Bank Secrecy Act and agreed to nearly $6 million in settlements.
But as the casino grew, so did its share of the tax base. The city's fortunes rise and fall on the casino's daily take. And now it's too big to fail.
For now, city manager Hernandez has no easy answer to the casino's continued closure.
Los Angeles County has other shuttered card clubs in small cities, including Commerce, Bell Gardens, Gardena and Inglewood. Hernandez said, together, the card club cities have laid off about 7,000 workers, adding to the region's sudden unemployment problem.
The city and casino are pushing state and local health authorities to permit the cardroom to operate in Phase 2, which is when lower-risk businesses can open with physical distancing precautions. But the California Gambling Control Commission places cardrooms such as the Gardens in Phase 3, when higher-risk businesses may reopen with distancing measures.
"We've taken note of the reopening plans put forth by other states and the gambling industry," said Commission spokesman Fred Castaño. "We can't go into specifics because it's not finalized, but we are studying the plans closely and will work to incorporate the best practices that arise from these plans."
That slower re-opening plan puts The Gardens and Hawaiian Gardens officials at a competitive disadvantage to California's tribal casinos, which began reopening this week.
Tribal casinos have more flexibility under their sovereign nation status to set their own rules. They have installed physical distancing measures, such as separating players and gambling machines with plexiglas dividers.
Card rooms like The Gardens are likely to also adopt similar safety measures, said Sanchez, the casino security chief. But, stuck in Phase 3, they have no projected date to reopen.
"And so not only does that present an immediate danger to our revenues, but from a consumer standpoint, it puts us at a great disadvantage if [tribal casinos are] gonna open up already and we're not making these decisions," Hernandez said.
The immediate worry for Hawaiian Gardens is the loss of revenue while the casino is closed. But a longer-term worry is whether its customers will be fickle and move their gambling habits to tribal casinos that are opening up -- and whether they will ever return.