01:30 AM PDT on Saturday, May 21, 2005

By kgw.com and AP Staff

CASCADE LOCKS, Ore. -- The U.S. Interior Department has temporarily blocked a proposal to build a tribal casino in Cascade Locks on off reservation property, but left open the possibility that it will approve the deal later.

kgw.com/Friends of Columbia River Gorge

An aerial view of the land that is the proposed site for a Cascade Locks casino.

The initial rejection late Friday by the federal government comes over a month after Oregon Gov. Ted Kulongoski signed an agreement with the Confederated Tribes of Warm Springs, authorizing a 500,000-square-foot casino in the small, scenic Columbia River Gorge town located 40 miles east of Portland.

The Interior Department said granting approval now would be premature because the tribes have not yet purchased the property where the casino would be built.

"Only after the tribes have acquired the Cascade Locks land into trust, will the department consider the terms and conditions of a timely submitted compact," the department said in letters sent to tribal leadership and Gov. Kulongoski.

However, the agency left open the possibility they would approve the casino proposal in the future, saying the tribe may resubmit their casino application once the land transfer occurs.

"The deparment is encouraged by the prospects that there is a foundation for mutual agreement on these issues at some point in the future," the letters said.

Warm Springs tribal spokesman Len Bergstein told KGW that they are already working on taking the land into trust, a process that is expected to take 12 to 18 months to complete.

"It's not a big deal to us at all," he said. "What we've got here is a letter that clarifies the steps we have to take to get our Cascade Locks casino approved."

Meantime, a spokesperson for Kulongoski told KGW as soon as the land transfer process is finished, the state will resubmit the same identical compact to the federal government and expect that it will gain approval.

"It (the letter) did not say anything about the substance of the compact," said Mary Ellen Glynn, referring to the terms of the agreement between Kulongoski and the tribes.

If the deal ultimately goes through, it will be the first tribal casino on nontribal land in Oregon.

AP photo

The small town of Cascade Locks nestled beneath the cloud-shrouded, rugged hills of the Columbia River Gorge.

Residents of the fading Columbia River town of Cascade Locks hope the casino will reverse an outgoing tide of businesses, people, money and services.

And the tribes maintain they need the revenues that a casino only 45 minutes from Portland would give them. Their present casino is located well off the beaten path on their reservation in Central Oregon.

But there has been vocal opposition to the proposal from a newly formed coalition that represents a wide range of interests including environmentalists, fishing groups, opponents of gambling, and a tribe whose casino could lose business if one is built in Cascade Locks.

"This is not the end of the debate. This is just the beginning," said the coalition's spokesman, Dan Lavey.

Environmentalists fear that the 3 million tourists a year the casino could generate will pollute the air and cause traffic problems.

Opponents of the casino have also argued that it would encourage other tribes to seek to build their own casinos on nontribal land.

"This isn't a debate about one casino. It's a debate about whether we want to open the floodgates to off-reservation casinos in urban areas across Oregon," Lavey said.

Members of Oregon's Congressional delegation are at odds too over the casino plan and differ on interpretations of Friday's Interior Department decision.

"While this decision comes as a bit of a last minute surprise, it is important to remember that it only changes the order of the process. It does not reject the terms of the compact," said Congressman Greg Walden, (R) Hood River.

But Democratic Congressman David Wu saw it differently, issuing a statement proclaiming that the Interior Department agreed with him about the potential ills posed by the casino deal.

"From the beginning, the application for this casino has been highly irregular," Wu said. "No off-reservation Indian gaming casino has ever been approved in Oregon history, and none ever should be."

Gov. Kulongoski, also a Democrat, has said he agreed to let the Warm Springs build on the industrial site in Cascade Locks in exchange for the tribe's promise to not build a casino on more environmentally sensitive tribal land in Hood River.

Under the agreement, the tribes would pay 17 percent of their gross gaming revenue from Cascade Locks to the state and up to 6 percent to local projects and governments. They would also close the small casino on their reservation. Some state revenues would be used to protect the Columbia River and its ecosystems but most would go to higher education.