Tower of cards

Testimony in state card room hearing puts pay-to-play city politics—and developer’s personal life—in the spotlight

The inside of the Elks Tower is open to the public again as the new Nine 2 Won bar, but it’s not the venture owner Steven Ayers envisioned.

The inside of the Elks Tower is open to the public again as the new Nine 2 Won bar, but it’s not the venture owner Steven Ayers envisioned.

Photo by Scott Thomas Anderson

The new Nine 2 Won bar highlights the Elk Tower’s timeless mystique, with curtains along old crimson bricks and windows looking down on a subterranean pool from the Jazz Age. But this is not what the ground floor was supposed to be.

Building tycoon and philanthropist Steven Ayers spent $2.6 million renovating the 93-year-old landmark toward realizing his dream of having an ultra-chic card room at the base of the tower. That dream was apparently so important to Ayers that, last fall, he agreed to allow an attorney for the California Gaming Control Commission to essentially put him on trial for a May 2017 domestic dispute that was pleaded down to a simple charge of being drunk in public.

Ayers’ voluntary participation in the hearing was a last-ditch effort to stop authorities from blocking his request for a gaming license. After more than 30 hours of testimony, which included Ayers and his wife putting their private lives on display, California gaming authorities still chose to bar Ayers from operating a lucrative card room.

That development has direct consequences for city officials, who recently lost their own effort in superior court to make Ayers a licensed card room owner. Now, confusion reigns about whether Sacramento will ultimately go from four card rooms to three card rooms for good.

Questions about Sacramento’s gambling future started in 2016, when the long-troubled Casino Royale folded.

Ayers, who owns steel, construction and land development companies, saw an opening for an upscale vintage card room and bar inside the Elks Tower. Elected officials quickly backed the plan and the city’s Finance Department helped embattled Casino Royale co-owner Will Blanas sell his license to Ayers.

Roadblocks formed almost immediately. Clarke Rosa, owner of Capitol Casino, and John Park, owner of Parkwest Casino Lotus, jointly sued the city, claiming it had flaunted its code by not putting the license up for sale through a lottery.

Rosa and Park prevailed. Blanas is appealing the decision. The city is not.

A new round of hearings began last October, this time before the state gambling control commission. The testimony may shed light on why City Hall was so keen to get into business with Ayers.

Ayers was denied his state gaming license after a background check convinced commissioners he didn’t meet their “good character” mandate. At issue were Ayers’ two DUI convictions and an alcohol-fueled confrontation with his wife, Penne, in Davis in May 2017. While the incident wasn’t treated seriously at the time, Ayers’ decision to fight for his license meant that state gambling control attorney William Torngren could argue the case in a way that Yolo County prosecutors never attempted.

Ayers was not accused of hitting his wife, though he has admitted that some kind of struggle ensued after she found him passed out from a combination of prescription painkillers and wine.

Ayers and his wife endured hours of cross-examination from Torngren, with Penne ultimately identifying herself as the instigator, a story arguably different than what she first told police.

But if that part of the hearing went badly for Ayers, plenty of witnesses vouched for his philanthropy. They described the financial support he provided to charities such as Loaves & Fishes and a nonprofit for children overcoming severe abuse. One witness testified that Ayers covered $10,000 in dental work for a teenager who couldn’t afford it. Another remembered how Ayers volunteered his iron workers to design a special truck for a disabled war veteran.

When Ayers took the stand, he told commissioners his complicated relationship with alcohol is part and parcel to his story as a self-made man.

“I started with nothing and had to work two lifetimes,” Ayers testified. “In the construction world and business world, part of working with clients is going out with them. … I’ve been able to secure over a hundred million dollars worth of work that way… and sometimes I drink in excess of what I should.”

The deals Ayers struck in bars and nightclubs helped make him one of the most influential businessmen around the capital, according to the testimony of several bankers and developers. Scott C. Syphax, who once built low-income housing in the River District for Nehemiah, said that Ayers’ support equaled political muscle.

“Steve was a person who was considered to be one of the city fathers of Sacramento,” Syphax testified. “And, so, regardless of who is in power, either in private leadership organizations or in public sector leadership, he’s typically among the handful of people who are called up for their advice and expertise before anything ever surfaces in terms of a community initiative.”

Despite Ayers’ clout, he faced formidable competitors in the card room business. Ayers testified that Rosa promised he’d “kill” Casino Royale’s city license because he “hated” its former co-owner, James Kouretas. Kouretas was facing fraud allegations in civil court before he died.

Rosa declined comment through his attorney Dale Campbell.

Ayers also testified that he was told in a meeting with Blanas, City Attorney Matt Ruyak and Finance Director Brad Wasson that if he didn’t get Casino Royale’s city license, then the license “was dead.”

City spokesman Tim Swanson declined to comment on what Ayers said happened at that meeting. As for what will happen to Casino Royale’s city card room license if Blanas loses his appeal, Swanson wouldn’t speculate.

Campbell said last week that the lack of clarity from City Hall is frustrating.

“It’s our expectation that the city, once the judgment is upheld, will follow its own regulations and conduct a lottery,” Campbell added. “All we’ve wanted from the start is a straight answer on that.”