In the poorest neighborhood in the Bay Area's poorest city, the mood is brighter than a casino at midnight.

"We're happy here. I've been here 40 years, and the people have not changed. Our spirits are great," said Cheryl Odom, owner of Cafe Kennedi, a soul food and Cajun restaurant in San Pablo's Old Town. "We know how to take care of each other."

As the recession steamrolls through cities everywhere, none have been quite so flattened as San Pablo. And none have been quite as hopeful, either.
Home prices, incomes, education levels, school test scores and voter-turnout rates are among the lowest in the Bay Area.

Unemployment is almost twice the state average. It's not unusual for three families to share a two-bedroom apartment. And the city's economic lifeblood is a casino.

But major retail developments are under way, schools are being renovated and, at Cafe Kennedi, anyway, the crowd is decidedly upbeat.
In fact, you'd think residents were describing Piedmont, not a town where the average per capita yearly income is $14,000.

"It's quiet here, family oriented. Everyone knows everyone," said Odom, who grew up four blocks from her restaurant. "The people here - we're just happy."
Little change

San Pablo has changed little over the decades. For 150 years, it's been a bastion for immigrants, a mecca for gambling and a small town teeming with kids.
"It's always been the kind of place where people work hard and do the best they can, no matter how poor they are," said Councilman Leonard McNeil, who grew up in San Pablo. "I didn't grow up on filet mignon, but I wasn't hungry, either. I ate rice and beans, and I still like rice and beans. That's San Pablo."
San Pablo began as a stopover along the stage coach route - present-day San Pablo Avenue and Interstate 80 - from Oakland to Sacramento in the Gold Rush era. Over the years, farms and ranches sprouted nearby, attracting immigrant laborers from China, Portugal, Germany, Chile and elsewhere.

Neighboring Richmond banned gambling halls and other dens of iniquity, so San Pablo became a regional hub for partying and nightlife. Race tracks, bars, nightclubs, pool halls and other venues filled the town, which remained unincorporated and somewhat lawless until after World War II.
Richmond, meanwhile, crept up around San Pablo and now surrounds the 3-square-mile town on all sides. Like Richmond, San Pablo quickly filled with workforce housing during and after World War II as thousands flooded the area to work at the shipyards.

Also like Richmond, San Pablo now struggles with a high crime rate, poverty and low-performing schools. Violent crime in both cities is nearly three times the county average.

But San Pablo lacks industry, such as the Chevron refinery and factories that Richmond has. And it lacks a downtown or historic center. Most of San Pablo is residential, a conglomeration of small postwar homes and apartment buildings, built quickly and with few adornments.
But it also boasts a community college and a hospital. And, most important, it has a casino.

The casino

Casino San Pablo, run by the Lytton Band of Pomo Indians, is the largest casino in the Bay Area, with 1,100 slot machines, card tables and restaurants, all open 24 hours a day. About 7 percent of the casino's profits go to city coffers every year, making up about 60 percent of the city's general fund budget.
"Without the casino, we would be bankrupt," McNeil said. "I'd like San Pablo to be known for something besides gambling, but the tribe has been a good neighbor."

The tribe is now looking at other investments in San Pablo, including a housing and retail complex at the site of a former mobile home park, McNeil said.
Most in San Pablo are grateful for the jobs and money it brings to the city, regardless of their personal views on gambling.
"For people who live here, it's great to have a job you can walk to," said Kathy Chao Rothberg, a San Pablo resident and director of the Lao Family Community Development Corp., which helps low-income, mostly immigrant families in San Pablo and Richmond.

More than 60 percent of her group's 15,000 clients have no car, so public transit and nearby employment is critical, she said.
But despite the challenges, San Pablo is still a welcoming place for immigrants, thanks largely to its plethora of cheap housing and tight-knit community groups, Rothberg said.

"It's a city that has always embraced diversity," she said. "I love this community. Me and my family are definitely committed to staying here."
Facts about San Pablo

 
-- Average yearly per capita income: $14,303, lowest in the Bay Area
-- Median home sale price in October: $151,600, lowest in the Bay Area. Median home price in January 2006: $475,000.
-- Number of liquor stores: 8
-- Number of churches: 22
-- Unemployment rate: 22 percent, highest in the Bay Area
-- Percentage of homes headed by single mothers: 30 percent
-- Percentage of residents who have a high school diploma or less: 60 percent
-- Percentage of residents who were born in another country: 40 percent
-- Voter turnout in the Nov. 2 election: 23 percent
-- Percentage of residents who are undocumented: 17 percent
-- Percentage of profits from Casino San Pablo that go to the city: 7 percent
-- Percentage of the city's general fund that comes from the casino: 60 percent, or $12 million to $14 million a year.

Sources: Data Quick, Trulia, 2000 and 2005 U.S. census data, city and state documents