Residents of the rural Capay Valley can't help feeling a little beleaguered these days.

Many are upset by a state Transportation Department plan to straighten and widen Highway 16 to better handle casino traffic. They recently filed a legal challenge to the project.

More unsettling news arrived last week.

The tribe that owns Cache Creek Casino Resort announced it was making a new push to expand its operations in the valley in western Yolo County, where the casino dominates a landscape of organic farms, vineyards and tiny hamlets.

In October, organic farmers and others felt relieved when they learned the ailing economy had prompted the Yocha Dehe Wintun Nation to abandon its plans to triple the size of its casino complex with a 10-story hotel tower, a 62,000-square-foot event center and more dining, shopping and gambling space.

Tuesday's announcement that the tribe now wants to build a 52,000-square-foot event center and add 20,000 feet of gambling space, along with a 900-vehicle parking structure and a warehouse, came as a surprise.

"I was absolutely astounded," said Tom Frederick, who lives next door to the casino and owns Capay Valley Vineyards. He said he and his neighbors were still puzzling over why the tribe would drop its prior plans, after years of effort, and then start over with a scaled-back version.

Tribal spokesman Brent Andrew said the tribe weighed its options and decided to focus on its core operations of gambling and entertainment and not enter into the hotel business in a bigger way.

The tribe operates a 200-room hotel.

"There has been some stabilizing of the economy, and some of the uncertainty has passed," Andrew said. "It made sense to concentrate on the things we're good at and that patrons want."

A notice of preparation has been filed with the state, which kicks off an environmental impact review, he said.

The tribe wants to start construction in 2011 with completion in 2013, he said.

In the prior expansion project, tribal leaders and county officials were unable to agree on the amount of mitigation money the tribe would pay to offset the expansion's effects on county services.

The matter was set for arbitration before the tribe dropped its plans.

The tribe pays the county more than $5 million a year based on its current operations.

Yolo County Supervisor Mike McGowan, of West Sacramento, said he believed the tribe and county could negotiate productively this time. He said county officials still haven't seen the proposal.

"I remain optimistic and positive," he said, "but we won't know what we have to deal with until we've seen it."

Meanwhile, Capay Valley residents are trying to stop Caltrans from pursuing its Yolo 16 Safety Improvement Project.

It would widen lanes and shoulders, level some hills and straighten some turns in the 12 miles between Interstate 505 near the town of Madison and the hamlet of Brooks, where the casino is located.

Caltrans completed its final environmental review of the project in December.

On Jan. 6, the Yolo County Farm Bureau and a citizens group called the Capay Valley Coalition filed a petition in Sacramento Superior Court seeking to halt the project.

The groups claimed the Caltrans environmental impact report failed to satisfy the requirements of the California Environmental Quality Act.

Opponents insist the highway changes will harm the aesthetics of the pastoral valley, endanger slow-moving farm equipment and lead to more accidents as speeds increase.

The current winding, hilly road slows people down, Frederick said.

Mark Dinger, a Caltrans spokesman, said the agency's lawyers are still reviewing the petition. Caltrans is moving forward with hopes of starting construction on the $55 million project in 2013.