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Vast land purchase possible for tribe Senecas' strategy could remove large parcels from tax rolls

WASHINGTON -- The Seneca Nation of Indians paid $4 for the Cobblestone District property where it intends to build a Buffalo casino.

Of course, the land is worth more than that: $4.6 million, to be precise.

That's what the tribe's gambling corporation paid for the nine-acre property last year -- before turning around and selling the land to the tribe for $4.

Seneca Nation leaders structured similar two-step deals in Niagara Falls. Public records show the tribe's gambling corporation spent at least $8.07 million on Niagara Falls land since 2003 and later sold the same property to the tribe for $14.

Why?

The tribe won't say.

But it could be because the tribe has a congressionally designated $30 million pot that it can use to buy land thereby sidestepping what's usually a cumbersome federal review process for tribes that want to build off-reservation casinos.

And by buying properties for $4 or less, the Seneca Nation could theoretically make that $30 million, or whatever is left of it, go a very long way.

"Oh, man, they could buy the whole city," said Joseph Finnerty, a lawyer for a Buffalo citizens group that is suing the U.S. government, charging that the congressionally designated fund was not intended to make it easier for the tribe to build casinos.

The Senecas are not likely to try to buy all of Buffalo. The tribe's purchases so far are tied to casino developments. And under the tribe's casino deal with the state, it appears that future acquisitions probably would have to either be part of the casino developments or for tribal housing projects adjacent to them, or adjacent to the tribe's Southern Tier reservations.

Neither Seneca Nation President Barry E. Snyder Sr. nor tribal lawyer Robert Odawi Porter would comment. And that leaves some questions unanswered.

It's unclear how much of that $30 million is left.

It's unclear how much land the Senecas might want to buy, and for what purpose.

>'It smells'

And it's also unclear how the U.S. Department of the Interior which can stop such land deals within 30 days of their submission -- views the Seneca land transactions. Nedra Darling, a spokesman for the department's Bureau of Indian Affairs, did not respond to an inquiry about the matter.

But it is clear that, in cases where the land had been privately owned, it comes off the tax rolls when the Senecas buy it. And it becomes sovereign Indian territory, where Seneca laws apply.

The two-step land deals came as a shock to local casino critics and supporters, and even to one of the investors who sold the tribe some of its Buffalo land.

"At the very least, it smells," said Finnerty, who represents an anti-casino group called Citizens for a Better Buffalo.

Former Buffalo Mayor Anthony M. Masiello, who wrote a letter to Interior Secretary Gale Norton last fall in support of the Seneca land acquisition, said he was unaware the tribe's gambling corporations were reselling land to the tribe at a pittance.

"This is the first I've heard of it," Masiello said. "I'm not familiar with the issue. Until I am, I'd rather not comment."

Casino critics said it appears the Senecas are doing the two-step land purchases for one of two reasons.

Perhaps the tribe wants its Buffalo casino development to grow dramatically.

"Our suspicion is that this nine acres is merely a foothold, and that there's a much larger, and in our view, more ominous plan yet to be revealed," Finnerty said.

Then again, it's also possible the Senecas have used up a vast portion of their $30 million pot and needed a creative way to use whatever is left to buy additional properties, said Richard Lippes, another Buffalo attorney involved in litigation trying to stop the Buffalo casino.

Congress gave the Senecas that $30 million in the Seneca Nation Settlement Act of 1990, which ended a long-standing lease dispute regarding Seneca-owned land in Salamanca.

That act of Congress included language allowing the Seneca Nation to use the $30 million to buy "land within its aboriginal area in the state or situated within or near proximity to former reservation land."

Interior Secretary Norton wrote in 2002 that Niagara Falls and Buffalo meet that criteria.

And for that reason, the Senecas were able to build their Niagara Falls casino without going through the arduous community impact review called for under the federal Indian Gaming Regulatory Act.

>Lawsuits filed

The Senecas hope to do the same in Buffalo. And to try to prevent that, Citizens for a Better Buffalo has filed a lawsuit in federal court, contending the Seneca Nation Settlement Act was intended to rectify the Salamanca property dispute and not to give the Senecas a quick and easy way to build off-reservation casinos.

While Masiello and Gov. George E. Pataki wrote letters to Norton backing the Buffalo land purchases, Erie County Attorney Laurence K. Rubin wrote to her to complain about the impact the Buffalo casino deal could have on property and sales tax revenue.

Told about the Senecas' two-step property transactions, Rubin said: "I think it shows the problems the Seneca Nation Settlement Act, though it perhaps had well-intentioned goals, is now being used to foist casino gaming on a community that doesn't necessarily want it."

Anti-casino lawyers who also are suing in state court to try to stop the Buffalo gambling hall think the courts wouldn't easily swallow the Senecas' apparent argument that they're buying land for as little as $1 per property.

"I don't think there's any question that, for all legal purposes, the gaming corporation and the nation are the same entity," Lippes said.

And Carl P. Paladino, part of a group of investors who sold the Seneca Erie Gaming Corp. more than half of its Buffalo property, said the public would likely object to additional Seneca land deals.

"I don't think that's in the cards," Paladino said.

If the Senecas tried to stretch their $30 million pot to buy huge amounts of property, "we'd all be suing them," Paladino added.

e-mail: jzremski@buffnews.com

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