The Pataki administration and the Seneca Nation of Indians forged a long-awaited deal Wednesday to bring three Las Vegas-style casinos to Western New York, including in the downtown areas of Buffalo and Niagara Falls. Proponents say they will create thousands of jobs and spur development in the ailing communities.
Hailed by Gov. George E. Pataki and some local government leaders as a tool to jump-start the region's economy and help compete with nearby Ontario's booming gambling industry, the casino plan drew an equal rush of criticism from religious leaders concerned about creating new gambling addicts, and others who lashed out at Pataki for not resolving the Senecas' land-claim lawsuit involving Grand Island.
The agreement, which was released with few details, still needs approval by the State Legislature and the federal government and must be approved by a referendum on the Seneca reservations, expected to be held next month. It calls for three casinos:
The first would open in the Niagara Falls Convention and Civic Center by April 2002, which local tourism officials hope will stem the tide of thousands of bettors to Casino Niagara in Niagara Falls, Ont.
A second casino would open by the end of 2002 at an undisclosed location in downtown Buffalo. Sources said the Statler Towers, owned by a major Republican Party contributor, is the leading contender.
A third casino, also undisclosed at this point, would be the only one of the three facilities located on Seneca land. It would likely go, sources say, on the Senecas' Cattaraugus Reservation or possibly just off it on Indian-owned land in the Town of Hanover.
"There is no reason why, on our side of the falls, we can't surpass that with even more investment, more jobs and more opportunity," Pataki said Wednesday at Niagara Reservation State Park as he motioned across to the Canadian side, where $2 billion in development is under way.
"Western New York needs this," added Seneca Nation President Cyrus Schindler, who began selling the casino plan Wednesday to fellow Senecas as Pataki worked the phones at the Capitol and aboard his state plane trying to get state legislative backing.
Schindler said the Buffalo and Niagara Falls casinos will generate up to 4,000 jobs.
"If finally approved by the nation, this agreement should be a tremendous economic boost for the Seneca Nation and the entire region," said Schindler, who praised the respect for sovereignty shown by the state to the Senecas during the long talks.
But critics, led by several longtime Democratic and Republican state lawmakers from Western New York, said the deal is wrong financially and morally.
"Buffalo is one of the poorest cities in America. Its population is struggling in many, many aspects, and people are now going to be spending much, much more of their money on gambling," said Deputy Assembly Speaker Arthur O. Eve, D-Buffalo. "All I see this creating is many more problems."
"Putting a casino in the dead center of the cities with the poorest areas around them takes advantage of the most vulnerable to provide great income for casino operators," said the Rev. Stan Bratton, coordinator of the Western New York Coalition Against Casino Gambling.
Even some of Pataki's usual backers raised doubts about the deal. "From what I've heard, I'm very disappointed," said State Sen. Dale M. Volker, R-Depew, who criticized the governor's secretive approach that left the region's veteran lawmakers out of the loop and for crafting a deal that does not resolve the Senecas' controversial land claims involving Grand Island and other areas.
The Pataki administration said it will be proposing legislation to indemnify property owners on Grand Island, which, in essence, will "make sure the people are protected" if the state loses its land claim settlement case with the Senecas, said Michael McKeon, a spokesman for the governor. There were no details how such a plan would work, but it could leave the state liable for hundreds of millions of dollars in the event of a Seneca victory in court.
In all, the casinos, for the first time in New York, would hold thousands of slot machines, which the Senecas insisted are needed to compete with Ontario's Casino Niagara and Fort Erie Race Track, which both have slots. The state's other two Indian casinos, one near Utica and one along the St. Lawrence River in Franklin County, have video lottery terminals, which some gamblers consider lesser betting devices.
The projection of a casino being up and running by spring is overly ambitious, gambling industry insiders said. Besides state legislative approval, a host of details, such as how many hours a day the casinos will be open and the number of slots that will be permitted, must be agreed to between the Pataki administration and the Senecas in what's known as a casino compact.
The U.S. Department of Interior also must approve the plan to allow the land to be taken into trust, making it Seneca land. Officials at the Interior Department's Bureau of Indian Affairs said Indian casino projects generally take from one to two years to complete.
But Don Pongrace, a Seneca lawyer, said the Senecas have a unique status as a result of a 1994 land settlement case with the federal government to get the casino deal approved in far less time.
The whole deal will go nowhere if Seneca Nation members don't approve it in an upcoming referendum. And considering past heated confrontations over the issue among Senecas, that is far from certain. The referendum process is expected to be completed in July.
Meanwhile, gambling critics who successfully sued the state recently over Indian casino deals were already meeting with lawyers by nightfall Wednesday. Members of the group said a lawsuit seeking to block the deal, especially its first-ever plan to bring slot machines to New York, would be filed soon, promising to delay matters.
With Western New York a crucial political front for him as he likely seeks re-election next year, Pataki is rushing to get the plan approved by state lawmakers, whose role in Indian casino deals was mandated by a state court judge in April.
The Senate today is scheduled to end its official 2001 session, though it will be back in the coming weeks to deal with the unresolved state budget and other issues. Still, Pataki was working to get the Seneca bill pushed through the Senate before the ink dried on his Seneca deal and lawmakers leave Albany. Senate Majority Leader Joseph Bruno, R-Brunswick, who sources say is ready to give quick approval to the Pataki casino deal, did not return calls to comment.
Casino details sought
Volker, the dean of the Western New York Senate delegation, said lawmakers are disappointed Pataki crafted a deal that is not only silent on land claims, but also does nothing to resolve other issues with the Senecas, such as those involving sales taxes on cigarettes and gasoline sold on its reservations and disputes that have held up work on state roads that run through Seneca land.
Assembly Speaker Sheldon Silver, D-Manhattan, said his house will take at least until next week before deciding how to handle the legislation to permit the Seneca casino deal to go forth.
"I'm always interested in economic development. Clearly the cities of Niagara Falls and Buffalo need economic development and a shot in the arm," Silver said.
But he said the governor, in two telephone conversations, provided few details to him about how the deal is crafted. He said the Legislature will be unwilling to give Pataki "a blank check" to go forward with the Senecas.
He said he wants to know, for instance, how Buffalo's loss of property taxes to an Indian casino will affect school tax revenues or whether casino workers will be protected by the employment laws of New York.
Lobbyists working for the Senecas were already rushing about the Capitol on Wednesday night counting votes. Sources said they got angry receptions from some lawmakers, who were upset the Pataki administration was dropping on their desks such a major issue with so few details as lawmakers were trying to complete much of their 2001 legislative work.
Among the Seneca lobbyists working the issue Wednesday was newly hired Patricia Lynch, the former Silver top aide turned lobbyist, and former U.S. Rep. Bill Paxon from Amherst.
The casino agreement will last for 14 years, and the Senecas appear, with the few details provided, to have a lucrative deal. For starters, they got Pataki to agree to exclusivity language, the details of which weren't fully available Wednesday.
But the Pataki administration said it would give the Senecas the exclusive franchise to the slot machines and other electronic games in a large geographic area.
The Pataki administration declined to supply the memorandum of understanding it entered into with the Senecas outlining the deal's details.
State to get percentage
In return for slots and the monopoly the Senecas would enjoy from other casino competition in the region, the state will get a portion of the revenues from the slot machines.
For the first four years, the state will get 18 percent of the net drop, which is the money after payout of bets but before expenses. The state take goes to 22 percent in years 5 through 7, and then up to 25 percent for the remainder of the agreement.
The Senecas did agree, state officials said, to a presence by the New York State Police on the casinos' grounds, an arrangement some Senecas in the past have said would be a violation of their sovereignty. In addition, casino workers, including Senecas, will have to undergo state criminal background checks.
In addition, the Senecas, as a sovereign entity, will pay no property taxes on the land they use for the casinos in Buffalo and Niagara Falls. In return, the state will share a portion of the proceeds with the local governments -- though Pataki officials declined to say what that percentage would total.
Sources, however, say the state is talking about giving 3 percent of the state's share to local governments.
Seneca leaders, who have taken development proposals from five private companies offering to run the casinos, have yet to choose a private partner, Seneca President Schindler said.
The Niagara Falls site will have a head start, with a state-owned building, the Niagara Falls Convention and Civic Center, as a launch pad. The Nation will also pay off the rest of the convention center's debt, currently held by the state. Under the state's plan, a permanent casino would be built on land nearby, likely including the site of a former splash park currently under control of Niagara Falls Redevelopment.
That land was picked for a casino site by the redevelopment group in the master plan it unveiled in 1998.
"We support the governor's initiative, and we are very excited for the people of Niagara Falls," said Niagara Falls Redevelopment spokesman Roger Trevino. "We look forward to working with Gov. Pataki and the Seneca Nation toward a better future for the people of Niagara Falls and all of Western New York."
Excitement in Niagara Falls
While officials in Buffalo offered mixed reactions about a casino coming to their city, their colleagues in Niagara Falls could hardly contain their excitement. "This is the day the Lord hath made. Let us rejoice and be glad," said Niagara Falls Mayor Irene J. Elia.
"This is an opportunity to capitalize on all that's been going on over on the Canadian side," said Assemblywoman Francine Delmonte, D-Niagara Falls.
At Casino Niagara, where 8.5 million bettors -- of whom at least half are Americans -- generated $597 million in revenues last year, the money drain from the New York side over the years has been steady and deep.
"Today, the playing field between this side and that side got a whole more level," said State Sen. George Maziarz, R-North Tonawanda, whose district includes Niagara Falls. "Today is a great day."