New York State on Tuesday received a long-delayed $564.8 million payment of casino revenues from the Seneca Nation of Indians – money that Gov. Kathy Hochul said she sees as the majority of the state's contribution to a new Buffalo Bills stadium.
"My view is that this money was all generated in Western New York, and I would directly allocate that money to go to the state's $600 million share for the stadium," Hochul said in an interview with The Buffalo News.
Sports economists and stadium experts say the price tag for a new stadium in Orchard Park is what the region had to pay to keep the Bills, but whether it is a good deal for taxpayers is up for debate.
The Seneca Nation Council agreed to send the money to the state on Monday, five years into a legal battle over it. The Indian nation sent the money to the state after the Hochul administration forced the tribe's hand through a legal maneuver that froze Seneca bank accounts.
The Hochul administration struck a deal with the Bills that calls for the state to contribute $600 million of the stadium's $1.4 billion cost, and the arrival of the long-delayed Seneca funds means "the direct hit to taxpayers is significantly less," Hochul said.
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Counting the Seneca cash as funding for the stadium would reduce the state taxpayer funding for the project to $172 million, she added.
Not all of the $564.8 million that arrived from the Senecas will stay in state accounts, however. Tens of millions will go to the cities of Niagara Falls, Buffalo and Salamanca as their shares of casino revenues. The Senecas had stopped sharing with the state and local governments in 2017.
The payment to the state came after a five-year legal battle over whether the Senecas had to continue contributing 25% of the slot machine revenues from their three casinos to the state, which would then share a portion with the cities where the tribe's casinos are located.
The 2002 compact that led to the construction of the three casinos called for the Senecas to share that money with state and local governments over the last half of the 14-year agreement. The deal included an automatic seven-year renewal that took effect in 2017 if no party to the agreement objected -- but the Senecas asserted they no longer had to share casino revenue during that renewal period.
The state sued to try to force the Seneca Nation to pay up, "and we won in court many, many times," Hochul said.
The state forced the tribe's hand over the weekend, asking KeyBank, which holds the Seneca Nation's bank accounts, to freeze them under a state law that allows creditors to seek such action to force debtors to pay up.
The new stadium deal includes a non-relocation agreement that prohibits the team from moving. The agreement gives both the state and the county the right to enforce the non-relocation terms.
Seneca Nation President Matthew Pagels indicated the tribe had no choice but to send the money to the state.
“The Seneca Nation simply could not stand by while New York State intentionally attempted to hold the Seneca people and thousands of Western New Yorkers hostage,” Pagels said in a statement.
The freeze meant that many Senecas found they could not conduct basic financial transactions starting last Saturday.
"This is three days now, and there are already checks out there that are bouncing," said Leslie Logan, a founding member of the Seneca Mothers of the Nation, a group that has resisted paying the funds to the state. "There are homeowners payments that cannot be paid. We can't issue invoices for pharmaceuticals. There were all kinds of repercussive impacts that were crippling, just crippling."
A Seneca Nation spokesman said KeyBank was in the process of lifting the account freeze Tuesday.
After the Seneca Council agreed to release the funds, Hochul said she was simply making sure that the state would finally get the money that court after court said the state was owed.
"I have been pushing and pushing and pushing behind the scenes to get this done," she said.
Acknowledging the state "started playing hardball" with the Senecas, Hochul indicated that the state's get-tough approach wasn't limited to the legal move that froze the nation's bank accounts.
Noting that the state's casino compact with the Senecas will expire next year and will have to be renegotiated, Hochul said: "I made clear that I will not have a single word of conversation about that until the money is in the bank."
Pagels' statement indicated that negotiations for the next compact won't exactly start on good terms.
“Don’t use the people of Western New York as pawns in your obvious desire to destroy the Seneca Nation,” he said. “You have an obligation under federal law to negotiate a compact with the Seneca Nation in good faith. Honor it.”
For now, though, Hochul seemed relieved that money she said had been owed the state for years finally arrived – just as the Bills' stadium deal was revealed.
Hochul stressed the massive casino payment should ease the concerns of those who object to the state's $600 million share of the Bills stadium cost.
"It could be recognized as an offset," she said.
Jerry Zremski
Washington bureau
Jerry Zremski, who has covered Washington for The Buffalo News since 1989, is a lecturer at the Philip Merrill College of Journalism at the University of Maryland.
