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Casino Plans Take
Major Step Forward

By Nathan Mayberg
MONTICELLO — November 19, 2004 – In a span of three and a half hours, two casinos received approval from the Sullivan County Legislature in a 6-3 vote, amid a tense atmosphere.
New York State Governor George Pataki topped off his settlement with the Seneca-Cayuga Tribe of Oklahoma last Friday by signing off on a similar land-claim agreement with the Cayuga Indian Nation of New York Wednesday evening.
Not to be outdone, the Sullivan County Legislature set off a pandemonium of reactions when they approved both settlements with certain conditions after several emergency meetings and executive sessions.
The Legislature did so under pressure, due to reports that the United States Congress was moving to approve the settlements with the Seneca-Cayugas and the Cayugas.
However, there appeared to be no indications from Congress that any such legislation would be ratified.
United States Congressman Maurice Hinchey said he objected to the “clumsy” and “haphazard” manner in which the legislation was being pushed through the federal Appropriations Committee before Congress recessed tomorrow until late January.
Furthermore, the sponsor of the appropriations bill, Frank Wolf (R-Va.), was opposed to gaming, said Hinchey.
And the settlement which Pataki wished to pass through the committee had nothing to do with the appropriations bill, Hinchey claimed. Adding it on would be breaking the rules of the House, said Hinchey.
Furthermore, Hinchey said upstate Republicans had serious questions about the bill – none more important than Sherwood Boehlert, the Republican Congressman representing Cayuga and Seneca counties.
Hinchey said the bill was “up in the air.” Other sources involved in the process confirmed the legislation would be difficult to pass.
United States Senator Charles Schumer has voiced support for the bill in concept.
Pressure to Vote
The vote itself by the Sullivan County Legislature came after several stiff and virulent objections – and some supportive comments – from several local citizens.
The legislature held an emergency meeting of the Executive Committee at 9:30 a.m. yesterday after no more than an hour of notification to several parties – and as little as 25 minutes, in some cases.
Legislators were handed a copy of the state’s settlement and met with Louis Cappelli, one of the principal stockholders of Empire Resorts, and Cliff Ehrlich, Vice President of Operations for Empire Resorts. Cappelli, who acquired a 40 percent share in Empire after striking a deal with Empire to sell them the Concord and Grossinger’s, urged the legislators to move quickly to support the measure.
Legislators who voted for the measure believed that if they failed to accept the settlement with the conditions, they would have no protections in federal legislation. Those legislators included Leni Binder, Rodney Gaebel, Greg Goldstein, Jodi Goodman, Jonathan Rouis and Sam Wohl.
Legislators voting against it were Chairman Chris Cunningham, Ron Hiatt and Kathleen LaBuda. Among other issues, they objected to the frenzied process in which the legislation was enacted.
The legislation will now necessitate approvals from the United States Congress and the New York State Legislature.
The new agreement with Pataki and the Cayuga Nation of New York includes the following: the nation will be required to drop all cross-appeals on land claims and accept whatever judgment is handed down by the United States District Court.
Due to the loss of property tax revenue from the casino property (near the Monticello Raceway) being placed in federal trust, the state and the nation will each annually contribute the sum of $3 million. The nation will be required to negotiate with the “appropriate local government authorities for the provision of fire, police and other municipal services, and other appropriate local issues.”
Due to the land being held in trust by the federal government and the sovereign status of the tribe, there is no provision in the agreement for collecting any taxes.
However, the agreement with the Seneca-Cayuga Tribe of Oklahoma – the other of the two tribes with which Empire has an agreement for a casino – provides for the collection of all taxes.
The resolution passed by the legislature calls for the agreement to include similar provisions per their previous agreements with the St. Regis Mohawks and the Stockbridge-Munsee Band of Mohican Indians.
Among other provisions, those agreements call for a $15 million annual mitigation fee, as well as accommodations for any impacts on infrastructure and fire safety. The county and tribes will have 30 days to come to an agreement per the resolution.
But Empire Resorts said they would only pay the sales taxes on the Seneca-Cayuga casino (at the Concord Resort) as a payment towards the $15 million mitigation fee.
The New York State Legislature has only approved the siting of up to three casinos in the Town of Thompson. So far, there are four proposals.
Statements For and Against
The chaotic events of the day began with statements by Ehrlich and Cappelli urging the legislature to act immediately. They were then asked a few questions by legislators, until Cunningham called for an executive session.
Gaebel said that the tribes and developers would be required to pay for any infrastructure repairs resulting from the casinos. He said he was especially concerned with the impacts of the Concord Resort, which is located near the Kiamesha Corridor off Route 42, not too far from the proposed St. Regis Mohawk casino at the site of Kutsher’s Sports Academy.
Hiatt asked Cappelli who would have the authority over the environmental proceedings. Cappelli responded that he had received all necessary approvals, going so far as to state that his company could “start construction today” at the site of the 1.6 million-square-foot Concord Resort.
Dick Riseling of Callicoon Center urged the legislators to “not be in a hurry” – to no avail. He also called for a public hearing, which was not given. He said the impacts on local schools and traffic would be substantial.
“This is the issue of a generation,” he said.
Cunningham eventually called for an emergency meeting of the full legislature so that they could vote on the bill.
Hiatt gave the most prolonged statement before the vote. He said he was supportive of any legitimate business and considered casinos a legitimate business. However, he had serious objections on how the legislation had scuttled the process.
He said the settlement offer raised a whole number of questions. He said he would not be able to explain the answers to his constituents. In fact, the legislators had not even received the final agreement.
“This is government. There is more riding on this than just somebody’s pockets,” he said.
Binder said her vote was consistent with her previous votes supporting the agreements with two other casinos.
Rouis said the agreements would “protect the interests of the county.” He said the county would be able to negotiate specifics with the tribes over the next 30 days.
Cunningham said that “this has probably been the craziest day since I’ve been chairman.”
He said he had opposed casinos in the past and would continue to do so. However, he believed “there is a real potential that the bill could get passed in Washington, D.C.”
He called the process “flawed. . . . I’m not happy with this.”
New York State Senator John Bonacic was extremely cautious in his reaction to the news. He said he had yet to see the final document and would not act until he did so. However, Bonacic called the proposed settlement a “step in the right direction,” while also noting, “We have had false hopes before.”
“I want to make sure that the County of Sullivan has a satisfactory agreement” to protect against the impacts, he said. “I want the taxpayers to be protected.”
Bonacic said that he had learned a lesson from the Turning Stone Casino near Syracuse, where the casino operators drove local businesses out of the area due to their ability to sell goods tax-free. Locally, only the Seneca-Cayuga casino would allow for the collection of taxes.
Bonacic said that, at the least, he would push for the taxing of the distributors who sell to casinos.
Assemblywoman Aileen Gunther said, “This is probably the most significant development in Sullivan County.”
However, she faulted the governor for failing to communicate with the local community about the agreement. Furthermore, she did not approve of the fact that the state could generate up to a quarter of a billion dollars in revenue from each casino, while the counties would be seeing far less. Gunther said she had serious questions as to whether the county would be fairly compensated for the various impacts.
In addition, Gunther called the Sullivan County Legislature’s passing of the bill “rushed.” She said the legislation was “a significant decision. You definitely need hours to ponder” such an issue.
She said the impacts to her children and children’s children would be enormous.
“I am definitely shocked,” she remarked.

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