Anti-gambling activists who seek to rescind an agreement establishing the Seneca Gaming Corp.'s Seneca Buffalo Creek Casino gained support from at least three Common Council members Tuesday. And two others are keeping an "open mind" about a possible legal challenge.
The issue surfaced after Citizens for a Better Buffalo presented a new study conducted by a Niagara University expert
"It seems to me the city is the Senecas' poodle," said attorney Dianne (CQ)Bennett. "They are not acting like good business people in this transaction."
She also said a permanent casino at the Cobblestone District site is not a "done deal" and that legal efforts to reverse early federal rulings allowing its construction continue.
That idea now appears to be gaining some traction in City Hall. Ellicott Council Member Darius G. Pridgen told a reporter after the meeting that group leaders made a compelling point and that he thinks the city must at least explore the possibility of rescinding the agreement.
"If this was any other developer, we would have had his head," said Pridgen.
Delaware Council Member Michael J. LoCurto said it's unconscionable that Seneca Gaming has not filed required reports or lived up to other promises that range from launching extensive marketing to out-of-area visitors to creating a large work force.
"This has been a tall tale from the beginning," LoCurto lamented. "At some point, something has to give."
South Council Member Michael P. Kearns said he would support rescinding the agreement in which the Council narrowly approved the sale of land on Fulton Street to Seneca Gaming. He argued that even if a permanent, large-scale casino eventually is built, one need only look at the Seneca casino in Niagara Falls to realize that the project will not become an economic engine for surrounding businesses.
"We will not win in this gamble," Kearns said.
Council President David A. Franczyk and North Council Member Joseph Golombek Jr. said they're keeping "open minds" on terminating the contract. Golombek said one concern involves a "hole" in the city budget if the temporary casino is closed. According to the city budget office, Buffalo receives $1.2 million in casino revenue annually.
Timothy A. Ball, the Council's top legal adviser, said the agreement could be rescinded, but only after a detailed process that would include arbitration and likely court action.
The Council developments followed a report issued by Niagara professor Steve H. Siegel contending that city leaders should be wary of plans to expand the downtown casino even on a smaller scale than originally envisioned. He contends that the Senecas effectively enjoy a 15 percent price advantage over non-Indian competitors in the hospitality industry. He called the advantage "staggering."
"The continued viability of that vibrant industry as an economic generator would be at stake if the Buffalo Creek Casino was ever completed," Siegel said. "What we rarely hear about is the devastating negative economic impact that research shows occurs when a tax-exempt casino is placed in what is claimed to be sovereign land within an urban setting."
The Siegel report stems from an analysis of the casino company's latest filing with the Securities and Exchange Commission and is the latest salvo fired over the last several years by Citizens for a Better Buffalo. It supports a 2002 suit filed in U.S. District Court contending the Seneca Nation of Indians has no legal claim to the downtown parcel upon which it has built a temporary casino. U.S. District Judge William J. Skretny ruled in 2007 in favor of the group, but after appeals are exhausted, a final decision is thought to be years away.
But now the group is working to rally public opinion against any expansion of the project, making the appeal to the Council on Tuesday and pressing its case before the editorial board of The Buffalo News. The group includes Bennett; former Rep. John J. LaFalce, D-Town of Tonawanda; and attorney Robert J. Kresse.
The group said that, fueled by millions of dollars in annual earnings from its casinos, Seneca Gaming appears to be drawing out the legal process in the hope opponents will no longer be able to afford the court case.
Seneca Nation President Robert Odawi Porter revealed in December that because of the recent refinancing of $500 million in the nation's gambling corporation debt, Seneca gambling officials are now moving forward with a revised plan to upgrade the temporary casino.
Porter has also attempted to confront the competition issue, meeting with local government officials and other waterfront stakeholders to develop a collective approach for the area. He does not envision the original $330 million development that included a hotel and destination-type gambling resort, but does see a downsized attraction "more harmonious" with downtown and waterfront development plans.
Indeed, Seneca Gaming officials emphasized that and other points in a statement released after the Council session.
"Seneca Nation and Seneca Gaming Corporation leaders have made a concerted effort in Buffalo to discuss how any future developments at the Buffalo Creek territory could work in a complimentary fashion within the larger economic development vision taking shape for the downtown area in closest proximity to us," the company said. "We remain encouraged by the energy and tenor of those conversations."
Seneca Gaming also reiterated its position that the Buffalo casino is a source of revenue for the city and attracts visitors.
"One need to look no further than the more than 3,600 jobs our facilities provide and our more than $110 million annual payroll -- despite a down economy -- to begin to understand the investment and impact the Seneca Nation and Seneca Gaming Corp. have made locally," the statement said. "Our properties attract tens of thousands of visitors each week, including an average of 14,000 weekly visitors at Seneca Buffalo Creek Casino, making them among the most popular destinations in the region."
But the anti-gambling group is steadfast in its opposition. It points to the new Siegel study, conducted independently and without support from Citizens for a Better Buffalo, that says Seneca casinos in Western New York gave away $42 million in "loss leaders" over a nine-month period.
"They give away more rooms per night than the Hyatt and the Adam's Mark combined," Bennett said. "No one can compete."
The group also cites what it considered meager paybacks to the City of Buffalo which, at $5 million to $7 million, roughly equals revenue from parking tickets. That pales in comparison to the social costs of gambling, the group said.
"They have created a culture in this community of gambling as a way of life," LaFalce said, "which I think is destructive."
While the group acknowledges the business done by the Seneca Buffalo Creek Casino, it fears any expansion will produce the same effects on nearby businesses as the Seneca casino in Niagara Falls.
"Wherever casinos are, there are social impacts," Kresse said. "And we have not seen the economic impact of the casino on our community because it has not yet been implemented -- it's only a small vacuum cleaner. Now Siegel tells us we will not have a level playing field."
Bennett also pointed to the flip side of the Senecas' refinancing of its debt, explaining the casino will no longer be required to file periodic reports with the SEC.
"We will not have any transparency in the future," she said.
The group also is circulating a new report from another anti-gambling group -- Partnership for the Public Good. It contends that because Seneca Buffalo Creek Casino is located in a poor neighborhood of a poor city, its presence will only exacerbate poverty.
"The explosive growth of gambling in New York State, and Western New York in particular, is disastrous for people with low incomes," said Sam Magavern, the group's co-director. "A large percentage of gambling revenue comes from problem gamblers, and many problem gamblers are people with low incomes."
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