When the Seneca Niagara Casino opened on New Year’s Eve 2002, it was surrounded by neighborhoods of rotting and dilapidated housing and vacant storefronts lined nearby Niagara Street.

Eight years later, the view hasn’t really changed.

“It’s pretty much what you could have predicted,” said Bryant Simon, director of the American Studies Program in the Department of History at Temple University, and an expert on casinos and urban renewal. “Since the 1970s, we’ve always wanted our urban renewal to be quick fixes.”

Simon said that has led state and local governments to push for the construction of all types of mega-projects like theme parks, aquariums, sports stadiums and, of course, casinos. But Simon, who has written a book on the economic development experiences of Atlantic City, said there are no silver bullets when it comes to revitalizing a blighted city.

“(Niagara Falls) could have looked at Atlantic City, they could have looked at Detroit,” Simon said. “(Casinos) basically destroyed local business in Atlantic City.”

While city and state leaders painted a picture in 2002 of restaurants and retail outlets flooding into the South End to cater to crowds of casinogoers, the reality has been starkly different.

While new restaurants such as Caffe Lola, Murphy’s and Wine on Third have opened on Third Street since the casino arrived, others like Shadow, Cafe Etc. and the Orchard Grill on Main Street have shut their doors. Simon said 250 Atlantic City restaurants went out of business as multiple casinos opened there.

Yet local developer Shawn Weber, the man behind the Third Street restaurants and the renovation of the Jefferson Apartments, said none of those ventures would have happened without the casino.

“I can’t imagine what the city would look like today without (the casino),” Weber said. “Wine (on Third) wouldn’t be there, the Jefferson renovation would have never happened without it. Murphy’s wouldn’t be there. I think everything would be boarded up and empty.”

Niagara Tourism and Convention Corp. President John Percy agrees.

“I think it’s had an impact,” Percy said. “I think the Crowne Plaza would not have had a million dollar renovation if it wasn’t sitting across the street from that casino.”

Percy also doubted the state would have funded the construction of a state-of-the-art conference center in the abandoned Falls Street Faire complex without the casino.

“(The conference center site) would be vacant,” Percy said. “And I’d be scrambling to put up something in front of it (to hide the view) when we have conventions in town.”

Despite the so-called green shoots of development that Percy and Weber point to, Simon said substantial, long-term redevelopment rarely follows casinos.

“I’ve heard those (development) promises before,” he said. “Casinos have been proposed again and again as urban renewal and they don’t work. The basic premise of a casino is t lock people in, have them gamble all of their money and, when they are finally out of money, release them. The casino doesn’t want competition from (businesses in) the city.”

Peter Kay, the Falls economic development director, takes issue with that assertion from Simon. Kay insists the Seneca Nation is supportive of spin-off development from its casino.

“We spoke (to casino officials) and they are not opposed to other restaurants and attractions,” Kay said. “In fact, they would like to see some family oriented attractions for the people who come here.”

So far, development officials like Kay have been unable to deliver.

Percy also argues that by attracting more people — those who want to gamble and see the falls — into the region, the casino and its hotel have had a positive impact on other lodging businesses.

“What the casino has done is improve our occupancy and our average daily (room) rate (at local hotels and motels),” Percy said.

However, Frank Strangio, president of the Niagara Falls Motel and Hotel Association and the owner of the Quality Inn on Niagara Falls Boulevard, said the casino’s impact on business has been minimal.

“We were for the casino. We knew we had to do something,” he said. “But I never saw it (as an economic catalyst). I don’t see it (sparking redevelopment) going forward. It’s not a silver bullet.”

Strangio also said the fact the casino sits on sovereign Native American land gives them a huge advantage over other businesses that might look to locate nearby.

“They are a tax-free entity,” Strangio said. “When you have a hotel that doesn’t pay property taxes, sales taxes or occupancy taxes, they have a huge cost advantage. So how do you compete against it? Whose going to build a high rise Hilton across the street?”

Kay, though, claims the casino and its hotel should not inhibit other lodging development.

“Their (casino) rooms are four star, they are not in the same market (as other local hotels),” he said. “The casino is very positive, I think, for downtown.”

Another negative the casino brings, according to Simon, is retarding what little development that might occur by luring speculators to inflate property prices. After millions of dollars in state and local funds were used to redevelop the infrastructure on Third Street, most of the prime property was purchased by foreign investors.

Those properties now sit vacant and boarded up.

“(The casino) holds up development,” Simon said, “because speculators buy the (nearby) properties and they sit on it (hoping to sell it for large profits to other casino developers).”

Major new housing initiatives, announced in the aftermath of the casino’s opening, including a joint venture between the Senecas and Niagara Falls Memorial Medical Center, have also failed to materialize.

Despite the lack of spin-off development, Percy says he remains optimistic.

“You’re talking to someone selling (the Falls) to the nation,” Percy said. “I’m always going to be the glass is half-full guy.”

Weber also chooses to look forward with hope for more casino-related development.

“Everybody thought there was going to be more spin-off,” Weber said. “I’ve always said to people, Niagara Falls is a sinking ship and the casino was a life raft. But we’re not rescued yet. I never was a believer that the casino was the end-all. It’s a piece to the puzzle. Can you imagine if we didn’t have the casino?”

But Simon, the casino expert, warns that waiting for casino-spurred development may only lead to disappointment.

“It doesn’t lead to reinvestment. It’s a bad model for redevelopment, but (cities and states) just keep repeating it,” Simon said. “Who benefits from casinos? The casinos.”

Contact reporter Rick Pfeiffer

at 282-2311, ext. 2252.