<!--Mark Scheer--><table width="234" border="0" cellspacing="0" cellpadding="0" background="http://static.cnhi.zope.net/flashpromo/niagaragazette/images/byline_234x60.jpg" height="60"><tr><td><div align="center"><font size="3" face="Arial, Helvetica, sans-serif">By Mark Scheer</font><font face="Arial, Helvetica, sans-serif"><br /></font><font size="1" face="Arial, Helvetica, sans-serif"><a href="mailto:mark.scheer@niagara-gazette.com">mark.scheer@niagara-gazette.com</a></font></div></td></tr></table>
What happens when the casino deal ends?
When it comes to operations at the Seneca Niagara Casino, the more important question may be: Which deal are you talking about?
Class III gaming operations in Western New York are covered under a compact authorized by the state and the Seneca Nation of Indians.
The distribution of the local share of slot machine revenue is outlined under a separate state statute.
The year 2016 figures prominently in both agreements.
For the compact itself, 2016 represents, at the very least, the completion of the initial phase and the beginning of another.
As for the revenue distribution agreement, 2016 signals the end of the line entirely and potentially the beginning of another hard-fought negotiating process.
In both cases, local officials say they are keeping an eye on the future but are doing so with a clear understanding that someone else may be in office when the time comes to sit down at the bargaining table.
“A lot is going to depend on who the players are,” said state Assemblywoman Francine DelMonte, D-Lewiston.
The compact doesn’t necessarily require any negotiating by either party to be extended.
The language of the compact calls for an automatic renewal after the initial 14 years of the agreement. Technically, the first phase of the compact expires on Dec. 9, 2016. At that point, operations are to continue unchanged for another seven years unless the state or the nation objects. Either the state or the Seneca Nation can submit concerns in writing up to 120 days before the Dec. 9, 2016 deadline. Should objections be raised, the compact calls for both parties to “use their best efforts” to address the concerns through “frequent and regular good faith negotiations.” In the event the issues cannot be resolved within 120 days, the compact allows for either party to submit its issues to binding arbitration. During the arbitration period, the existing terms of the compact would still apply.
The compact also can be terminated if the federal Indian Gaming Regulatory Act is repealed, the nation adopts a referendum revoking its authority to conduct Class III gaming or either the state or the nation commits a material breach of the existing agreement.
DelMonte said she doesn’t anticipate any challenges from either side.
State Sen. George Maziarz, R-Newfane, would like the state to file an objection, saying it would offer entities in Niagara County an opportunity to push Albany to return more of the revenue it receives to the host municipalities.
“I would hope that at least from the state’s side, the state would want to renegotiate the contract,” he said.
Real estate developer Carl Paladino agrees. Paladino, who supported a lawsuit that eventually prevented the Seneca Gaming Corp. from moving its Buffalo casino development to Cheektowaga, believes the compact would not hold up to scrutiny on a number of levels. He maintains substantive changes were made in the language from the original memorandum of understanding signed by Gov. George Pataki to the compact authorized by state lawmakers. As a result, Paladino believes the city of Niagara Falls in particular would have legal grounds to force a discussion on a new deal that could offer more benefits to host communities and relax some of the tax and other incentives currently afforded to the nation’s gaming operations.
“The compact should have restated the model that was followed in the MOU and it didn’t,” Paladino said.
There doesn’t appear to be any plans to challenge the terms of the compact, but Niagara Falls Mayor Paul Dyster said he is familiarizing himself with its components and legal structure. He said it is particularly important for the city’s future leaders to be aware of the approaching deadline and be ready to participate in any negotiations should the opportunity arise.
“It’s still a little too early, but that day is coming sooner than a lot of people realize,” Dyster said.
The mayor believes it is important for entities that have a stake in the agreement to at least consider the ramifications of life after the terms of the original gaming agreement have expired.
“When it is time to act, we will be prepared to have the talk with other entities at the appropriate time,” he said.
Renewal of the casino cash distribution statute could be a far more contentious issue.
The crafting of the original “tribal-state compact revenue account,” or 99-h as it is commonly known, featured a rather ugly and lengthy battle among local officials over how best to divvy up the money and which entities deserved pieces of the revenue pie.
The current statute is set to run out in 2016.
What happens after that is of particular importance to the city, according to Comptroller Maria Brown. Portions of the city’s future casino revenues already are committed to debts owed beyond 2016, including the $2.8 million principal and interest payments on the construction of the Municipal Safety Complex on Main Street. Beyond 2016, Brown said it would be difficult for the city to come up with the level of funding needed to cover its obligations absent casino revenue.
“I would hope whoever is in office would recognize the city’s need for this money,” she said.
DelMonte and Maziarz went toe-to-toe over the crafting of the original statute. Both concede they may not be around when the next round of negotiations occurs.
“Clearly, the landscape is going to a lot different then,” Maziarz said.
Of course, Maziarz noted there’s nothing to stop state lawmakers from adjusting the language now, or at some point before 2016. He cited last year’s decision by DelMonte and state Sen. Antoine Thompson, D-Niagara Falls, to sponsor an amendment adding funds for the development of an underground railroad heritage area and transferring the county’s share to the city as an example.
As for the results of the original casino cash deal, Maziarz believes some partners spent their money more wisely than others.
If he had a say, Maziarz said he’d push for the future agreement to include provisions for providing funds to entities like the Niagara Falls School District and Niagara Falls Memorial Medical Center. He said he also would advocate for greater restrictions on how the city uses its funds.
“I think a lot of it was spent in ways that were not very productive,” Maziarz said. “The question I always ask is ‘is the quality of life in Niagara Falls better today?’ ”
DelMonte and Dyster say the answer to that question is an unequivocal yes, pointing to the large number of paving projects that were done last year with casino revenue as one example of the good the money has done for the city.
As for future sharing agreements, DelMonte said her position has not changed. She believes the city should continue to exercise control over the majority of the cash and be allowed to determine what level of funding to provide to other entities based on demonstrated need.
“The current agreement is working, but moving forward I would prefer that the city have an opportunity to fund projects on a case-by-case basis,” she said.
Contact reporter Mark Scheer at 282-2311, ext. 2250.
