Next story: Letters to Artvoice
The Negotiations End
by Bruce Jackson
The proposed downtown Buffalo gambling casino has been opposed by citizens’ groups and leaders in the business, education and arts communities. But, with few exceptions, there has been no resistance from Buffalo’s local government. Former Mayor Anthony Masiello was a strong casino supporter and his successor, Byron Brown, has never taken a strong public position for or against the casino.
Brown’s operating principle seems to have been that the casino situation was created by other people and his responsibility is to deal with it, asking only, “How can Buffalo get the most out of this?” rather than “Should this be taking place at all?”
Because of deals cut in Albany and Washington, says Brown, the City of Buffalo cannot block the Seneca Gaming Corporation’s Buffalo Creek casino. Instead, his administration has sought things they might get in exchange for things the Senecas might want, while leaving thinking about the legitimacy of a tax-exempt gambling casino in downtown Buffalo to the federal courts.
Recently, the Senecas wanted the city to give up the two-block segment of Fulton Street that runs through the two parcels of land they purchased between the city’s Perry Street Projects and the Cobblestone District. According to both sides, there were handshake agreements on the principal demands from the city, but when Brown asked the Senecas to sign a contract that would be enforceable in federal court, the Seneca Gaming Corporation sent Buffalo an ultimatum basically telling the city to go to hell.
On August 2, before Snyder could call a press conference announcing his ultimatum, Brown held his own, announcing the breakdown of negotiations. Over the next few days, Brown appeared on all of Buffalo’s major television news and talk programs and he met with the editorial board of the Buffalo News. His office asked Artvoice for an in-depth interview in which he could discuss “what exactly went on and how we got to where we are today.”
On August 7, I met with Brown in his City Hall office, along with Economic Development Commissioner Richard Tobe, Corporation Counsel Alisa Lukasiewicz and Communications Director Peter Cutler. I have known Brown, Tobe and Cutler since the late 1990s, when I began what would become a long series of articles for Artvoice on the proposed Peace Bridge expansion project. Brown was then Masten District representative on the Buffalo Common Council, Tobe was Erie County commissioner of Environment and Planning and Cutler handled press relations for then-Buffalo Mayor Anthony Masiello. We have, on many occasions, discussed matters of governmental responsibility and accountability, hence the casual nature of some of the exchanges reported here. This was the first time I’d met Lukasiewicz.
We began with Mayor Brown talking about his sense of how we got where we are now, after which I asked him questions. Occasionally Tobe took the answer or jumped in when Brown paused in the middle of one. More rarely Lukasiewicz did the same. Sometimes the interview with Brown became a conversation among all of us.
The two most startling things for me in the conversation came in response to my questions about what studies the Masiello and Brown administrations had commissioned regarding the downtown casino possibility, and what real power the four of them thought the city had in its relations with the Seneca Gaming Corporation.
The answer to both questions seems to be: none.
Frequently during our discussion they referred to the “term sheet,” a list of guarantees about employment, footprint expansion, and other matters the mayor’s office told the Seneca Gaming Corporation last May were conditions of the city’s cooperation on the casino project. (See the sidebar.)
Toward the end of our agreed time, I asked the question I always try to remember to ask at the end of interviews: “Is there anything we haven’t talked about that you think we should have?” Brown answered with the statement that closes this report, after which he and Tobe showed me a spreadsheet listing all the projects currently in development in Buffalo: hundreds of millions of dollars invested in or proposed for new construction, conversions and renovations, some of them in the wishful thinking stage, some in the early planning stage, some in actual development. Some would very likely happen; some would never be anything more than lines on a spreadsheet and boozy conversations at whatever places people who plan projects like that go to do their what-ifs and maybe-we-coulds.
Why would they show me all that and talk about it at length when our single agreed-upon subject that morning was the proposed Buffalo Creek casino? Perhaps to let me know that they, too, understood the difference between projects designed to suck the life out of the city and projects that would, simply by being built or set in motion, contribute to the city’s economy and vitality. Perhaps to say, “If there were some way we could just deal with what we’re showing you on the spreadsheet and not have to deal with that potential drain at Seneca Creek, don’t you think we’d do just that? But we don’t know how.”
For the city’s sake, I hope they get it figured out before it’s too late for everyone except the owners and operators of the proposed 24/7 gambling joint designed for one purpose and one purpose only: to suck the local economy dry.
Those last two paragraphs have been my opinion rather than my reporting. Take a look at what Byron Brown, Richard Tobe, Alisa Lukasiewicz and I said and make up your own mind. What follows is almost everything we said to one another about the Buffalo Creek casino Monday morning.
Brown’s conditional support
Byron Brown: My position from the beginning has always been that I thought that a casino could be a small part of an economic recovery plan for the City of Buffalo, if done the right way. My support for a casino has always been conditional. Even when I was in the state legislature it was conditional, and during the campaign I clearly laid out positions for being supportive, always saying that I could only be supportive if I thought it was a good deal for the City of Buffalo, ultimately.
In the legislature I had very limited control. I was one of 212 members of the legislature and wasn’t very happy with the way the thing was put together, never happy with the way it was done, but really didn’t have the ultimate control of the process. Now, as mayor, I have more control and my feeling has been all along that if we get what I would call a good deal I can then recommend it to the Council and to the community. If we can’t get what we believe would be a good deal, then I in good conscience, as mayor, could not recommend this to the Council or the community.
When we came in, a couple of things were happening. First, the city was going to pay for the infrastructure around the casino. I said we are absolutely not going to put taxpayer dollars in and around this project. My belief is, and our administration’s belief is, that if the infrastructure is going to be paid for and it’s important to the development, the Seneca Gaming Corporation needs to pay for it. So we finally got to the point to where there was some agreement.
But we will fast-forward to why I’m comfortable with what we thought was going to happen. Probably for six months we had been talking about this with the Senecas…
Bruce Jackson: When you say, “We had been talking about this” are you talking about Fulton Street or just in general?
BB: Just in general. Fulton Street actually came later. We started negotiating in earnest probably for the last three months. As you know, when the Senecas bought their nine acres and said they were going to build a casino, Fulton Street was not a part of that. The land they purchased is separated into two parcels and there is a city street that runs through the two parcels, totaling nine acres of land, that they purchased. They later came to us during this period and said, “You know we can build a bigger, grander, more expensive casino if the city will convey Fulton Street to us.”
And we said “Convey? What do you mean?”
“Well, this is a major economic development project and you should just give the street to us so we can do this major economic development project for the city.”
I said, “We are not going to give you a city street. We are willing to talk, we are willing to negotiate, but how the process will have to work is that we will sell the street.”
They were, like, “We won’t buy the street…this is a major economic development project and this should be treated like any other economic development project.”
We said, “First of all, every negotiation is different, number one. Number two, this is not your typical economic development project. And number three, there are instances where, if other businesses were looking to do a development and they needed a city street, that we would look at selling the street and not conveying the street.” We said, “If you are interested in the street and you want to continue to negotiate, it would have to be purchased and you would have to get an appraisal for the street.”
So they went and got the street appraised and they came back with a figure of $600,031. The process then was to send that to the city’s appraisal review board, which makes the determination as to whether or not this is a good appraisal. As part of that process we filed with the Council, so that the Council would know that we’re going to evaluate this appraisal and also so that the public could know what we are doing. You know, not trying to do anything in secret, not trying to do anything behind closed doors, trying to make sure that the public is well aware that we are negotiating what we’re contemplating.
Fast-forward: Two weeks ago we filed on behalf of the Seneca Nation a document as part of the SEQRA [State Environmental Quality Review Act] process to assess the environmental impact of this project. We had to look at two things. We had to look at what the environmental impact would be if Fulton Street got sold and Fulton Street was part of the project. And we had to look at the environmental impact if Fulton Street wasn’t sold and Fulton Street wasn’t part of the project.
With the Fulton Street included, they said they would build a $125 million casino, 200,020 square feet, 2,300 gaming tables, 2,500 parking spots and a park-like setting through the casino. Without Fulton Street, they told us in a legal document—a letter that they sent to the city, which we filed with the Council—they’d build a $70-$90 million casino. It would still be 200,020 square feet, it would still have 2,300 gaming tables, 2,500 parking spots, would still provide a thousand jobs. The only difference would be that the finishes wouldn’t be as expensive and there would not be the park running through the property.
BB: The thing that was the breaking point for us in the negotiations is, the last three months we have been negotiating back and forth. Where there were sticking points, we took the time to talk it through, try to get to a point of comfort. That had been the process.
For the last two weeks, they issued ultimatums to the city: “You do this or else negotiations will break down and we’ll go our own separate ways.” Three weeks ago when they did that, I picked up the phone, I talked to the president of the Seneca Nation and we were able to talk through it and agree that we would continue to negotiate.
The following week we got another letter of ultimatum: “Sign our agreement right now, by 11am the next day.” They gave us 18 hours—you sign this agreement in 18 hours, by 11am the next day, or we’re going to break off negotiations and we are going to go our separate way.”
We said that this is not how we wanted to do business. We are not going to be forced into something; we are not going to be forced into a bad deal. We then concluded as a negotiating team that we would announce to the public, to the Seneca Nation, to the Council, that we were recommending that we not continue to negotiate the sale or the abandonment of Fulton Street, and that the city would not go forward with that process.
When we started these negotiations three months ago, I told the Seneca Nation that I respect the president, I respect their culture, I respect their nation and I respect their word on things, but as the mayor of the City of Buffalo I can’t accept a handshake agreement. From the very beginning I told them that I needed to have an agreement in writing that was legally enforceable, and anything short of that I just could not support and I could not recommend to the Council or to the community. They knew that up front.
Contracts, sovereignty and jobs
BJ: Could you speak a little bit about the jobs aspect?
BB: We are going to give you a term sheet. This term sheet really outlines the things that the city thought were important to secure at the beginning that in our view would make this a good deal and would make this something we could recommend to the community. At the very beginning of these negotiations three months ago, we said, “This is the city’s position.” We gave it to them in writing.
With the jobs, they started using the thousand jobs figure. If you recall, they started to use the thousand jobs figure before they had even talked about what the design of the casino would be.
BJ: I could never figure out where that number came from.
BB: Exactly. So in the negotiations we were saying, “You say you’re going to create a thousand jobs. In our document, in our contract, we want you to stipulate that you are going to create a thousand jobs.”
What they decided they would do is that they would break the contract up into things that were covenants, legally binding, and things that were intentions, not legally binding. The jobs initially were in the intention section, the not legally binding section. And we said, “We don’t feel comfortable with your verbal commitment that you are going to give a thousand jobs being in the non-legally binding section. We would like to be able to talk about this.” When we got the final letter of ultimatum a week ago, the commitment of a thousand jobs wasn’t in any section whatsoever. It was completely omitted from the document that they told us we had to sign in 18 hours, by the next day at 11am.
BJ: What were they offering?
Richard Tobe: The thousand jobs moved from covenants to intentions…[and] they took out any and all reference to Buffalonians being hired. We had that in all the prior drafts and that was going to be a binding commitment, that a portion of the jobs would be Buffalonians. It disappeared from the last draft. They just yanked it.
BJ: In what court would this agreement have been enforceable, had you gotten one?
Alisa Lukasiewicz: It would have been in federal court, in the Western District.
BJ: So you were asking them to agree basically to a normal business contract that would have enforceable in federal court.
RT: With one exception. When dealing with a nation, an Indian nation, they have to do a waiver of sovereign immunity to allow access to the federal courts. We were seeking that, and they said they would do it, and they have done it with regard to all their financing. They couldn’t get [loan] money without having done it. That was one of our starting points. It couldn’t have a legally enforceable written document if their sovereign immunity hadn’t been waived.
AL: Except they would only agree to waive that sovereign immunity on a limited basis. We wanted to waiver sovereign immunity, no catchphrase “on a limited basis.”
BJ: It seemed to me that, in order for this to be enforceable, the city would have had to have access to their hiring practices, to their books about hiring.
AL: We were seeking that they would provide to us that information on a regular basis. Give us the reports and we could continue to analyze that they are, in fact, meeting the demands of the agreement, the legally binding commitment and agreement.
RT: What was odd in the negotiations was we never negotiated about numbers. They didn’t say, “Fifty percent of the jobs for Buffalonians was too high, can we make it 48 percent?” Nor the minority hiring; they said that minority hiring could be easily achieved. There’s 60 percent in Niagara Falls, they could easily do it here. Where they balked was to make any of their undertakings legally binding. So they give us intentions, said they’ve done it elsewhere, they could do it here, but they’re not putting it in the contract, not in the binding section of the contract.
BJ: This carries us to the Fulton Street negotiations. But there’s a great deal more to be negotiated between the city and the SGC.
RT: We said that we don’t have an agreement on any one point until we have an agreement on all points. We viewed the negotiations as comprehensive, and we were proceeding down all the paths on all the issues at the same time. Fulton Street was one of them, but when you look at the term sheet you see at the time we wrote this in May, we didn’t know what they intended for Fulton Street. On one of their plans, they were only seeking air rights and not the street, and so we had an alternative. When that was written we weren’t positive they were insisting on Fulton Street.
BJ: The Buffalo News seemed to say this week that nothing else in this whole process, nothing else the city might grant easements for, was at risk. It was only Fulton Street. I wondered about things like air rights over Fulton Street. Where are those other issues now? Are they suspended?
RT: They would have to come back to us if they wanted to use air rights over Fulton Street and make that request. That request would have to go to the Council and another SEQRA would have to be filed.
“We inherited this”
BJ: Speaking of SEQRA, what studies has the city done, not only under your administration but under Tony Masiello’s, into the economic and social impact of all this? This is one of the things all of us here, except Alisa, were involved in five years ago with the Peace Bridge. It was exactly this kind of question that stopped the twin span Peace Bridge project. Judge Fahey said to the Bridge Authority, “You have to look at this stuff,” and they didn’t want to, and they had to, and that changed the whole project. What’s been looked at here?
BB: I know that I have looked at and read a number of materials sent to me by the Coalition Against Casino Gambling in Western New York. Joel Rose has sent me a great deal of information, to look at and to read, which I have.
RT: I’ve been reading a lot of stuff over the years, including a lot of stuff on a certain Web site I occasionally look at. [Laughter.]
BJ: I don’t mean just stuff in opposition. I mean, what is the information that you have that says this is a good deal for Buffalo?
RT: We started with [the compact] in place. The compact had already been signed. The casino, other than the lawsuit, was coming, and what we were trying to do was make the best deal rather than face the question from scratch. In 2002, when the governor signed that compact, the decision had already been made.
But when you look at the term sheet, you’ll see what our thinking was. We address the question of economic impact and we laid out what we thought were the measures of positive economic impact. We know that many casinos are negative to a community, and perhaps some of them positive, in Las Vegas or elsewhere, but many of them are negative. We did not have sufficient information to know enough about ours to be sure.
So we laid out these factors and said, “Senecas, tell us what you believe the impact will be. Provide us the information and put it in a binding document.”
And the key questions would be: How much money is coming in compared to what’s already here? What would the tourism be? And then, once the money comes in, from whatever source, how much stays here? How will they use it? What will be the dollar flow, the hiring, local impacts, employment, purchases, all that kind of stuff. We are trying to follow where the money will come from and where it will go. And this is very tough right now, in dealing with the Senecas, to pin all this stuff down.
BB: So, as Rich said, we inherited this. This is not something that I would have necessarily proposed if I were mayor. I inherited it, so as mayor I had the responsibility of addressing it, of dealing with it. The state and the federal government had already given the Senecas certain approvals, and short of that federal lawsuit being successful, they will build a casino. They have the permission from the federal government and the state to build a casino. I have never taken the position where I am for or against a casino. I’m not an opponent; I’m not a proponent. I’ve always said to people, this is something that is legal and I don’t try to tell adult people what they can and cannot do when something is legal.
“Asking the fox”
BJ: We just changed ground—you’re talking about gambling now. We’re not talking about gambling; we’re talking about the Buffalo casino. All my questions go to the impact of this on the City of Buffalo. I have none about the activity itself.
BB: And as Rich and Alisa have been trying to indicate, we’ve tried to address the impacts in this term sheet.
BJ: I’m really glad to see that. But who, other than the Senecas, have you put these questions to? I mean, to ask them is like asking the fox, “How do you want the hen house designed?”
BB: Well, not only are we asking them, we are saying that there are certain points in terms of hiring, in terms of things they have to do economically, in terms of marketing, in terms of not acquiring additional sovereign land in the city and taking additional land off the tax rolls…
BJ: Let me ask you about the legality of that: Can the city and the present Seneca leadership enter into an agreement that will bind both the city’s future government and the Seneca’s future government forever about something like that? Can you make future promises of that kind that are binding?
AL: The time period in which we defined the agreement, that it would remain in effect, is for the existence of the compact.
BJ: That’s just 10 more years, isn’t it?
AL: It will be around 17 years. They get another seven after that; there are exceptions, but their right to have a casino lapses then. And it’s for the existence of the casino that the agreement would be binding.
RT: We think it could be legally binding, if they would waive sovereign immunity to do so.
BJ: Which they have thus far refused to do.
RT: No, they said they would.
AL: On a limited basis.
BJ: They said they would, but that’s what I thought the breakdown was over. They wouldn’t put it in writing.
RT: In concept they said yes…
BJ: I’ve said a lot of things in concept in my life. “‘Will you love me forever?’ ‘Of course I will.’”
BB: But, Bruce, during the negotiations they say things. We know they’ve waived sovereign immunity to do financing; they wouldn’t have gotten a penny out of Wall Street if they hadn’t done so. So their nation has [been willing to waive sovereignty]. We told them that was an absolute requirement in these negotiations, that they must waive sovereign immunity with regards to the binding undertakings we are seeking.
“If Gambling Comes”
BJ: Have you read the transcript from that UB conference of about five years ago called “If Gambling Comes?”[http://urbandesignproject.ap.buffalo.edu/pub/pdf/fulltext_casino.pdf] They said, “If gambling comes, here’s the way it should be done.” And at that time, Tony Masiello was projecting 7,000 jobs for Buffalo. It was clear at the time that those numbers were pulled out of the air. As it seems the 1,000 jobs now is pulled out of the air. Maybe based on the SGC’s experience in Niagara Falls, 1,000 jobs is a reasonable estimation, but still it’s pulled out of the air. Has anybody done the kind of hard economic analysis a city would do if it were going to build a new road? Has there been the equivalent of an economic impact study done by Tony’s administration, or by yours, to give you something on which to base your discussions?
RT: The short answer is we have not. What we’ve done is, when they said 1,000 jobs, we said, “If you’re going to do 1,000 jobs, you have to commit to it, and if you don’t do it there are penalties.” These are not the types of jobs about which you do an economic study, these are not ripple-effect jobs, these are jobs within the casino that they would directly control. So, it’s in their power to either do it or not do it.
BJ: Has anybody looked at ripple-effect jobs? I’m trying to find out—and I don’t want to seem like I’m just asking the same question again—has anybody looked at anything or has everybody just said, “It’s coming, so let’s talk and see what we can get”?
BB: Well, we’ve said that it may be coming and it may not, if the federal lawsuit is successful. If the federal lawsuit is not successful, they have the permission to build a casino.
Power and impotence
BJ: Let me ask you about that. In the Peace Bridge affair, the Buffalo and Fort Erie Public Bridge Authority had the authority to build something and Tony Masiello refused to issue easements. So they couldn’t go ahead with construction, and that was one of the things that held it up until Gene Fahey’s decision came down, putting a total stop to it. Doesn’t City Hall have the power to refuse easements in this? Is there anything you can do other than ask? Do you have any power in this at all? The way you talk, Byron, it’s like the city is a total victim in this.
BB: No, no, not at all. We have power over the street, we have power over the air rights. So we’re not acting like total victims.
BJ: But that’s just the street. What about everything else? I mean, they still get to put in their casino.
AL: With respect to the basic services that any developer would be asking for, such as water, such as sewer service, those are things we would provide as a city because, to some extent, we are federally obligated to provide those and we would continue to provide those, as we would to any other customer. We are not going to withhold water. That’s not something we are in the business of doing.
BJ: What about widening the city street, say, to give access to customers to a casino? Are there any circumstances under which the City of Buffalo would say no?
BB: Oh yeah, we’ve definitely…
RT: We’ve said no. They have a whole series of improvements off grounds, off their land, that they’ve asked us to do as part of the negotiations. And we said we will not pay for it. Period. And that’s where the negotiations broke off. We don’t know what we’ll do in the future with those traffic impacts, but we’ve said we’re not doing them, we’re not paying for them and we don’t have to contemplate doing them in the future.
Doing it, paying for it, allowing it
BJ: I’m not asking, Rich, about paying for them. I’m asking about allowing them. Is there any circumstance under which the City of Buffalo would say, “No, we’re not going to widen the street for you. No, we’re not going to move people out of their houses. No, we’re not going to put up a traffic light.”
BB: We’ve already said no.
BJ: Not “We’re not going to pay for it.” We aren’t going to allow it.
BB: Well, no, if we’re not going to pay for it, we’re also not going to allow it.
BJ: What if they say, “We’ll pay for it. We’ll pay for it with the gambling money we have from Niagara Falls. We’ll pay for it, just let us do it.”
BB: If they would pay for improvements that would benefit their business and would also be good for the City of Buffalo, we would certainly consider that. But we would not consider improvements that were only good for the casino and not good for the streets and neighborhoods of Buffalo.
RT: There is no contemplation of our using our power to move people out of their homes or out of their businesses.
BJ: What do you say, Byron, when people like Herbert Hauptman [Nobel Prize laureate director of the Hauptman-Woodward Institute and part of a large group of business, religious and educational leaders that visited Mayor Brown recently to ask him to do whatever he could to block the casino] come in—and Herbert Hauptman runs an organization that employs a lot of people too, and the salaries of his employees do have a multiplier effect in the community—and they say, “This is bad for Buffalo.” What do you say to them?
BB: I say to them that the Senecas still have the federal and state permission, on the nine acres of land that they have purchased, to build a casino. And if they are successful in winning the federal lawsuit that has been filed to block it, they have every intention of building a casino on their nine acres of some size, some form, some shape. Now, the question would be: Would it be lawful, would we legally be able, to deny them water and sewer service? And our legal team, both in-house, our economic development people, as well as outside counsel, don’t believe it would be lawful for us to deny those basic services that go to their property.
BJ: And what about more extensive services like cutting curbs, traffic lights and air rights?
RT: Air rights we could clearly deny; that’s our choice. With regard to curb cuts, there’s a whole body of law. You can’t deny people access to the streets unless there’s really a safety issue. So, if you put a curb cut too close to an intersection, you can deny it, but you’ve got to find a reasonable accommodation if you can. So, somehow, some way, they’re going to get off their property and on to a public street, and we can’t deny that. Traffic lights and the other improvements, we will either make or not based on traffic in the area, public safety and that sort of stuff.
BJ: What, from your point of view, are the city’s bargaining strengths? What does Buffalo have to argue with? I wanted to know when I came in here what you thought we could get and you’ve said that you thought we were constrained by both the federal and state negotiations and decisions.
BB: Well, no, I said we were constrained in that Buffalo doesn’t make the decision whether to build a casino or not. But if you look at the term sheet and the things that we’ve asked for to be legally binding in writing, we believe that if we could get those things that it would provide additional protections to city residents; it would provide additional economic benefit to city residents; it would provide additional economic benefit to the City of Buffalo; it would help to better position Buffalo to grow, to market itself, to strengthen itself, to attract other businesses and to put its residents to work.
RT: We hired outside counsel to help with this; we hired Nixon Peabody. The reason we went to that firm, in part, was that they have an attorney named David Schraver who litigated a case before the US Supreme Court where he successfully beat the Cayuga nation of Indians on a land tax issue. He is a leading expert on Indian land law and he helped us a great deal in shaping our negotiating position and determining what powers the city might have. The City of Sherrill case was a very big deal, decided in 2005, and it said that the tribe is subject to a property tax on land that they’ve acquired but not made sovereign. He’s top-notch knowledgeable about this area of law and was available to us. He’s been part of our negotiating team. It made a big difference for us.
BJ: I knew he was part of your legal team, I didn’t know he was part of your negotiating team, too.
Tobe: Yes. He attended several of the sessions and we’d follow up with him after most of them. We’ve asked him to evaluate a lot of the things coming and going.
What now? And who cares?
BJ: So what’s going to happen now?
BB: Now, as far as we’re concerned, we have ended negotiations on the potential abandonment or sale of Fulton Street. And as far as we’re concerned, if the representatives of the Seneca Nation and Gaming Corporation come back to the city and say, “We are not willing to put those things that the city wants in to a written legally binding document,” we would consider our negotiations ended.
BJ: And if your negotiations are ended, other than Fulton Street, what difference does this make to anybody? They’ll go ahead and build the casino they want.
BB: It could make a very big difference because the item that we wanted—that they not buy additional sovereign land in the City of Buffalo and try to take additional land off the tax rolls and operate other businesses that don’t pay taxes in the city—is one people should be concerned about. Business people should be concerned about that. Another one of our points is that they reinvest in businesses in the city that would be tax-paying and tax-producing, and additional land that they purchased in the city for business purposes would be taxable land and tax-paying businesses.
BJ: But what if they continue to say, “No. Keep Fulton Street. We just won’t do any of that”? Where is Buffalo then?
RT: The outcome of the federal litigation will decide that question. We will reopen Fulton Street, we will reopen the sidewalks—their temporary closures end next week—and they will proceed without us.
BJ: Will you deny them air rights to put a footbridge over Fulton Street?
BB: We would have to evaluate that request when we get it. We would have to look at what the environmental impacts would be on the community, but we would not just automatically deny the air rights. We would have to assess the impact on the community.
Screwing Buffalo and the sovereign lawn
BJ: If Buffalo hangs tough right now, if we say, “We’re getting screwed. The city will get hurt if you don’t give us the stuff we asked for here,” and the Senecas say, “No, screw you,” do we have any recourse?
BB: We are absolutely going to hold firm. If we can’t get a written, legally binding document, we will not move forward. This has to be a good deal to the residents of the city that we can recommend, we have to have protections for residents of the city in this agreement, and then we would evaluate it. We would look at crime issues—city streets are all around this property. We would look at those who are coming in and out of this property to make sure that they are law-abiding citizens. We would make sure the area on the property was maintained properly or we could take additional legal action. Just because another nation owns it in the City of Buffalo doesn’t mean it can be unkempt. Well, it could be, but we would take legal action against that.
BJ: Oh, Byron, you couldn’t make them clean up their lawn! I mean, they couldn’t grow marijuana there, but they could do anything they want with their lawn.
BB: But that would give us cause for additional legal action, if the property wasn’t maintained.
RT: The law is mixed and the traditional tools we have are not available. But to the extent that they are doing impacts off their land, there is a possibility of a nuisance action. There are other things, but we don’t have the regulatory powers on their land that we would elsewhere.
BJ: The Senecas project about $160 million a year going through this casino and they say most of it is going to come from Buffalo and area residents.
BB: That was in the SEC filing.
BJ: Yes, the SEC file. And nothing they’ve said since has contradicted that.
If they have 1,000 employees making $25,000 a year, that’s $25 million. If they’re giving Buffalo $6 million a year, or even if they’re giving Buffalo $25 million a year, the entire assumed slot drop, that’s $50 million a year coming in on the city’s side. That adds up to over $100 million a year still leaving Buffalo or leaving Buffalo and environs. How can this not be a disaster for our economy, no matter what concessions you get?
Tobe: The premise of your comment—that they’ve done nothing to change the way they are marketing—is not entirely true. They told us verbally that they were going to change it, that they amended the 10K filing. The question is, how convincing is it?
BJ: Barry Snyder said that the 10K is just a piece of paper, that they can change it.
RT: That’s subject to SEC rules. The federal government could take legal action against them if it is knowingly false; they are not immune from that. It was amended, and they did say they were going to do more external marketing. But the numbers are still troubling. That’s what we were trying to get at in our negotiating position. We were asking them to show us some of that and then to make a commitment that funds would be here…the questions are: “What happens next? Does [the money] stay or does it go? How much of it will stay here to benefit the economy?”
We could not get good answers.
BJ: That’s a big question, isn’t it, Byron?
BB: It is a big question, which is why we have put in our document things that we feel would benefit the economy, would increase their commitment to marketing outside the region, would provide some resources for marketing the City of Buffalo, would require them to reinvest in the City of Buffalo. The term sheet speaks pretty strongly to additional things that would need to be done to benefit Buffalo economically and cause more revenue to stay and more revenue to come into Buffalo.
Why Buffalo didn’t join the federal lawsuit
BJ: The federal lawsuit, which you are not party to, is directed to whether or not the agencies that made this part of Buffalo sovereign land and then land in which gambling could occur acted improperly. It argues that they improperly interpreted the Seneca Settlement Act and the Indian Gaming Regulatory Act.
BJ: The lawsuit also says that the environmental studies that should have been done in connection with this determination were never done. Why isn’t the city a party to that suit?
BB: We are not a party to that suit because we felt that we added no additional strength to the suit—that the suit will stand on its merits.
We wanted to be in a position to negotiate an additional agreement beyond the compact that would improve this deal for the City of Buffalo—that might put us in a position where we could say this is a good deal for the city, and we have all of these additional protections for the city. In our term sheet there are 24 additional provisions that were not in the compact, and we felt if those items were agreed to in a written, legally binding document that that would add protection of the city.
I never took a position on the lawsuit and I never tried to prejudge how a lawsuit might come out…it might be successful, it might not be successful. If it is successful then this stops—it doesn’t go forward. If it is not successful it makes sense for the city to have open lines of communication, to try to negotiate a better deal and more protections for the people of Buffalo and Western New York. That is the course we decided to pursue.
“Never a cheerleader, never a fan”
BJ: Is there anything we haven’t talked about that you think we should have?
BB: Had I been the governor I never would have entered into this deal. If I was the governor and I wanted to bring gaming to New York, I would have done it the right way. I would have never done it this way.
As a state legislator I voted for it because the majority of my constituents, including my Niagara Falls constituents, were saying, “We want the casino”—and that was from phone calls, letters, emails, visits in the community. Were there many opposed? Absolutely. But were there more in favor that I had heard from? Absolutely. That is why I made the decision to vote for it, based on what I was hearing from people at the time. I didn’t feel comfortable with it, but that was why I voted for it. I was never a cheerleader, never a fan. If you look at the debate on the floor in the senate, I expressed some concerns.
After that I continued to express some concerns and qualified support. You know: “With these things in place I would support it, but absent these things being in place, no.” I’ve always said that…
So fast-forward. This administration isn’t cheerleading; we are simply doing things with this development that will not result in us being sued for withholding things that we should provide—you know, not doing anything additionally we shouldn’t do and not doing anything less then we should do, but saying to the Senecas at the very beginning, “I and this administration have a lot of conditions and we need these conditions in writing. It’s got to be a written, enforceable document.”
Strategically we staked out this position, and recognized there was a federal lawsuit, and made the strategic decision not to join the lawsuit, feeling like that could stand on its own merits without us. We didn’t add additional strength by joining the lawsuit, so we said if we can maintain open lines on communication, if we can continue to negotiate, maybe we can put ourselves in a position where maybe we could negotiate protections that don’t exist in this state compact and get what we consider a good deal.
We are seeing amazing economic development in the city. From 2001 to 2005 there’s generally $50 million of economic development activity annually in the City of Buffalo in terms of permits that people have applied for to do different projects and to do different work. In the seven months that we’ve been in office and the four or five months prior to that, all combined, we’re seeing over $700 million of economic activity in the City of Buffalo. So there are a tremendous number of projects moving forward and large amounts of interest within the city…[We] have been doing everything possible about red tape when it comes to business development to speed the process of doing business in the City of Buffalo.
Even now, when many people are saying, “Brown, you did the right thing trying to negotiate the casino, your administration is right not to take ultimatums, your administration is right trying to get some legal protections for this community,” there are others out there saying, “We can’t do anything right, we can’t do anything in Buffalo, woe is me, we’re so bad, nothing ever happens.”
We’re trying to say there are amazing things happening economically that we can better ourselves and build on. And we believe the proper way to build this economy is one project at a time, in a holistic way—not looking for silver bullets, not going to developers and CEOs, hat in hand, begging for them to do things in our community.
Bruce Jackson’s Artvoice articles on the Peace Bridge affair were collected in The Peace Bridge Chronicles (2003). He is SUNY Distinguished Professor and Samuel P. Capen Professor of American Culture at UB, vice president of the community advocacy organization Citizens for a Better Buffalo and editor of the Web journal BuffaloReport.com.
Seneca Buffalo Creek Casino
City of Buffalo
May 17, 2006
Economic Benefits to Buffalo and Western New York Economy
Economic Impact-The Seneca Nation of Indians and Seneca Gaming Corporation (“SNI/SGC”) must make a committed effort to maximize the positive impact the Casino will have on the local economy. In particular, the Casino must make a meaningful effort to attract out of area tourists to the Seneca Buffalo Creek Casino.
Reinvestment in WNY-The SNI/SGC must reinvest proceeds from gaming in the City of Buffalo (“COB”) and WNY in business enterprises that will benefit the entire community and that will make meaningful tax or payment in lieu of tax payments to the local community.
Other Factors of interest to the COB:
Size of local payroll and extent to which local residents are hired for jobs including management jobs,
Extent of M/WBE enterprises engaged in the construction and operation of the Casino and the extent of minority and women in the construction and operations workforces,
Amount of capital investment in the casino and its equipment,
Extent to which the Casino engages local providers of goods and services during construction and thereafter.
Operational Issues and
Relationship to the City of Buffalo
Designation of Host Community-Buffalo must be the host community as that term is defined in the Compact and state law.
Local Share- Buffalo must receive at a minimum 100% of the specified local share of gaming revenues that is collected by NYS. It is expected that the COB will seek a greater proportion of the revenues paid to the State of New York.
Host Community Benefit Agreement- SNI/SGC and the COB must enter into a binding Host Community Benefit Agreement that addresses the following matters:
Police services- by the Buffalo Police Department, including the terms for entry by the Buffalo Police onto the Casino site.
Tribal Police- defines the role, rights and limitations on tribal marshals off the casino site.
Fire services- by the Buffalo Fire Department including the terms for entry by the Buffalo Fire Department onto the Casino site.
Water service -by the Buffalo Water Board.
Sewer services -by the Buffalo Sewer Authority.
Refuse User Fee-The payment of the Refuse User Fee.
Adherence to Codes- Agreements regarding adherence to and enforcement of local, state and federal health and safety codes including building codes, noise ordinances, environmental and public health laws, fire codes, and criminal laws
Payment for Services- SNI/SGC will pay for services received from the COB and its related entities on a fair and equitable basis, generally to the same extent and under the same methods as businesses located in the COB. These services include, but are not limited to special traffic control services by the Buffalo Police, water, sewer and refuse services.
No Cost to Buffalo-The City of Buffalo will not be required to pay any costs associated with infrastructure improvements directly associated with the Casino.
Payment for Infrastructure- Should public infrastructure improvements be required, the funds shall be sought from New York State or other non-COB sources. Should funds from New York State or a similar non-COB source not be available, then the SNI/SGC shall make a contribution to the City to cover all such required public infrastructure expenses or shall build such infrastructure at its own cost in accordance with the COB’s construction standards.
City Streets-The City of Buffalo will not relinquish ownership of any City street to the SNI/SGC unless such street is required for the construction of the casino or related facilities. In such case, the COB and the SNI/SGC shall enter into a legally binding agreement that describes the development(s) that will occur, commits the SNI/SGC to making the improvements that are described in the agreement and compensates the City of Buffalo for the land provided to the SNI/SGC.
Public Utilities-The City will retain ownership of any public utility easements that run through the Casino site and will retain the right of access at reasonable times and with adequate notice to perform needed repairs and maintenance to any such public utilities.
Air Rights-If Fulton Street is not transferred to SNI/SGC, the City of Buffalo will consider granting the use of air rights over Fulton Street upon approval of the proposed use and how it would impact the functioning of the street.
Environmental Reviews- The SNI/SGC will voluntarily cooperate in the preparation of any environmental reviews or reports that the COB is required to undertake. This includes, but is not limited to, compliance with the New York State Environmental Quality Review Act (“SEQRA”). It is assumed that the COB will be the lead agency and will be required to provide one or more consents that will qualify as “actions” under SEQRA. The SNI/SGC will be expected to cooperate in the SEQRA process in the same manner as is expected of developers who seek permission(s) to proceed from the COB by providing data and reports that are needed to properly assess environmental impacts and shall make a legally binding written commitment to carry out all environmental protection and mitigation actions.
M/WBE and Workforce Participation-The COB enter into a binding Agreement with the SNI/SGC that provides for hiring of local residents and minorities and M/WBE for construction jobs and for permanent employment at the Casino and related projects and for the provision of goods and services both during construction and thereafter. Should it be necessary, the Seneca Buffalo Creek Casino Corporation will use the services of local and state workforce training and job placement agencies and shall provide training, job readiness skills and scholarships to local residents to prepare them for positions including management positions and for meaningful promotions at the Casino and related projects. Periodic reports shall be provided to the COB.
It will be required that 50% of the construction workers and 50% of the employees are from Buffalo,
It will be required that 33% of the construction and permanent workforces are minorities,
It will be required that 33% of the companies engaged for construction and to provide services on a permanent basis are minority and/or women owned with 25% minority and 8% women owned.
Marketing Efforts-COB enter into a binding Agreement with the SNI/SGC that provides for a specified amount of money to be spent by the SNI/SGC each year on marketing the Buffalo Creek Casino to out of area markets. This marketing must include the marketing of other cultural and tourism related attractions in the Buffalo area. There shall be an annual report on the marketing campaign including previews of planned content in advance coordinated with the Buffalo Convention and Visitors Bureau and a statement that verifies that the money was spent, how it was used and the impacts from the marketing campaign.
Future Plans of the SNI/SGC
Buffalo enter into a binding Agreement with the SNI/SGC that requires the consent of the City of Buffalo before any additions can be made to the sovereign land of the Seneca Nation of Indians in the City of Buffalo.
The Seneca Nation of Indians through its Tribal Council will resolve the issue of plans to expand its tribal holdings in the City of Buffalo by limiting its plans to the 9-acre site that has now been acquired.
Issue Navigation> Issue Index > v5n32: Byron Brown on the Casino Deal (8/10/06) > The Negotiations End
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