Judge rules against Seneca casinos on land in downtown Buffalo
Rejects both temporaryand permanent locations
The Seneca Nation of Indians on Tuesday lost the first round of a $333 million bet.
Senecas wagered the cost of a new casino in Buffalo that a 1990 act of Congress, which repaid them for 100 years of cheap leases on their land in Salamanca, would allow them to run a casino in Buffalo.
A federal judge said they were wrong.
U. S. District Judge William M. Skretny revoked the Senecas’ authority for a temporary casino on a nine-acre plot of land the Senecas recently purchased on Michigan Avenue.
Skretny called a federal agency’s July 2007 decision to allow gambling “arbitrary, capricious and not in accordance with the law.”
The Senecas bought that land on Michigan Avenue with money from the Salamanca settlement. But the Seneca Nation Settlement Act of 1990 did not give the Senecas the legal authority to operate a casino in Buffalo, Skretny said.
The decision is likely to be appealed. Both defendants — the U.S. Justice Department and the National Indian Gaming Commission — said they were still studying the 127-page ruling.
Skretny’s ruling surprised the Senecas to the point that they canceled a news conference at the temporary Buffalo Creek Casino, where they had intended to discuss the ruling.
Cornelius D. Murray, the Albany lawyer who represents Citizens for a Better Buffalo, which brought the suit, called on the National Indian Gaming Commission to immediately shut down the temporary casino.
“The Seneca Nation has always said it follows the law,” Murray said. “I assume they will follow a federal court’s ruling.”
But Barry E. Snyder Sr., chairman of Seneca Gaming Corp., said the Senecas will keep the casino open.
“The temporary Seneca Buffalo Creek Casino will continue to operate as usual,” Snyder said in a statement released by the corporation, “while the Seneca Nation of Indians confers with the United States government as to the effects of today’s decision.”
The Senecas are not part of the lawsuit, but were allowed to enter it by Skretny as a friend of the court.
Seneca Nation President Maurice L. John Sr. issued a statement that made it sound as if the Senecas had won.
John seized on that part of the ruling in which Skretny said the Buffalo Creek Casino is legally Indian country.
“Today’s decision strongly affirmed what the Seneca Nation has always maintained,” John said in a statement, “namely, that the Buffalo Creek Territory lands are the sovereign lands of the Nation, reacquired through the process set forth in the 1990 Settlement Act.”
But opponents say that unless the Justice Department and the National Indian Gaming Commission get Skretny’s ruling overturned in a higher court, the land may be sovereign but the Senecas have no authority to gamble on it.
“As of today, ´ said Richard J. Lippes, one of the attorneys who brought the suit, “if they continue to gamble, they’re gambling illegally
“We don’t believe they can continue to gamble even if an appeal is pending. Nothing in this decision stops the Senecas from building anything they want on this land. They can build a hotel, they can even build a casino — they just can’t gamble in it.”
Joel S. Rose, a lead plaintiff and co-chairman of Citizens Against Casino Gambling in Erie County, was pleased by Tuesday’s ruling, but acknowledged that it is just one step in a long fight.
“Today’s victory in the Buffalo Federal District Court is the culmination of seven years of hard work on the part of many people who refused to stand idly by while a group of snake oil salesmen tried to sell our city down the river,” Rose said.
“We did not know when we started this effort how we were ever going to stop a casino backed by so much money and political muscle. We knew only that we had to try.”
Thomas D. Lunt, a trustee with the Margaret L. Wendt Foundation, the major financial backer in the suit, said the legal costs are nearing $2 million.
“We had the uphill climb, and we climbed the mountain,” Lunt said. “Now they’ve got the uphill climb. We have to wait and see what they do.”
Buffalo Mayor Byron W. Brown declined to comment on the ruling but again stressed his support for the casino.
“The proposed Seneca Buffalo Creek Casino remains the largest private development project in the history of the city,” Brown said in a statement. “It is expected that more than 1,000 people will be employed upon the project’s completion, including approximately 50 percent of city residents earning an estimated average salary of $35,000 per year.”
Brown also pointed to the $5 million to $7 million the casino is expected to pay in slot revenues, although Erie County Executive Chris Collins has made a claim for some of that annual payout.
The opponents have countered that a Buffalo casino would cause problems in an economically depressed city and draw residents away from existing hotels and restaurants.
While the suit was argued, the Senecas continued construction of a permanent casino.
Plans call for a 22-story, 206-suite hotel tower to complement a 90,000-square-foot casino, with 2,000 slot machines and about 45 table games. The complex would also house four restaurants and a spa and have a 2,500-vehicle parking deck.
Murray, the lead attorney who took over the case put together by Joseph M. Finnerty, had warned the Senecas that they were taking a risk in building a casino that may never open. Skretny’s ruling agreed with the plaintiffs’ argument.
The 1990 congressional act that paid the Senecas’ $65 million for the Salamanca leases did not grant them authority to operate a casino on land in Buffalo. The Senecas bought the land with money from the Salamanca settlement.
Skretny said the hasty decision by Philip N. Hogan, chairman of the National Indian Gaming Commission, reached in a matter of days in July 2007, did not even get the name of the congressional act right. Hogan called the act “The Seneca (New York) Land Claims Settlement,” Skretny wrote.
That was wrong, the judge said. It was only the shorthand name for it in the U. S. Code.
“Congress gave the act the short title, ‘Seneca Nation Settlement Act of 1990,’ ” he said. “Congress did not include the term ‘claim,’ much less ‘land claim’ in the [act’s] long or short titles.”
In other words, Skretny said, it was not a land claim act, one of the few exceptions to the law that allows Indian casinos to be opened off reservations.
That was the argument by John J. LaFalce, a former Democratic congressman from the Town of Tonawanda, who along with Amo Houghton, former Republican congressman from the Southern Tier, sponsored the act that paid the Senecas.
“They were attempting to violate the law by misinterpreting the law,” LaFalce said. “What the Senecas were attempting to do is violate the integrity of the law by concocting an argument 12 years after the fact.”
LaFalce, an opponent of gambling, said he would have never sponsored a law that could be used to open a casino.
“I think Judge Skretny wrote a brilliant decision, very well documented,” LaFalce said. “I don’t know what’s going to happen if the defendants appeal, but I suspect the judge’s opinion will be upheld.”
The nation and its gambling arm have invested nearly $27 million to date on land acquisition, planning and construction of a Buffalo venue. More than $10 million of that went into the original construction, and then expansion, of the temporary slots-only casino that opened last July.
In documents filed with the federal Securities and Exchange Commission, the Senecas estimated an additional $10.8 million for site preparation and construction of the permanent casino through the end of March.
Other major expenditures include: $2.7 million for acquisition of the properties along Michigan Avenue that compose the nine-acre sovereign territory, plus $631,000 to buy a one-block section of Fulton Street from the city. The street formerly bisected the casino site.
The gambling corporation has also acquired three other nearby properties, spending an additional $1.7 million.
The temporary casino, which opened with 109 slot machines a year ago, was expanded to accommodate 244 machines. In its first six months of operations, it generated more than $12 million in revenue.
In June 2006, the Senecas unveiled designs for a $125 million permanent casino, then upped the ante in October 2007 with blueprints for a $333 million casino complex. It is billed as the largest privately funded construction project in Buffalo’s history.
News Staff Reporter Sharon Linstedt contributed to this report.
mbeebe@buffnews.com and jrey@buffnews.com
