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For almost three years, the rusting steel framework off Michigan Avenue has stood as evidence of the Seneca Nation's inability to get a new casino built in downtown Buffalo.

But leaders of the Indian nation remain determined to build a gambling hall on the site, Seneca President Robert Odawi Porter said Tuesday.

Porter said the Senecas are working on a new design for the facility, and he told The Buffalo News he hopes that ground can be broken next spring.

"I'm very confident," Porter said after a news conference announcing the Senecas' plan to establish a $1 million fund to finance community beautification projects in the neighborhoods surrounding the small Buffalo Creek Casino next to the rusting framework.

"We made a promise to this community to build a casino, and that was not a promise to build a temporary casino. It's going to happen," Porter said. "We're putting $1 million on the table because we believe it will happen."

If it is built, the casino could have an accompanying hotel, Porter said, and the project would probably be scaled back from the $333 million casino-hotel project that was envisioned by the Senecas four years ago.

Currently the Senecas operate a small slot machine-only facility in Buffalo Creek Casino, a blue corrugated metal building that Porter said the Senecas consider temporary.

"The new plan that we're working on would be larger than what we have now, but smaller than what we had proposed [in 2007]," Porter said. "Whether it would have a hotel included is yet to be determined. We'd certainly be open to working in cooperation with any other developer who would like to build the hotel."

The Senecas' plans face a major challenge, however. A lawsuit filed by casino opponents has been in federal court since 2006 before U.S. District Judge William M. Skretny.

"I'm optimistic that we're going to be successful at federal court, and I would like to see us break ground for a new casino no later than next spring," Porter said.

Casino opponents contend that the federal government illegally gave the Senecas permission to build the downtown Buffalo casino. They also allege that the casino would cause a huge increase in gambling addiction locally, especially in the neighborhoods around the casino.

"The lawsuit is ongoing, and I don't know how [Porter] can express optimism about it," said Buffalo attorney Dianne Bennett, president of Citizens for a Better Buffalo, a group that opposes casino gambling. "We think the Senecas are operating there illegally."

Sources familiar with the Seneca plans say the rusted steel girders now standing at the site would probably be torn down and not incorporated into the updated version of a Buffalo casino.

At one time, the Senecas were proposing a casino development that would have been connected to a 22-story luxury hotel.

In July 2007, the Indian nation opened the Buffalo Creek facility, which remains open despite repeated efforts from gambling opponents to convince Skretny to shut it down.

The Senecas started work on the $333 million project for a permanent casino in 2008 but abruptly halted that work in August 2008, after voicing concerns about the lawsuit and financial issues.

Porter was joined on the podium at Tuesday's news conference by Mayor Byron W. Brown and officials of the Seneca Gaming Commission.

The Senecas announced that they are setting aside $1 million to fund projects that would "boost infrastructure, landscaping, lighting and other amenities" in neighborhoods near the casino.

"We are committed to being good neighbors and changing the perception of our casino as an island that does not fully benefit those interests around it," Porter said.

Bennett was skeptical of the Senecas' new development fund.

"I think they're just buying friends," she said. "We think they should contribute money to the community, whether they are running a casino or not. For them to give something back to the community is more than long overdue. They're taking a lot more money out of the community than they're ever going to put in."

The Senecas have been meeting for months with city planners, waterfront development officials and community groups to discuss ways the Senecas can work with them to develop the area surrounding the casino. Brown said he is "very impressed" with those efforts.

"The Seneca Nation wants to be a good neighbor and wants to be helpful in building up the city," Brown said. "I'm hoping to see them complete the permanent casino and to begin marketing it to people outside the city."

e-mail: dherbeck@buffnews.com