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NY cities learn hard way on Indian casinos
The tribe has given away millions of dollars'
worth of gifts to
educational, civic and charitable organizations, and it offers "silver
covenant" gifts of cash to local governments it considers friendly. But relations between the tribes and the local governments are so bad that only Verona, the casino's host town, and one or two other towns accept the grants. "Silver handcuffs," David O. Barker, the city manager in Sherrill, calls them. Upstaters learn hard way on Indian casinos Now, officials here advise others on what not to do in Indian casino dealings. August 09, 2003 Staff and wire reports For all of the town and county governments hoping that a new Indian casino will solve their unemployment and tax problems, officials in Madison and Oneida counties have a few words of advice: Don't do it the way we did. New York state got its first Indian gambling hall, the Turning Stone Casino, in Oneida County just 10 years ago this summer, and for all its wealth and success, the booming resort has come to stand as a textbook example of how not to work with sovereign tribes when it comes to gambling, local officials say. The Oneida Indian Nation of New York got state approval to open Turning Stone without agreeing to share its revenue with state and local governments, or to pay for improvements on non-Indian lands affected by casino traffic, or to comply with local environmental regulations or even to make its books open to the public. Most important to local governments, the nation was not pushed to settle its 250,000-acre land claim as a price for going into the gambling business; the claim has been upheld in federal courts. All of those concessions are now part of the legal playbook for any county lawyer or state regulator working with tribes across the country these days. The Pataki administration said this year that it would not grant permits for new casinos, or renegotiate old ones, without first settling legal issues such as land claims. But a decade ago, state and local officials had no experience with Indian gambling. Gov. Mario M. Cuomo was opposed to gambling and to milking casinos for state dollars. And the Oneidas had a legal advantage in operating from their own land, 30 miles east of Syracuse. So the tribe got a free hand to develop its casino with hardly any need to satisfy outside interests. The counties and towns around Turning Stone have certainly benefited from the 2,700 jobs at the casino, with the promise of more as it expands. But they have also had to pay for the added traffic and services for the 4.2 million people who visit each year, they say, while increasing taxes to make up for revenue lost when businesses and land bought up with casino dollars are added to the reservation and taken off the tax rolls. The costs are steep for a rural area that has already lost Griffiss Air Force Base in Rome and many manufacturing and farming jobs. And they feed a festering ill will against the Indians among people whose families have lived here for generations. "The issue of sovereignty has caused conflict between the Oneida and non-Oneida communities, and we strongly feel that the federal government must take an active role in resolving such issues," said Mikale Billard, policy research analyst for Oneida County. "In the absence of a clear definition of sovereignty, we have always taken the position that in order to move forward as a community, we must seek a negotiated settlement to the land claim." "We are constantly sharing our experiences, both positive and negative with communities around the country," Billard added. "The idea is to exchange best practices for forging a relationship with tribal governments." Ray Halbritter, the Oneida Nation's leader, is unsympathetic. "They say, 'Why don't the Indians pay their fair share?' " he said. "Well, the Indians have paid a lot already in the land they lost." The Oneidas said they needed the casino to overcome generations of poverty and neglect for the remnant of a native people whose vast Upstate land holdings had shrunk to 32 acres here in Central New York. The Oneida Indians saw further into the future than others here, and over a decade, they poured their profits back into their business. Turning Stone Casino Resort today is as loud and gorgeously gaudy as any casino, with thousands of square feet of gambling space, several golf courses, hotels, shops and a music hall. From fiscal year Oct. 1, 2001, to Sept. 29, 2002, according to a bond prospectus circulated by the nation, the complex took in $232 million for the tribe's 1,000 members. With casino profits, the Oneida Nation has bought 16,000 acres in numerous parcels in Oneida and Madison counties, including 12 of 20 surviving gas stations in the land claim area, Billard said. Owners of non-Indian shops say they have been put out of business by the low prices of Oneida-owned stores. The Indians undersell non-Oneida owned stores by pocketing the sales and excise taxes. The tribe has given away millions of dollars' worth of gifts to educational, civic and charitable organizations, and it offers "silver covenant" gifts of cash to local governments it considers friendly. But relations between the tribes and the local governments are so bad that only Verona, the casino's host town, and one or two other towns accept the grants. "Silver handcuffs," David O. Barker, the city manager in Sherrill, calls them. Contrast that with the experience of Connecticut, where the two immense Indian casinos, Foxwoods and Mohegan Sun, pour a total of $370 million a year into state and local government accounts, under revenue-sharing agreements reached before the casinos opened. Or with the careful preparation of Sullivan County whose lawyer has negotiated agreements with two of the three tribes looking to develop the three casinos that the state has authorized for the Catskills. "As much as we think a world-class casino in Sullivan can be good for the economy, we also knew that there would be a lot of negative impacts in terms of traffic and roads and schools that come along with them," said the county lawyer, Ira J. Cohen. Cohen's agreements cover everything from the casino payouts to the county - at least $15 million a year for each casino - to the way the casinos can structure their free-gas coupons to clients. If the coupons are honored at Indian-owned gas stations, they must be honored at other gas stations as well. The bitterness felt in Oneida County will probably only grow sharper now that towns have started raising taxes to make up for revenues lost on properties and businesses bought by the Oneidas, town managers say. Sherrill traces the increase in the local tax rate, from $5 per $1,000 valuation in 1998 to $6.25 today, to the loss of some $110,000 in property and sales taxes from businesses bought by the Oneidas. Sherrill's lawsuit to tax Indian property was rejected, in a 2-1 decision, in the 2nd U.S. Circuit Court of Appeals July 21. The city plans to ask for a rehearing. "I mean, they've got a casino for forever under the compact," said Billard, the county research analyst." And there is no ability to go back and make any changes." Halbritter pointed out what everyone around here keenly recognizes: The Oneidas have won nearly every lawsuit aimed at taxing or limiting them. Other governments around the country have learned the lessons of Oneida County and its towns: that the time to extract concessions from tribes is before the casino opens, when local concerns and objections can still influence state and federal licensing decisions. The pursuit of Indian gambling revenues is so intense that in congressional testimony, Jacob Viarrial, governor of the Pueblo of Pojoaque in New Mexico, complained last fall that negotiations for gambling compacts had "become an excuse for extortion." Cuomo rejected the pursuit of Indian gambling revenues back in 1993. In an interview in July, he said he was reluctant to talk about the land claims because he was still named by tribes in several lawsuits, but added that he opposed fattening state treasuries with gambling dollars. "I wouldn't have tried to get cute about making deals because, even if I could cajole them into it, I didn't like what it represented as precedent," said Cuomo, who now practices law in Manhattan. "What I said was, 'It's not good governance and it's not a good way to run a good economy.' " He pointed out that in exchange for state approval of Turning Stone, he required that state gambling regulators and the state police oversee the casino. Gov. George E. Pataki has embraced the use of Indian gambling revenue and has bargained hard for millions of dollars in revenue-sharing and other concessions. He also forced the St. Regis Mohawks to agree to settle their land claim before he would let them add slot machines to their casino in Hogansburg, near the Canadian border. The Oneidas are interested in operating one of the three Catskills casinos, but would also have to settle their claims first, state officials have said. This article was reported by The New York Times and Post-Standard staff writers Glenn Coin and Carrie A. Liberante. http://www.syracuse.com/news/poststandard/index.ssf?/base/news-4/1060418203129850.xml |
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