(Source: By Charlie Specht, The Buffalo News, N.Y. (MCT) – First of two parts
State leaders wagered a decade ago that allowing a Seneca casino on prime property in downtown Niagara Falls would help pull the city from generations of decline.
Lately, though, the bet hasn’t exactly been paying off.
The Seneca Nation of Indians, saying New York State has violated their casino agreement, over the past three years has withheld more than $58 million in payments owed Niagara Falls – not a small sum for a city that expects to raise just $28 million in total property taxes this year.
Sure, the city looked great during Nik Wallenda’s high-wire walk across the cataracts. But as one observer put it, the community was “choking to death” behind the scenes.
The symptoms are no longer hidden.
Vacant houses in the heart of the city crumble – there’s no money to raze them.
Urban prairies pop up on other streets – underfunded blight-clearing crews are 800 properties behind.
New police cars and a fire engine? Those orders have been put on hold.
The $20 million stowed away for tourism and emergencies has dwindled to zero.
And one month after Wallenda made history, the county’s tourism bureau has little money to market the destination.
Capitalizing on the event would be great – but the city’s focus is on keeping its financial head above water.
“It’s kind of like somebody waited long and hard to pull themselves up in life, and they can finally afford things they’ve needed, and all of a sudden that income is lost,” said Mayor Paul A. Dyster.
The Senecas are withholding the money even though the city continues to provide police and fire protection as well as general street maintenance and other services for the casino.
Niagara Falls isn’t the only place affected by the dispute between the Senecas and the state, in which the Indian nation argues New York has violated the terms of the agreement by enacting “racinos” in Batavia and Hamburg.
Salamanca laid off 49 employees two years ago when the Seneca Council first voted to withhold slot payments from its Seneca Allegany Casino in Cattaraugus County. The terminations came as the city was owed about $3 million in revenues – nearly half its budget. It also laid off half of its police force.
The amount owed to Salamanca has climbed to nearly $24 million, and the city has delivered minimal services, adopted two straight austerity budgets and accepted $5 million in loans from the state.
“If New York State wouldn’t have [given us loans] two years in a row, the city wouldn’t be there,” Salamanca Mayor Jeffrey Pond said. “We’re in a no-win situation.”
Buffalo is also owed nearly $10 million from the Senecas from the Seneca Buffalo Creek casino in downtown Buffalo. That figure would presumably grow if a plan to expand the Fulton Street casino is completed next year.
Niagara Falls, though, is owed the largest amount – more than $58 million. Some say it is a city that, after decades of declining tax revenue and short-sighted development decisions, can least afford to go without the money.
In recent years, the city had saved $20 million for special development projects and for emergencies. When the casino money stopped three years ago, the city used those funds to pave roads, pay economic development workers and make debt payments on its police station.
“Everyone said, ‘Well, we don’t have [the casino money], but we’ll be getting it anytime now,’?” said Controller Maria C. Brown.
That day hasn’t come, though, and now those savings are gone.
When asked at a recent City Council meeting how they were paying the salaries of the economic development department without the casino money, city officials had no clear answer. And while Dyster is hesitant to talk about layoffs, he and Brown said the city will have to find a way in the coming year to make payroll for a handful of workers whose salaries are paid by the casino.
“We, right now, have a real issue,” Brown said. “By the end of the year, we could have a crisis.”
That scenario is already evident among the scores of vacant, crumbling and boarded-up houses spread throughout the poorest neighborhoods of the city, where workers had been steadily demolishing between 50 and 70 houses per year.
Without the casino funds, that number has dropped to 12, Code Enforcement Director Dennis F. Virtuoso told the City Council recently.
“It really hurts us,” Virtuoso said. “We were really moving along very well.”
In many cases, one bad house can ruin an otherwise decent street, downtown block club leader Norma Higgs said.
“This used to be a nice neighborhood,” she said, pointing to areas with 4-foot-tall grass and to homes the city would have knocked down with the casino funds. “These homes are just falling apart.”
“I’m upset over it, but what can you do?” Higgs asked. “We’re stuck in the middle. You can’t say [city crews] are not trying – they’re overwhelmed.”
Because many blighted properties are owned by out-of-town landlords who do not maintain them, city crews clean the properties and bill the landlords later. Those crews – funded by casino money – have been sliced in half.
Niagara Falls is home to what Dyster has called “the worst street in Western New York,” and the city previously also used the Seneca casino funds to pave its pothole-ridden roads. But where the city has paved nearly 40 streets in recent years, it will pave 18 this year, and only one of those is a major roadway.
“This has affected me big-time,” Public Works Director David L. Kinney said. “Streets that [were] going to be paved aren’t being paved. The neighborhoods, in a lot of areas, are just going down.”
The dispute has also cut into public safety funding, as the police department had to put on hold an order for eight police cars. Likewise, the fire department will have to wait to replace its main tanker truck. Most significantly, the city is unsure how it will make debt payments next year on its new police station.
“We have a lot of things we could have gotten with those funds, and now it’s like, ‘What do you do?’?” said Fire Chief Thomas Colangelo. “Those big-ticket items are really hard.”
Police Capt. John DeMarco hopes the situation doesn’t grow to mirror the fiscal crisis of the early 2000s, when the city faced bankruptcy and Mayor Irene J. Elia proposed a 27 percent property tax increase to offset population loss.
“Our fleet was in really deplorable condition,” DeMarco said.
“The city gradually, over time, became more and more of a wasteland,” former city historian Paul Gromosiak added. “The money from the casino helped save the Falls from becoming a total disaster.”
The county’s tourism bureau, funded in part by casino revenues, has laid off a quarter of its staff and sliced its marketing dollars in half just as it tries to capitalize on the Wallenda walk.
The state and the Senecas say their aim is to resolve the dispute as soon as possible.
But in the Cataract City, a resolution can’t come soon enough.
“What’s going to happen to us?” Higgs asked. “We’ve depended on that money.”
Monday: How did the city get stuck in the middle?
cspecht@buffnews.com
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©2012 The Buffalo News (Buffalo, N.Y.)
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