In conjunction with the signing of the agreement, Spitzer sent a "concurrence letter," to US Interior Secretary Dirk Kempthorne. The letter is a formal notice indicating that use of the property for casino purposes is in the best interest of the tribe and surrounding community, state officials say. Now all that stands in the way of groundbreaking is final approval from the Interior Department's Bureau of Indian Affairs and a federal lawsuit filed on Feb. 13 by local community and environmental groups.

"This agreement creates an economic partnership between the Mohawks and the people of New York," Spitzer said. "By working together, we can establish a premier gaming facility that will produce significant revenues for the tribe and the state, and help spark a resurgence of the Catskills region."

Under the compact, the state will receive 20% of revenues from slot machines for the first two years, 23% for the next two years and 25% thereafter. In addition, the St. Regis Mohawks have agreed to comply with applicable tax, labor and health laws in connection with the project. The governor and the tribal chiefs are urging the Department of the Interior to move quickly to take the raceway into trust.

The Bureau of Indian Affairs deemed the environmental review undertaken for the St. Regis Mohawk Tribe's casino at Monticello Raceway as sufficient in December. With all approvals in New York State in hand, the changing regulatory winds in Washington, DC could be problematic as the project enters its final stage of the regulatory process.

Deputy Associate Interior Secretary James E. Cason, in a Dec. 21 letter to the tribe detailing the "Finding of No Significant Impact" designation, stated, "The present action is narrow in scope and should not be regarded as suggesting a future commitment to take the subject land into trust or to approve a compact to conduct gaming on that property pursuant to Section 20 of the Indian Gaming Regulatory Act." Cason in his letter noted that the statutory, regulatory and policy environment is changing with regard to Section 20 gaming applications and specifically "off-reservation gaming."

"We share the concerns that many have expressed with off-reservation gaming and so-called reservation shopping," he stated. "The department will be reviewing the regulations that govern the processing of fee-into-trust applications. We anticipate changes to the rules that may result in fewer off-reservation properties being accepted into trust."

The St. Regis Mohawk Tribe already has an existing reservation of almost 15,000 acres of land in Upstate New York, which is held in restricted fee status, according to the Department of the Interior. The tribe has proposed that the US take another 29.31 acres of land into trust for its casino project by Monticello Raceway. The proposed Monticello casino project would involve construction of a 766,000-sf two-story casino and entertainment complex featuring approximately 125 table games, 3,500 slot machines, 24 poker tables, and numerous restaurant and retail venues.

Days before Spitzer's announcement, the expected litigation seeking to block the development was filed in US District Court in Manhattan. A coalition of community and conservation groups, including the National Defense Council, Orange Environment and the Sullivan County Farm Bureau, filed suit on Feb. 13 in federal court challenging the Bureau of Indian Affairs' approval of the environmental assessment of the venture.

The groups stated in an announcement that they "are asking a judge to stop development plans from moving forward until full measure can be taken of the impact on nearby communities and their environment." The case is expected to be heard in federal court in White Plains.

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