Casino Talks Suffer 'Major Setback'

The cessation of talks puts into question not only when the venture might get started, but if it will ever be built at all.

Almost two months ago, New York State and the Cayuga Nation of New York signed an MOU to settle a long-standing land claim dispute and agree on terms that would allow the tribe to build a $700 million casino at Monticello Raceway in Sullivan County.

Casino proponents in Sullivan County were heartened by the news. In fact, a chief executive with Empire Resorts, the developer of the project, said that construction could start by this fall on the development.

A spokesman for Governor Pataki, says, "The talks have ended and it is the state's intent to see the case through to its conclusion in the courts." He notes that Governor Pataki "wants to see casinos up and running in the Catskills."

He says that the state proposed a comprehensive settlement agreement with all the parties in the dispute, including affected counties and the Seneca-Cayuga Tribe of Oklahoma, which is an intervener in the ongoing litigation between the state and the Cayuga Nation of New York that is now before the US Court of Appeals for the Second Circuit.

Martin Gold, a partner in the law firm Sonnenschein, Nath & Rosenthal, who is representing the Cayuga Nation, had a much different view on the breakdown of talks. "The Cayugas were perfectly happy to proceed with the terms of the Memorandum of Understanding." However, he charges that the state "abandoned" the MOU and included provisions that the Cayuga Nation could not accept. "The settlement agreement was completely different than the terms we had approved," he says. Gold adds that Governor Pataki simply "walked away from the MOU."

He asserts that the proposed comprehensive agreement would have allowed the state to continue to pursue appeals of a court decision rendered in October 2001 that called for the state to pay the Cayugas $247.9 million in damages in relation to its land claims with the state. In the MOU, the state proposed to pay the tribe the $247.9 million in 14 annual payments beginning in January 2007. The state is currently appealing that decision with the US Court of Appeals for the Second Circuit. New York. State officials say the appeals court will also eventually rule on a cross appeal filed by the Cayuga Nation seeking $1.7 billion in damages from the state.

Gold also says that the Cayuga Nation will not agree to any award of sovereign land in the state to the Seneca-Cayuga Tribe of Oklahoma, which was also a part of the state's proposed land claim settlement agreement.

Henry Bunce, president of the Catskill Casino Coalition, a business-construction trades group that advocates casino gaming in the Catskills, terms the breakdown "as a major setback."

"Every time someone gets excited and starts talking about taking a shovel to the ground on a casino here, someone breaks the shovel," he says.

This is the second time that an MOU between the state and an Indian tribe proposing a gaming facility in the Catskills has fallen apart. Two years ago, the St. Regis Mohawks and the state agreed on land-claim issues. The tribe has proposed to build a $500 million casino at the Kutsher's Sports Academy in Thompson in Sullivan County. However, after a change in tribal leadership, the tribe rejected the terms of the MOU. In this case, according to Pataki's spokesman, negotiations on a new land claim settlement are ongoing and that some progress has been made.