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ALBANY-New York State and the St. Regis Mohawk Tribe have reached a tentative agreement that includes a provision for the state to approve a compact that would allow the tribe and Park Place Entertainment to build a $500 million Indian-run casino at the Kutsher’s resort in the Catskills.

While there are still regulatory and legal hurdles to overcome before actual construction can begin, casino proponents hailed the tentative deal reached on Monday.

Governor George Pataki and leaders of the St. Regis Mohawk Tribe signed the Memorandum of Understanding at the State Capitol in Albany.

State officials described the deal, worth more than $100 million to the St. Regis Mohawks, as a framework for an agreement between the state and the tribe to settle a long-running land claim and approve a gaming facility that the St. Regis Mohawks plan to develop in partnership with Park Place Entertainment in Sullivan County.

While the agreement is scheduled for a ratification vote by the members of the tribe in the near future, components of the accord will have to be approved by federal agencies, the State Legislature and Congress.

Commenting on the deal reached with the St. Regis Mohawks, Pataki says, “Today’s conceptual agreement represents a tremendous step forward, not just to settle the Mohawk Indian land claim, but also to establish a level playing-field between Indian and non-Indian retailers – through price parity — and to develop a Class III gaming facility in the Catskills. We are committed to working together with the Mohawk Tribe to obtain all of the necessary approvals to implement this agreement.”

Chief Alma Ransom of the St. Regis Mohawk Tribe says, “I am proud that this Memorandum of Understanding has been achieved by government-to-government negotiations. As an Indian person I have lost faith in the judiciary’s ability to uphold our rights. In court there are winners and losers. Unfortunately, Indians have been losers more often than not in that forum. Through effective negotiations we have reached agreements that both the Tribal Council and the state can stand behind.”

The St. Regis Mohawk/Park Place casino development at Kutsher’s is one of three proposed casino ventures in the Catskills at the moment. The others are a $600 million venture by the Stockbridge Munsee Band of Mohicans and Trading Cove Associates to be built on vacant land near Exit 107 of Route 17 in Sullivan County and a $500 million proposal to be built by the Cayuga Nation and an affiliate of Alpha Hospitality at Monticello Raceway.

While all three projects must obtain final approval from the Bureau of Indian Affairs and New York State among others, litigation, including a suit claiming the state’s gaming law that allows for Indian casino gaming is unconstitutional, is expected to hold up development, at least for the short term.

Some of the major terms of the agreement between the St. Regis Mohawks and New York State include:

• A provision to have the state and the tribe execute a gaming compact on the casino in the Catskills. In addition, the deal reauthorizes the tribe to operate a casino at its Akwesasne Reservation and to install slot machines there. In consideration of the agreement, the state will receive a portion of the proceeds of slot machines on a sliding scale of 20 percent for the first four years and 25 percent for the remainder of the compact.

• Allowing the Tribe to acquire as part of its upstate reservation up to 7,005 acres of lands, within designated areas, by purchase of contiguous parcels from willing sellers utilizing the proceeds of the settlement. In addition, the New York Power Authority shall convey to the Tribe the “Long Sault” and “Croil” Islands and 95 acres of land identified as the “Massena Point East Parcel.”

• A $30 million settlement fund for the settlement of the land claim litigation centering on property in Saint Lawrence and Franklin counties. If approved, the state and federal governments would equally share the cost of the settlement fund. In addition, the New York Power Authority will pay the tribe $2 million per year for 35 years commencing 90 days after the effective date of the settlement.

• A $10 million community development fund, also to be paid equally by the state and federal governments, will be established to assist local governments, including the counties of Saint Lawrence and Franklin, in dealing with the fiscal impacts of the settlement. The St. Regis Mohawk Tribe will pay $2 million into the community development fund each year as well.

• Vendors and hotel operators at the Indian gaming facilities that gross over $2 million per year will be required to charge non-Indian customers a retail fee equal to all state, local and federal sales and excise taxes on all products they sell, including cigarettes and gasoline. Those vendors that do not exceed gross revenues of more than $2 million will be exempt from these fees.

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