Possible Impact on Salamanca, NY
Mayor Jeffrey L. Pond
& The Common Council
City of Salamanca
225 Wildwood Avenue
Salamanca. NY 14779
Rodney C. Hensel
In 1971, Ricky Armstrong and I were in high school and our main concerns were
geometry homework and not having a pass when the principal, William O. Valent, was in
the hallway. Flash forward. Ricky grew up to be President of the Seneca Nation of
Indians and I grew up to be, among many other things, the author of this report.
Somehow we hadn’t kept in touch for the last 33 years, but now we were together to
discuss the impacts of casino gambling on the City of Salamanca. About half way
though, Ricky casually mentioned they would be starting construction on the new eight-
story parking ramp. There was a pause and then we smile at each other. Not in our
wildest high school dreams could we ever imagine there would be an eight-story parking
ramp in Salamanca.
T here’s a “pinch me I must be dreaming” kind of sense all around Salamanca these
days, and all because the Senecas took a bare field to completed casino gaming
facility in just six months. There’s a sense of excitement, and more than just a little
apprehension, about what’s happening here and what it all means.
What it all means is change. Like it or not, changes are coming to Salamanca. They will
eventually impact every Salamanca resident and every member of the Seneca Nation.
Some will be good, some won’t be so good, but the major finding of this report is that it
is possible to make it more good than bad.
Mayor Jeff Pond and the members of the Council asked me to do this report to get an idea
of what the changes would be. Time was short, money was tight, and this report does not
pretend to be a full fledged impact statement. It does provide the City with some basic
facts and conclusions about casino gambling in the community.
More than anything, this report is a call to action. The casino can make a lot of good
things happen in Salamanca, but the City has to start making decisions and investments
now. Do nothing, and the likelihood is you will get nothing.
The decisions that have to be made will not be easy, and probably not very popular.
There are some real bumps in the road, especially for the next two to three years. But if
you can get past the bumps, the road ahead looks smooth, and the road will take
Salamanca to a lasting prosperity.
Rodney C. Hensel
METHODOLOGY USED IN THIS REPORT
This study was conducted in May-June 2004. Its purpose was to determine what might be the immediate
and long-term impacts of the Seneca-Allegany Casino on the City of Salamanca and to provide a broad
outline of actions and projects the City might undertake to maximize beneficial impacts. The casino
opened while this study was being conducted.
This study was limited in scope due to time and financial restraints. Its primary purpose is to guide the City
in taking further studies and actions.
This study was preceded by a preliminary document which examined immediate city expenditures and
immediate future service needs related to the casino. This preliminary document was used to demonstrate
to State officials why Salamanca was the host community to the casino and therefore in need of the greatest
share of slot revenues reserved for local government. At the time of this report, the City, Cattaraugus
County and the Salamanca City Central School District were negotiating a plan for distribution of these
funds that would be submitted to the State of New York for approval by the Legislature.
The preliminary study was largely based on interviews with City department heads and a tax loss analysis
prepared by the City Comptroller. This information, with some updated revisions, is incorporated into this
The overall methodology was to research community impacts in similar situations across the United States
followed by interviews with key players and knowledgeable observers in Salamanca. Throughout the
United States, a number of small communities have found themselves hosting a tribal gaming facility, and
this phenomenon dates back to the early 1990’s when tribal gaming facilities first started appearing. There
is therefore sufficient available data to spot common economic impacts that should be applicable to
Salamanca however is unique in being the only American city located almost entirely (90%) on an Indian
reservation. Indian owned properties are tax exempt. Other host communities have faced the problem of
properties being removed from the tax rolls when property is purchased by the tribal government. But only
Salamanca experiences the phenomenon of property purchases by INDIVIDUAL Native Americans which
removes the land from the tax rolls (Technically, the land is not sold – the leasing rights from the Seneca
Nation are transferred for financial consideration. However the transfer functions in all respects as a
recorded property purchase.).
In this report, the thoughts of local leaders are combined with the experiences of similar communities to
make a reasonable projection of impacts and opportunities that the City should address.
These projections and recommendations are also based to a great degree on the author’s own experiences.
Rodney Hensel was born and raised in Salamanca, graduating from Salamanca High School in 1971. He
served as City Editor of the Salamanca Press from 1976 to 1979. He served as Tourism Director,
Community Development Director and finally Executive Director of the Salamanca Industrial
Development Agency from 1981 to 1989. He worked on regional economic development projects while
serving in management positions with the Western New York Economic Development Corporation from
1989 to 1995.
A list of research materials, individuals interviewed, and some statistics and articles of interest are in the
back of the book.
Possible Impact on Salamanca, NY
A. Introduction 1
B. Methodology 2
C. Report Summary 4
I. Background and Contents 5
II. Tax Capacity and Government Services 6
III. Housing 13
IV. Business Development and Employment 14
V. Tourism Development 16
VI. The Short Term: Suggested Actions 19
VII. The Long Term: Possibilities and Plans 27
VIII. Report Sources 32
IX. Appendix 35
The major findings of this report are as follows:
• The most immediate impact of casino gambling in Salamanca is the loss of tax
revenues on immune parcels where related development is taking place.
Immune parcels now represent 40% of the tax levy. In the last two years
alone, tax immune parcels have risen by 24%.
• The increase in demand for city services brought about by the casino and
surrounding development will require City expenditures of approximately
$9.4 million by budget year 2005-2006. The local share of slot revenues will
not be enough to cover these increased costs.
• There is an evident demand for new owner-occupant and rental housing at
market rates. Property prices and rents are rapidly increasing due to demand,
and to some degree, land speculation.
• There will be new business opportunities and job creation activities, but these
will depend on the community’s ability to encourage and direct growth.
• The City and the Seneca Nation are now business partners and must optimize
casino earnings and local share revenues.
• For the first full year of operation, the local share of the casino revenues could
be between $3 million and $6 million. In a conservative outlook, in the fifth
year of operation the local share of casino revenues could range from $19
million to $32 million.
• To achieve the full benefits of casino gambling in the future, the City must
take immediate actions to address 10 specific opportunities.
• Over the long term, the City must implement and encourage development
projects that will create an economic synergy for the entire community. The
key development areas are Center Street, Main Street, Rochester Street and
The immediate actions that are recommended appear starting on page 25.
Possible Impact on Salamanca, NY
I. Background and Context
T he analyses of casino impacts in the City of Salamanca have to be viewed in the
context of the history between the Seneca Nation and the City. As the only US city
on a reservation, their fates have always been intertwined.
Beginning in mid-1800s with the extension of railroads running through the Allegany
Reservation of the Seneca Nation, illegal but convenient leases between the Seneca’s and
individuals or companies became common. Salamanca grew to be an important railroad
hub, and lobbying in Congress became so intense that a 5-year leasing agreement for the
land was reached. After the first period of 5 years, Congress extended the lease for 12
more years, and then for another 99 years. The lease was due to expire in February 1991,
but in May 1990, after a prolonged controversy, a new lease was written for another 40
years, with the option of another 40-year extension after that.
Throughout the leasing history, it was established that land in the city owned by a tribal
member would be exempt from property taxes. Until the mid-1980’s the land removed
from the tax rolls was small, but as individual Seneca’s achieved affluence through the
sale of tax-free gasoline and tobacco on the reservation, the number of properties owned
by Seneca people increased. These exemptions began to seriously erode the tax base by
which the city provides basic services. As of 2004, the number of Seneca owned
properties were rapidly increasing.
On May 1, 2004, the Seneca Nation of Indians opened the Seneca-Allegany Casino only
six months after final approval was given on the site. It is the Senecas’ second casino,
following the opening of a casino in Niagara Falls, NY on January 1, 2002. The casino in
Salamanca houses 1,700 slot machines, 22 table games, a bingo hall and a buffet hall. It
is the first phase of a much larger facility the Senecas are planning to build on the site,
starting with an eight story parking ramp now under construction.
As of 2002, the National Indian Gaming Association reports 354 tribal gaming facilities
operated by 224 tribes. Tribal government gaming is a $14.5 billion industry and
comprises 21% of the total gaming industry in the United States Tribal gaming
operations have created over 400,000 jobs and on average, 75% of the employees are
Over the last 15 years, a number of studies on the community impacts of tribal gaming
have been conducted. Studies conducted to justify a clear pro-gaming or anti-gaming
bias have been excluded from this study unless they are statistical reports issued by the
tribe. Studies examining largely social impacts of gaming were also excluded from
II. Tax Capacity and Government Services
L ocated about 30 miles west of Denver, CO in Giles County, the remote communities
of Black Hawk and Central City were introduced to casino gaming in 1990.
Although these were commercial, not tribal casinos, the communities are somewhat
similar to Salamanca in their nearness to a national park and ski areas and their slow
decline after an initial boom in the late 19th century.
Casino construction and related development took place almost overnight, leaving the
community government scrambling to catch up. The following excerpts are from Patricia
Stokowski’s paper “Community Impacts and Revisionist Images in Colorado Gaming
Development” (Meyer-Arendt-Hartman: Casino Gambling in America):
“During the planning and construction phases of development, over $52 million in
property transfers were recorded in Gilpin County (an increase of 412%). A commercial
building in Central City, listed for sale at $14,000 before gambling, sold for $235,000
after gambling was approved. A parking lot at the south end of Central City’s Main
Street sold for $5 million and another building sold for $10 million.” An overwhelmed
government clerk remarked at the time “We can’t get anything done anymore with all
these people coming in.” Similar prices and laments are starting to be heard in
The flood of
Black Hawk had to install its first traffic lights. The day externally driven
before the casino opened, both the mayors of Black Hawk
and Central City resigned their offices to take casino jobs, speculation,
and replacements were hard to find. Stokowski continues: investment and
“For those serving in local government, gaming construction
development placed demands that could not possibly be nearly
handled under traditional forms of organizing and overwhelmed the
governing. Planning meetings began to be held every night community.
of the week, and the flood of externally driven speculation,
investment and construction nearly overwhelmed the
Government fund balances increased by an average 674%, retail sales climbed 212%, and
total arrests went up 223%. The governments had to make substantial investments not
only infrastructure, but also in larger and more professional staffs. Black Hawk’s police
force grew from 11 to 27 between 1993 and 1994.
The failure of the Colorado communities to keep pace with and control development had
serious impacts on the quality of life. Main Street shops closed as the national chains
moved in on the major highways near the casino. Traffic congestion became a real
problem. Housing costs skyrocketed. Historic buildings were gutted or replaced. One
resident was quoted as saying: “This is not a better place to live now; it’s a better place to
do business now.”
Despite the cautionary tale of Black Hawk and Central City, there are a number of
examples of communities who forged alliances with the tribal government to control and
correct growth. Working cooperatively, they have created a vision of what they want
their community’s to become. They have established areas for specific types of
development. They have been selective in approving private sector development plans.
They have encouraged developers who undertake plans in line with their vision. They
have used direct and indirect casino revenues to promote sustainable development –
shops, stores, attractions and manufacturing that could eventually sustain themselves
regardless of the casino’s presence.
The most immediate impact of the casino in Salamanca is the rapid erosion of its tax base
and therefore its diminishing ability to provide basic city services. Because of its unique
city-on-a-reservation status, market driven development
negatively impacts the ability of the government to provide The most
necessary services that sustain growth. immediate impact
In other communities, including Niagara Falls, Buffalo and
is the rapid
Cheektowaga, tax-exempt reservation land is limited to the erosion of the tax
casino site held in ownership by the Seneca Nation. Spin-off base.
development around the casino is market driven and
provides tax revenues for the host municipality to provide services (police, fire, sewer,
water, highways) that sustain the growth.
Because Salamanca is on the reservation, not only is the casino land itself tax exempt, but
any individual Native American owned development around the casino is also tax
exempt. A significant number of individual Senecas, having obtained working capital
through the rapid growth of tax-free gasoline and cigarette sales during the last decade,
are pursuing these entrepreneurial opportunities. With every Seneca owned development,
the City takes a NET LOSS in revenues to provide necessary services.
In addition to this commercial development, it can be reasonably forecast that the
increased employment opportunities will allow individual Senecas to purchase existing
housing stock and undertake new residential development. The Senecas are using $10
million in casino profits to start a mortgage program to help its members buy and build
homes with financing below market rate. It is anticipated this will result in a further NET
LOSS to the City. This situation is unique, and there are no comparable communities to
The closest comparable situation to Salamanca’s is in the Town of Hobart near Green
Bay, WI. Reservation land and individually owned Native American properties comprise
10% of Hobart’s land, and on those lands the Oneida tribe operates a casino. Hobart
estimates a 36% loss on its total tax levy due to tribal and individual ownership. Some
individual owners have declined to apply for tax immunity, and the Oneidas have agreed
to user fees for some services to compensate for the tax loss. The town is concerned the
Oneidas may purchase additional land and make it part of the reservation, causing further
decline in tax revenues.
In Salamanca, over 90% of the city’s land is on the Allegany Since 1995 tax
Reservation of the Senecas. Since 1995, the total assessed immune parcels
value of tax immune parcels in the City of Salamanca has have risen by
risen by 57%. In the last two years alone, the total assessed 57%, and in the
value of tax immune parcels has jumped by 24%.
last two years
Currently, the assessed value lost to immune parcels totals
$8.6 million, with over $1 million in exemptions having alone, by 24%
taken place since the Seneca casino location was announced
in November 2003. Based on recent experience and proposed plans, the City projects this
number to increase by 25% to 30% over each of the next three years.
The tax immune parcels have had a significant impact on the tax burden that must be
picked up by the remaining taxable properties. It affects not only the City of Salamanca,
but the Salamanca City Central School District and Cattaraugus County.
City, County, School: Assessed Value to Immune Value Analysis
Total Immune Tax Total Loss as Loss as %
Assessed Value Dollars Tax % of total assessed
Value Lost Levy tax levy value
County 2,80,851,768 8,467,482 428,878 34,722,045 1.24% 0.3045%
Salamanca 46,615.949 8,650,997 416,372 1,035,854 40.2% 18.5%
School 46,597,489 8,351,572 452,068 2,348,423 19.25% 17.9%
Figures are for current fiscal years
The counting of tax immune parcels however does not adequately consider replacement
values and their impact on required services. For example, plans have been submitted for
the demolition of a taxable two-story downtown building assessed at $10,000 to be
replaced with non-taxable multi-story office building costing approximately $8.5 million.
A taxable residence assessed at $50,000 is being replaced with a residence costing in
excess of $750,000. An eight story parking garage is under construction, and a hotel
facility of up to 27 stories is being contemplated by the Seneca Gaming Corporation.
Thus, in addition to the loss of the taxable structures, the City bears the cost of a
comparative increase in providing levels of services to the newly developed parcels.
To keep pace with development, the city will need to hire additional personnel to cover
record keeping, accounting, planning, assessment, economic development and support
The City is governed by a part-time mayor and a five-member part-time city council.
Most city business is conducted during evening meetings.
The City Planning Commission consists of a volunteer citizen panel and a part-time
clerical person. Current development activity and requests for zoning reviews require a
full-time professional and staff at an annual cost of $175,000 over each of the next three
The city currently has no one operating in a full time capacity for economic development.
The Salamanca Industrial Development Agency, created under NYS law, has both
financial and property assets but is governed by a volunteer board and one part-time
clerical person and a bookkeeper. To maximize the benefit of the casino for the entire
community, the City must have the resources to work as a full partner with the Seneca
Nation in the development of new non-casino enterprises and the promotion of the region
as a destination for outside visitors. To keep pace over the next budget year the
city’s department heads estimate costs of $175,820 in labor, materials and equipment for
administrative functions. The breakdown is:
Library $ 26,925
City Clerk $ 10,013
Comptroller $ 11,063
Youth Programs $ 11,119
The Salamanca Board of Public Utilities (BPU) is a not-for-profit municipal electric
supplier and also supplies water and sewer utilities within the City and some extended
areas. The BPU has worked diligently with the Seneca Nation since the announcement of
the casino site to accommodate the rapid construction schedule of the temporary casino
and provide for utility capacity for the permanent structures.
The BPU forged a partnership with the Nation allowing the Senecas to bid out sub-
contracts for projects to expand utility capacity. The BPU absorbed administrative costs.
Although the Seneca’s reimbursed the BPU for costs directly associated with the
expansion, the BPU paid for over-sizing of the water and electric systems above and
beyond the casino’s predicted needs to accommodate for secondary growth around the
casino site in the City’s west end. The City used its bonding authority to pay these costs,
which as of June 2004 exceeded $755,000.
The City purchases it’s electric from the New York State Power Authority (NYSPA). A
fixed allocation is cheaper hydroelectric power and the remainder is market rate power
from other sources. Under the NYSPA “Juice for Jobs” program the City has pending an
application for an additional 4 megawatts of hydropower, asking that it be awarded on the
basis of the 800 jobs the casino is expected to create in its full operation. However this
only represents one-half of the anticipated casino power usage. If the application is
refused, the city will have to make additional bulk power purchases at high rate peak
hours to cover the 24-hour casino operations.
Unlike a state-wide private utility, a publicly owned municipal A publicly owned
system has a limited number of customers to spread the cost.
Rates are regulated by state authorities and cannot exceed
certain limits. Without additional funds from another source, has a limited
the only option open to the BPU is borrowing. number of
The BPU anticipates spending an additional $2.2 million as the spread the cost.
casino expands over the next two years and this includes $1.5
million in electrical station upgrades and nearly $470,000 in
wastewater plant upgrades. The costs include labor, material and equipment.
BPU Impact Costs
Water $ 428,936
Sewer $ 713,824
Public Works/Traffic Capacity
The City’s Department of Public Works is responsible for the paving, curbing,
maintenance and snow removal of all city streets and sidewalks.
Based on current plans of the Seneca Nation and private developers, the city foresees the
need to rebuild all of Center Street and Drake Run, portions of Atlantic Street and Main
Street, and a portion of State Park Avenue. The City will also have to provide 24-hour
street salting and snow removal during the winter months. All of these increased
activities will require the purchase of new equipment and the hiring of additional
laborers. Some immediate street work will have to be competitively bid to private
contractors until the City can meet new capacity demands.
The Department is working cooperatively with Seneca Nation transportation planning
officials who are currently conducting a traffic impact study which may call for changes
in basic traffic design.
Costs of access for the full project and surrounding development are dependent on a
number of variables which cannot yet be determined. However, at a minimum the DPW
will need to hire two new laborers, construct .82 miles of Center Street with curbing ($2.7
million), Center Street sidewalk replacement, a new grader and two trucks with plows
and a salt shed.
In total the DPW anticipates costs of $3,523,870 before the end of its budget year on
March 31, 2005.
The City of Salamanca maintains a paid fire department. Firefighter’s are also trained
EMT’s and provide ambulance services and building inspection
services. Salamanca has no emergency medical facilities, and Small communities
all patients must be taken to regional hospitals. The closest have seen a 30%
regional hospital is 22 miles from the casino site. increase in
Small communities in which a tribally owned gaming facility ambulance calls.
has been built have experienced, on average, a 30% increase in
The Fire Department estimates the need for eight additional firefighters with EMT
training and an additional clerical person for a total annual cost of $305,146. Building
inspection functions may have to be returned to an expanded assessment and code
The city will need to purchase new equipment to cover the new types of structures being
built. The Seneca Allegany Casino parking ramp, now under construction, will be eight
stories and the City’s highest structure. There are plans for even taller structures, and
neither the City nor surrounding communities have the capacity to deal with a major fire
or rescue operation in buildings of this size.
Capital costs would include the purchase of a 1500 gpm Quint tower ladder truck, 1500
gpm pumper, 500 gpm mini-pumper, ambulance and communications upgrade for a total
of $1,975,000 to service Phase One of the casino project and surrounding development.
Costs of protection for the full project are dependent on a number of variables which
cannot yet be determined. However based on current information the Fire Department
estimates expenditures of $1,910,860 in personnel, training and equipment.
As might be expected in a rural community of 6,105, Salamanca has experienced
relatively low levels of crime.
Crime in Salamanca (2001):
0 murders (0.0 per 100,000)
1 rape (16.4 per 100,000)
2 robberies (32.7 per 100,000)
67 assaults (1096.9 per 100,000)
31 burglaries (507.5 per 100,000)
232 larceny counts (3798.3 per 100,000)
9 auto thefts (147.3 per 100,000)
Early studies done in the 1990’s estimated a slight crime increase in communities hosting
tribal gaming. However a more recent 2002 study by William N. Evans and Julie H.
Toboleski at the University of Maryland demonstrated that overall crime increases at a
rate of approximately 3% per year over a four year period.
Increases in the visitor population results only in increases in minor traffic violations and
misdemeanors. However increases in the overall resident population and workforce can
yield significant increases over time in larceny, auto thefts and violent crime. Other
studies have indicated Driving Under Influence violation rise 10% and traffic accidents
rise 7%. Almost all studies show no increase in either drug related crimes or prostitution
in tribal gaming communities.
The crime figures may be low because most communities have invested strongly in law
enforcement. Small communities in which a tribally owned gaming facility has been
built have made, on average, a 70% increase in spending associated with law
Based on the experiences of other communities, the Police Department anticipates a
community-wide increase in car theft, traffic violations, speeding, driving while
intoxicated, petty theft and embezzlement.
The Cattaraugus County Sheriff’s Department has signed an agreement with the Seneca
gaming corporation to provide on-site law enforcement services to the Phase I casino.
All areas outside the casino are the primary responsibility of the Salamanca Police
At a minimum, the department foresees the need for one more officer per shift for a total
of four officers and two new patrol vehicles. Together with administration and usage
costs, the estimated expenditure increase is $442,496 by March 2005.
Costs of protection for the full casino project are dependent on a number of variables
which cannot yet be determined.
Total City Impact Expenditures
By the time of the city’s 2004-2005 budget year, the City anticipates it will incur costs
ANTICIPATED CASINO EXPENDITURES BY DEPARTMENT
DPW Assessor Fire Police Library Clerk Compt. Youth Utilities
$3,523,871 $141,00 $2,334,720 $422,496 $26,925 $10,013 $11,063 $11,119 $2,906,665
A t the time of the 2000 census, the age of Salamanca’s housing stock was
significantly below the state’s and values were also well below the state average.
Only 13 new homes were constructed in the period from 1995 to March 2000. Of
Salamanca’s 2,750 houses, 1,497 are owner occupied and 975 are
renter occupied. An astounding 70% of the city’s homes were built 60% or more of
prior to 1939.
There is little doubt that property values immediately increase with workforce would
the introduction of a casino. Mille Lacs, MN saw a 67% increase in choose to live in
property values over a 5-year period. the host
Studies indicate 60% or more of a casino’s workforce will choose to
live in the host community or nearby communities. Over time
housing demand can be expected to increase not only in Salamanca but in Little Valley,
Great Valley, Randolph and Olean.
In 2000, the median price of a home in Salamanca was $41,800, compared to $58,900 in
nearby Olean and $111,200 in Ellicottville, a nearby ski resort community. Prior to the
settlement of the city’s land lease with the Seneca Nation in 1990, two-story four
bedroom homes in Salamanca could be purchased for as little as $25,000 or less.
As of 2004, values were rapidly changing. An internet check of houses listed for sale
showed only one selling for less than $50,000. Some of the two story homes built in the
1930’s and 1940’s were listed for prices in excess of $150,000.
Vacant lots on the city’s west end, near the new casino, are selling in excess of $500,000.
Land speculation is clearly taking place: a west end commercial property that sold for
$750,000 in November 2003 was listed at $1.2 million in June 2004.
Casino employees and construction people are putting rental housing in high demand.
Most casino communities experience a 60-40 split in owner-rental housing. Currently in
Salamanca the split is 65-35. Units renting last year for $450 have gone over the $800
mark, a rate comparable to the Buffalo metropolitan area. Ellicottville, which has an
excess of rental units in the summer season, is by some accounts “filled up,” and may
result in a strong rental unit shortage when ski season rates take effect. There is clearly a
shortage of mid to upper level income apartment housing in Salamanca.
There are well over 250 units of subsidized housing in the City of Salamanca. They
include renovated units in historic buildings in the downtown area and a state subsidized
housing project constructed in the 1950’s. There are also a number of scattered site
subsidized rental units throughout the city. The scattered site units will undoubtedly
succumb to market forces and give up their subsidies. The non-profit owners of clustered
subsidized apartments should consider selling their units, especially those in the
downtown area, to private developers. Market rate rental
units on Main Street would increase downtown vitality, Market rate rental
and the proceeds of the sale should help non-profits
develop new subsidized housing units according to
units on Main
demand. Street would
Clearly a market for new housing in Salamanca will downtown vitality.
develop, and probably very quickly. The city’s planning
and zoning boards will need to carefully weigh variances
granted for new housing construction and strictly define residential, commercial and
mixed use neighborhoods. In particular, the City should encourage only those developers
who have successful track records of housing development. At the same time, the City
should seek to streamline all zoning and permitting processes to allow development to
keep pace with market demand.
IV. Business Development and Employment
T hat casinos bring new jobs to a community is an unchallenged fact. Studies of Indian
gaming operations have demonstrated a multiplier of 1.5, meaning that for every new
casino created job .05 jobs are created in other businesses around the casino. During its
first phase, the Salamanca casino is expected to employ 800 FTE (full time equivalents),
meaning at some point Salamanca will feel a total increase of 1,200 new jobs just from
Phase One. Based on published wage statistics for the Seneca Niagara Casino and the
Oneida Turning Stone Casino in Verona, NY, the average wage for a casino worker will
be in the range of $30,000 annually.
The Senecas have said their eventual plans for the Seneca-Allegany casino will include a
larger casino, a resort hotel, spa, restaurants and retail shops. The Turning Stone casino
near Verona started on a similar scale, and an examination of its growth can be useful.
In a 10 year period, Turning Stone created 5,000 jobs in the surrounding region, with
most jobs being created in the nearby City of Oneida and the City of Utica. Turning
Stone now has a 125,000 sq. ft. casino (Seneca-Niagara is now 82,000 sq. ft.) and a 279-
room hotel with a total direct employment of 3,100 FTE. The Oneida’s plan to increase
that number by 1,000 with a 308 million expansion this year.
Turning Stone has had a big impact on the local economy. In 2003, Turning Stone spent
over $100 million with suppliers and vendors for routine operational spending. The
casino uses 1,440 vendors in Central New York State. At Turning Stone, 90% of its
employees are non-Indian, and throughout the nation non-Indian employment at casinos
has been in the 70% to 90% range.
The total number
Looking at tribal casino job growth nationwide, it is possible
that Salamanca and Cattaraugus County together will need to of jobs, the quality
absorb the impact of 4,000 direct and 2,000 indirect jobs over of those jobs, and
a 10 to 15 year period. the location of
those jobs depends
The total number of jobs, the quality of those jobs, and the largely on the
location of those jobs depends largely on the community’s
ability to encourage and direct growth. In some communities,
retail sales growth has increased as much as 31%, while in ability to
other communities the impact has been as little as 3%. encourage and
The key to success appears to be in the pursuit of two
strategies: capturing the greatest amount of casino spending
and holding it the area, and fostering businesses and amenities that are not totally
dependent on the casino by itself.
In broad categories, the casino spends on:
Real estate, advertising, construction maintenance, electric utilities, landscaping
services, plastics manufacturing, equipment repair services, banking, food and
beverage services, management consulting services, legal services,
telecommunications, entertainment and personnel services.
Within these broad categories, the types of goods and services are almost unlimited, but
Food supplies, produce, paper, linens, dry cleaning, cards, snow plowing, doctors,
dentists and uniforms.
Businesses that have sprung up around casinos are of two types: those that serve local
residents and the new casino employees, and those that seek to serve outside visitors.
Such businesses have included:
Bus services, tour services, taxi services, commercial cleaning, backhoe and other
construction services, pawn shops, restaurants, lodging, recreation trailers, motor
home campgrounds, athletic clubs, day care, storage facilities, car wash, car sales,
remodeling firms, property management, home building, kitchen cabinets,
building material supply and lumber yards.
The “spillover” tourist trade can be significant. These are casino visitors who are less
gaming oriented who want to spend part of their time in doing other things. These
visitors will be anxious to visit museums and spas, shops for crafts and antiques, go
sightseeing and do outdoor recreation activities such as golf, skiing, snowmobiling,
horseback riding, boating and hiking. This type of visitor will also be interested in
exploring nature with local guides dong such things as
hunting, fishing, wildlife observation, and nature study. Economic benefits
do not come
Not all of the business news will be good. It can be assumed automatically.
that Route 219, now 43 years in the making, will not be
improved by the time the casino reaches full build out, which will mean extreme traffic
bottlenecks on Wildwood, Clinton and Central Avenues. Labor costs will rise as the
number of available workers becomes smaller. Some existing business will be unable to
compete with new businesses because they are unable or unwilling to provide the product
and service that is demanded.
Economic benefits do not come automatically. Businesses in close proximity to the
casino are not always guaranteed to succeed. Downtown will not necessarily revitalize.
The economic benefits of the casino just as easily be transferred to surrounding
communities or even surrounding counties if the City chooses to do nothing.
The City and County play a crucial role in determining the amount and type of growth
through zoning and planning (encouraging clustering and downtown development),
targeted recruitment (actively seeking developers for larger projects), access to capital
(including low-cost financing and tax incentives) and
education (entrepreneurial development and workforce The City of
The City of Salamanca and the Seneca Nation are now the Seneca Nation
business partners. It is in the City’s best interest to help the are now business
Seneca casino venture succeed and bring in the maximum partners.
number of patrons to maximize its share of the slot revenues.
It is in the best interest of the Senecas to have local suppliers who can provide goods and
services at a cost advantage, and to help the City develop more reasons for visitors to
extend their stay and their spending.
V. Tourism Development and Marketing
T he basic principle of the tourism industry is pretty simple: attract as many visitors as
possible and keep them as long as you can.
Investment in tourism related businesses increases economic activity throughout the
region through the “multiplier effect”. The multiplier effect is used to define and
measure the indirect and induced economic impacts of increased investment in a
particular industry on the region’s economy as a whole. This includes tourism related
businesses (indirect) and the increased sales of suppliers to households who receive
increased wages as a result of increased sales by their employer to the tourism related
As previously discussed, a tribal gaming facility in a rural area can anticipate a dollar
multiplier effect of 1.5. So when a tourist spends a $1 in Salamanca (in or out of the
casino) it generates an additional $1.50 of spending in the local economy. If that $1.50 is
spent again locally it creates wealth of $2 and so on. The Seneca Niagara casino
generated gross revenues of about $280 million in its first year. Seneca Gaming officials
say they expect the Allegany Casino to generate half that, or $140 Million.
The Senecas envision much more in the near future. They appear to be following the
advice of the 1998 Presidential Commission on tribal gaming which stated tribes and
local governments “should recognize that destination resorts create more and better
quality jobs than casinos catering to local clientele.” Consequently the full build out of
Salamanca will include a larger casino, a resort hotel, a golf
course, 400,000 seat stage facility and other amenities still in Destination
the planning stage. resorts create
more and better
In Niagara Falls, the Senecas have taken out a $300 Million
loan to advance their plans, including a 162-room spa hotel that quality jobs than
will be completed in 2005. According to CEO Mickey Brown, casinos catering to
the Seneca Nation Gaming Corporation stands ready to a local clientele.
encourage private and public investments that will help
encourage visitors to “stay another day.”
At one time, casino operators wanted to keep patrons in the confines of the casino
facility, but Brown calls that “dinosaur thinking.” The new thinking is most clearly seen
in Las Vegas, NV, the gaming capital of the United States. The casinos have built
indoor shopping malls and Disney-like attractions that encourage people to mingle
among competing establishments. Today, the average Las Vegas visitor stays for 3.5
days, comes with a gambling bankroll of $500, and spends only 4 hours per day gaming.
Brown wants downtown to have a “village feel” with shopping options, restaurants,
theater and entertainment. He said the casino will also encourage and sponsor special
events and is ready to financially support tourism promotion, adding that he “would like
Salamanca to develop its marketing capacity and take a lead.”
The marketing strategy for the Salamanca casino is to attract visitors – especially coach
tours – from the west, south and east. Initially, the marketing effort will be in medium
size markets such as Erie, PA and Youngtown, OH, and then branching out to Cleveland
and Pittsburgh, which the casino views as prime markets for a destination resort. Later
market targets will include Binghamton, Corning and Elmira. Buffalo, Rochester and
Toronto are marketing targets for the Niagara Falls casino. However in July 2004,
Pennsylvania initiated a program of placing legal slots throughout the state.
The American Gaming Association says that the typical casino customer is 47 years old,
has some college education, a white collar job, and a median income of $50,716,
compared to $42,228 for the overall U.S. population. But those numbers may be skewed
by large metro casinos in Las Vegas, Atlantic City and Reno. The Oneida who operate a
stand alone casino near Green Bay report their average visitor is a 60-plus year old
woman who has an income of less than $30,000 and lives within a 50-mile radius of the
The marketing of destination tourism requires regional cooperation. Chautauqua
Institution, for example, already mentions its proximity to Seneca Allegany Casino in its
advertising. A Salamanca-Seneca-Ellicottville marketing alliance, led by the County,
could prove to be beneficial to all. Salamanca’s ability to maximize its tourism potential
will depend on the ability of the private and public sectors at levels to cooperate in
providing organization, participation and leadership.
VI. The Short Term: Suggested Actions
T he evidence is overwhelming: tribes and host communities which do not invest in
future development and take on some degree of financial risk are big losers in casino
gaming. For the Seneca Nation it means continuing its present course of deferring large
individual annuity payments and investing casino proceeds in longer term sustainable
For Salamanca, it means deferring the use of casino revenues for tax cuts and routine
municipal services and investing in projects for long term growth. For both entities, it
may mean borrowing now and paying later.
To make critical decisions now, the community must thoroughly understand how its
future revenues will be generated.
The compact allowing tribal gaming on the Allegany Reservation provides a means for
Salamanca to eventually pay for its growth costs and free the city from its reliance on a
rapidly shrinking tax base.
The Nation-State Gaming Compact
The Nation State Gaming Compact between the Seneca Nation and State of New York
enacted on April 12, 2002 is unprecedented in providing new revenues for local
Large scale gaming sponsored by tribal governments started in the early 1980’s. In 1988,
Congress formally recognized but limited the right of Indians to conduct gaming with the
passage of the Indian Gaming Regulatory Act (IGRA). The IGRA created the National
Indian Gaming Commission to regulate Indian gaming. The IGRA generally allows
tribes to use Class II games such as bingo, so long as not criminally prohibited by the
state. However for Class III casino-style gaming, the tribes must first negotiate compacts
with states concerning games to be played and regulation.
The IGRA stipulates that tribal governments, not individuals, may operate gaming
operations, and so the proceeds of the industry should go back to fund tribal government
programs. Specifically, “net revenues from any tribal gaming are not to be used for
purposes other than to (1) fund tribal government operations or programs, (2) provide for
the general welfare of the Indian tribe and its members, (3) promote tribal economic
development, (4) donate to charitable organizations, or (5) help fund operations of local
government agencies (emphasis added).”
While most of the compacts negotiated with the individual States provide for some type
of revenue payment to the State government, many provide nothing for local
governments who serve as “host municipalities” to the casino. All local governments
lose tax revenues when land is taken by the tribal government for casino purposes. In
most instances however it is limited to the footprint of the casino complex.
Here is a comparison of local share definitions in selected State compacts:
STATE TRIBE LOCAL SHARE
Michigan Saginaw Chippewa Gross slot revenues less payments to winning players.
Grand Traverse Semi-Annual 2% payments to local governments.
& 5 others
Michigan Little River Gross slot revenues less payments to winning players.
Little Traverse Semi-annual 8% payments to state.
& 2 others Semi-annual 2% to local governments through Local
Revenue Sharing Board.
Connecticut Pequot 25% of gross slot machine revenues to state.
None to local governments.
Connecticut Mohegan 25% of gross slot machine revenues to state.
One time payment of $3 million for water supply
$500,000 annually to Town Government
North Dakota Standing Rock Sioux Fees to states for casino inspections and background checks.
Wisconsin Ho-Chunk State negotiates specific amounts for annual payments by
Oneida each tribe – all are different. Process currently in courts.
& 9 others Local: negotiated fees for ambulance and fire services;
voluntary contributions to various organizations and local
New York Oneida Voluntary payments and contributions to schools and local
New York St. Regis Mohawk 20 to 25% of net drop on slots to State.
(proposed) $15 million to local governments.
New York Cayuga (proposed) State and nation pay up to $3 million plus annually to
compensate counties for tax loss.
The Nation will negotiate with appropriate local government
authorities for the provision of fire, police and other
municipal services, and other appropriate local issues, on a
mutually satisfactory basis.
New York Seneca 18-25% annual net drop from slots as state share
State contributes15-25% of its share to municipal
governments hosting the facility
The Seneca compact has a number of complexities. The compact states:
(b) State Contribution
In consideration of the exclusivity granted by the State pursuant to Paragraph 12(a), the Nation agrees to
contribute to the State a portion of the proceeds from the operation and conduct of each category of
Gaming Device for which exclusivity exists, based on the net drop of such machines (money dropped into
machines, after payout but before expense) and totaled on a cumulative quarterly basis to be adjusted
annually at the end of the relevant fiscal year, in accordance with the sliding scale set forth below ("State
18%, with "Year 1" commencing on the date on which the first Gaming Facility established
pursuant to this Compact begins operation, and with Payments during this initial period are to be
made on an annual basis.
22%, with payments during this period to be made on a semi-annual basis.
25%, with payments during this period to be made on a quarterly basis.
In the event the States reaches a compact with another Indian tribe regarding Gaming Devices of a like
kind that has State contribution provisions that are more favorable to the Indian tribe than those set forth
herein, the terms of such other compact shall be automatically applicable to this Compact at the Nation' s
Any dispute regarding a payment by the Nation of the State Contribution must be raised within one (I) year
of the receipt by the State of the audited financial statements required pursuant to Paragraph 8(c)(2).
The compact is then further clarified in Subdivision 3 Section 99(h) of the State Finance
99-h. Tribal-state compact revenue account.
1. There is hereby established in the joint custody of the comptroller and the commissioner of
taxation and finance an account in the miscellaneous special revenue fund to be known as the
"tribal-state compact revenue account".
2. Such account shall consist of all revenues resulting from tribal-state compacts executed
pursuant to article two of the executive law.
3. Moneys of the account, following appropriation by the legislature, shall be available for
purposes including but not limited to: (a) reimbursements or payments to municipal governments
that host tribal casinos pursuant to a tribal-state compact for costs incurred in connection with
services provided to such casinos or arising as a result thereof, for economic development
opportunities and job expansion programs authorized by the executive law; provided, however,
that for any gaming facility located in the county of Erie or Niagara, the municipal governments
hosting the facility shall collectively receive a minimum of twenty-five percent of the negotiated
percentage of the net drop from electronic gaming devices the state receives pursuant to the
compact and provided further that for any gaming facility located in the county or counties of
Cattaraugus, Chautauqua or Allegany, the municipal governments of the state hosting the facility
shall collectively receive a minimum of fifteen percent of the negotiated percentage of the net
drop from electronic gaming devices the state receives pursuant to the compact; and (b) support
and services of treatment programs for persons suffering from gambling addictions. Moneys not
appropriated for such purposes shall be transferred to the general fund for the support of
government during the fiscal year in which they are received. (NOTE: Emphasis added. Sen. Pat
McGee has sponsored legislation to raise the 15% allocation in the Cattaraugus County facility
It is extremely difficult to estimate the city’s future revenues because many variables are
now unknown. These include:
• The rise in tax-immune parcels, which has an immediate impact on city revenues.
• The specific plans and timetable of the Seneca expansion.
• The lack of a revenue sharing agreement between the City, County and school.
• Pending legislation to revise the local share of slot revenues.
• The plans of private sector developers.
• The growth of gaming in competing markets.
• The lack of casino impact planning on the City, County and regional levels.
Within these constraints, the figures cited here are attempts to match the best available
local information against the experiences of other communities. They are not meant as
predictions. They are mean to give a guideline so community leaders can make basic
decisions on how to prepare for the future.
As private businesses, and for competitive reasons, tribal There is not
gaming operations consider much of their financial figures enough casino
to be proprietary. Since many tribes have percentage revenue to cover
arrangements with the States, backward calculations can be the costs.
made to determine revenues. In addition, it should be
noted that the Seneca Nation Gaming Corporation has been
extremely candid in releasing figures on its operations. Corporation CEO Mickey Brown
provided two equations that have been applied: that Seneca Allegany’s revenues will be
approximately one-half of Seneca Niagara’s, and that revenues will increase by about one
third in each year of operation during the early stages.
Projected Casino Revenues
Year One Projected Casino Revenues (in Millions)
Slot Revenues State Share Local Share
Niagara Casino $200+ $39 $9.8
Allegany Casino $66 $12 $1.8 ($3)
Year Two Projected Casino Revenues (in Millions)
Slot Revenues State Share Local Share
Niagara Casino $266-355 $49-64 $12-16
Allegany Casino $133-178 $24-32 $3.6-4.8 ($6-8)
Assumes Allegany revenues to be one-half of Niagara
Increase in revenues is 33-66% in Year Two
Niagara local share is 25% of State
Allegany local share is 15% of State (Figure in parentheses shows local share at 25%)
Clearly this presents a problem. With Salamanca’s casino related expenditures through
2005 at $9.4 million, and Cattaraugus County and the Salamanca school district also
anticipating a share of pot, there is not enough casino revenue to cover the costs.
On the most conservative assumptions, casino slot revenues will grow by one-third each
year. In this scenario, local share revenues would rise to $19.5 million by 2009.
Projected Local Share: Conservative Outlook
Eight Months $1.8 ($3)
Year One $3.6 ($6)
Year Two $5.9 ($9.9)
Year Three $7.9 ($13.2)
Year Four $10.5 ($17.2)
Year Five $19.5 ($32.5)
(Figure in parentheses shows local share at 25%)
However these figures must be considered extremely low, since they do not account for
the Seneca plans for an enlarged casino, more slots, and a hotel.
Although the Senecas maintain that Niagara Falls is their “main casino” their actions to
date closely follow the growth of the Foxwoods Casino.
Tribal Casino Comparisons
Median Tribal Foxwoods Mohegan Seneca-
Casino in US Resort Sun Allegany 2004
800 355 664 7,200
450 5,700 3,000 1,500
Sq. Ft. of
27,000 315,000 176,00 48,000
1.0 27 30 25
The Foxwoods Resort in Connecticut bills itself as the world’s largest casino and is
generally considered the most successful tribal gaming model (a number of key
Foxwoods people, including Brown, are managing the Seneca Indian Gaming
Corporation). Foxwoods opened in 1993, and by 1998, the casino drew 7.3 million
visitors to its rural location and generated $633 million in revenues. By 2003, Foxwoods
was attracting 14.6 million visitors per year with annual revenues of $1.2 billion. Both
Foxwoods and Salamanca have similar size markets: there are 25 million people within a
200 mile radius of Salamanca, compared to 27 million people living within a 200 mile
radius of Foxwoods.
If the Seneca Allegany Casino can achieve similar revenues, Salamanca’s take would rise
each year reaching $49.5 million ($82.5 million at 25% share) by the year 2009.
Therefore in five years, the local share should be at least $19.5
million and at most $82.5 million. Getting closer to the higher The City does not
figure will depend on the City’s willingness to take decisive
have the luxury of
action and assume a degree of risk in 2004.
In coping with all the challenges outlined in this document, the
City does not have the luxury of time. Casino gambling is rapidly reaching a peak (there
are currently eight gambling theme shows on the major TV and cable networks) and it is
thought by most experts that at some point casinos will reach a saturation point. Ohio has
contemplated gaming, and Pennsylvania has just set in motion a plan to set up 61,000
slots at 14 casino sites by 2006. This could weaken the primary markets for the Seneca
Indeed the day may come when casinos are simply an expected resort amenity, as they
are in Europe. This helps to explain why the Seneca Nation has much bigger plans than
just a casino, and why they are in a hurry to do it. If they can use casino revenues to
create sustainable development (resorts, shopping, independent businesses) the economic
benefits will stretch way beyond the prime time of the casinos.
In interviews with local officials, many view the best use of slot revenues (after paying
the erosion from tax immune properties) as a bonanza for tax cuts, which they see as “the
greatest way to promote economic development.” It is not until year 5 or later that there
are sufficient revenues to make a tax cut that would be an incentive for development.
The evidence is overwhelming that revenues need to put into projects that will create
At for the next five years, that same kind of thinking holds true for Salamanca. The
window of opportunity may be small, but it is a chance to make a community that will be
a good place to work and live for many generations to come. If the City does not act now,
Salamanca could become something quite different.
The following are recommendations for immediate action:
1. The City should review its current fees for permits and applications to make
sure they are consistent with fees charged by other communities for
commercial development. Any increase in fees should be used to hire
additional staff so that developers are not delayed in undertaking new
2. The City should seek the support of Cattaraugus County and the Seneca
Nation in asking the State to increase the State’s local share of slot revenues
from 15% to 25%. The increase would significantly help the City and
County in providing increased services that will make the Seneca gaming
operations more successful.
3. The City must take a firm position that it will not raise taxes to cover casino
impact costs, and this should be made absolutely clear to all interested
parties. If additional income sources adequate to the task are not provided,
the City must be prepared to default on the provision of such increased
4. The City should immediately provide professional staffing to its efforts in
planning, zoning and economic development. As described in this report, the
issues surrounding casino development are complex, and there is much to be
learned. The City needs to have a professional staff that can interact with
the professionals in the Seneca Nation and the County. Until a full
evaluation of needs and resources can be made, it is suggested that the City
create an interim Department of Economic Development, Planning and
Tourism, which also mirrors the county arrangement.
5. The City, the Seneca Nation Gaming Corporation and the Seneca Nation
should meet on a regular basis to explore municipal service needs and ways
to fund them. In many communities hosting Indian gaming, the tribe has
recognized that assisting the host community provides a higher level of
service for community members, native and non-native alike, and also
enhances casino reveneues.
6. To buy a house, the purchaser borrows against future income in the form of
a mortgage. In the same manner, the City should explore borrowing options
to not only cover increased costs but investments in development. In
addition bonding, the City should explore the borrowing of funds from the
7. The City and the Seneca Nation should seek to establish a formal mechanism
for coordination and planning. Options may include keeping the Joint
Commission established by the 1990 Lease Settlement or the more
independent Beautiful River Development Corporation established in the
8. The Southern Tier West Regional Planning and Development Board should
be asked to take an active role in coordination among all entities to prevent
costly duplication of services and overlapping efforts. STW should mount a
strong effort in workforce training and development, encouraging local
colleges and universities to offer courses and degrees relevant to the casino
and tourism industry.
9. The city’s elected officials and department heads should establish regular
meeting times to discuss and report on casino issues. The city should also
establish a means of regular reporting to the public on such matters in the
form of a web site, public meetings and newspaper articles.
VII. The Long Term: Possibilities and Plans
Salamanca is the boom town on the Allegany River.
O ne year ago, it would have been hard to read the above
sentence and not laugh. Today, it appears to be true, or
at the very least, almost true.
When Salamanca takes only a short view projects like the Salamanca Mall are the result.
When it takes a long term view, Salamanca surprises itself on what it can do. Some of
the city’s proudest accomplishments: the Salamanca Public Library, the Salamanca Rail
Museum and the Seneca Theater happened because a small group of people looked at an
empty building and saw something that wasn’t there. Even the city’s last shot at big time
tourism development – Fentier Village – happened because one man looked at a hill and
decided to make a lifetime dream come true.
It is even likely that the earliest Seneca settlers camped out one night at the bend in the
Allegany – most likely just outside Kill Buck – and saw a vision of a long house
community that simply wasn’t there.
Now Salamanca, and the Seneca Nation, needs to dream the biggest dream ever. They
need to develop a long term vision of what their community will become, and for once,
do so in the knowledge that they will have resources to make it happen.
When you have been kicked a lot in the past, it’s hard to see a shining tomorrow. Hence,
there is a real need for an optimism that is based on research, facts and good ideas.
One way to begin is for the City to focus on concentrated development areas within the
community. There are some specific areas which seem to be emerging:
THE CASINO DISTRICT: The
casino area is pretty well defined.
It stretches from the former Mill
Street across the southern city
perimeter to Upper State Park
Avenue. The Senecas plan a lodge
theme that will be closely tied to
Allegany Sate Park, nature, and the
culture of the Senecas. At full
build out, the Senecas may need
stretches of off-site parking within
Salamanca and some kind of
transportation system. Service roads to the facility may also have to be developed.
HIGHWAY DISTRICT: The Highway District extends along Broad Street from Eagle
to Hoag Drive and down Center Street between Hetzel and Washington Streets.
Properties in this area will ultimately see highway strip development, including gas
stations, motels, small chain stores and fast food restaurants. The city’s objective should
be to keep this kind of development within these designated boundaries (or smaller) and
develop some uniform rules, including signage, setback, building materials, landscaping
and aesthetic appeal. Although chains prefer cookie cutter construction, experience has
proven that they will yield to community demands when the community takes a strong
INDUSTRIAL DISTRICT: Salamanca’s industrial district has always run along the
spine of Rochester Street. Now however, it has new advantages as a federal Hub Zone
and state Empire Zone. Industries locating in these zones get significant state and federal
tax breaks, and preferred status when bidding on government contracts. If marketed, it
should very attractive to light manufacturing operations, especially with the added bonus
of low cost municipal electric. To accommodate growth, the City should strongly
considering acquiring and demolishing all of the housing on Elm Street and the
immediate adjoining homes on East State Street. In many instances, it is no longer
economically feasible to rehab these homes, and the City, using federal funds, has already
spent hundreds of thousands of dollars trying to save them. The residents would be better
served by the construction of new low cost housing elsewhere in the city.
MAIN STREET NORTH (THE VILLAGE DISTRICT): This area, running along
Main Street from Elm Street to the Allegany River, should be targeted as the city’s prime
visitor/resident shopping area. In all likelihood, this area will not develop properly
without strong intervention by the city government.
The city must devise extremely strict zoning and building codes and invest in amenities
like street planters, benches, and landscaping. The antique mall co-op has proven to be a
strong visitor attraction, and the City Industrial Development Agency and the Seneca
Nation Economic Development Commission should target its loan resources and
recruitment efforts to further development of antique shopping, as well as boutiques,
outdoor cafes, coffee houses and restaurants. An additional idea to be explored might
include the development of a similar co-op facility for Native American crafts.
The City should also examine all actions it
can take to encourage the development of
second story housing in Main Street
buildings, and convert low-income housing
like the Nies Block to market rate housing.
Rental housing in the downtown district
creates a built in customer base and adds
vibrancy and people to the street.
The rail museum and local history museum will be additional visitor draws. The planned
downtown office building should provide a regular customer base for new retail
A barrier to downtown development is the many smoke shops, which are essentially
warehouse/backroom operations for internet sales. The Seneca must work with the
independent Seneca business owners to achieve a solution. One solution might be the
construction or conversion of an existing building that would provide shared services
such as DS1 lines, internet servers and routers, office equipment and loading docks. The
increased efficiencies would make the smoke shop more profitable, and they would gain
additional income from the rental or sale of their downtown property.
MAINS STREET SOUTH (THE ENTERTAINMENT DISTRICT): This area
encompasses the Main Street commercial area from the Allegany River to Clinton Street.
The Seneca Theater, with sufficient funding, should be able to launch a regular program
of theater and musical entertainment which would be attractive to casino visitors. To
compliment the theater, the City also should encourage the development of entertainment
related businesses in this area. In this area the city should encourage taverns, pubs, pizza
and taco places, galleries, tattoo parlors, dance clubs and live musical entertainment.
Signage in this district should be well lighted and flashy, and the use of neon encouraged.
This district should be designed to become a strong after-shift draw for casino workers,
with Jefferson Street Park as a venue for regular outdoor concerts.
The former Uhl Buick and O’Laughlin Cadillac buildings offer multi-level solid concrete
floors with a range of development possibilities as dance clubs or night clubs. With the
Seneca Theater, they have the potential to be anchors of the entertainment district and
need to be aggressively marketed for such uses.
NEW HOUSING DISTRICTS: The City planning commission needs to carefully
examine where new homes can be built and of what type. There are developing markets
for rental housing, condo and town homes, and upscale housing. But there is also a need
to develop new low and moderate income housing. The City and the Salamanca Housing
Authority should jointly explore the future of that facility. Sale of the land, which is near
the casino, could provide funds for the construction of new and improved housing for
people of low and moderate income. The most frequently mentioned sites for new
housing development are Newton-Drake Run, Upper State Park, Fentier Village, and
PARKWAY DISTRICT: The City now owns what is arguably the most valuable piece
of property in Salamanca: the site of the Salamanca District Hospital. While the building
has little or no value due to asbestos problems, the site is at a strategic location off route
86, a stone’s throw from the Allegany River and at the base of a major entrance to
Allegany State Park. Bluntly stated, this is where the City can take home the prize or
lose the whole game.
In 2001, the Cattaraugus County Economic Development, Planning and Tourism
Department, in conjunction with Saratoga Associates, developed a comprehensive
development strategy for linkages between Allegany State Park and nearby communities.
It look at ways Onoville, Salamanca and Limestone could take better advantage as entry
points for the state park
and its 1.4 million
visitors each year.
In Salamanca, the
planners developed the
concept for “State Park
Village,” a multi-faceted
gateway to Allegany
State Park. It would
utilize the East Race
Street area from Clinton
Street to the expressway
wall and span Parkway
Drive to connect the site
of the hospital. Elements
of the East Race
include a riverwalk, community event pavilion, farmer’s market area, picnic area and
even “luxury” cabins. The elements of the hospital site could include a theater, cultural
and historic center, climbing and rappelling walls, water park, adventure outfitter, park
welcome center and a lodge style hotel and conference center. The complex would
provide complimentary attractions to casino visitors that would encourage them to
lengthen their stay. Using the old Pennsylvania Railroad line, the casino and park
facilities can be connected with a multi-use recreational trail.
Although developed in the “pre-casino” days, the project could become economically
viable with the addition of the casino and its visitors. All or parts or the project could be
developed by New York State, which has established a precedent in building a $17
million convention and conference center in support of the Seneca-Niagara Casino.
Coincidently, the County’s estimated cost of the full project is $17 million. The project
would be a win-win for the State, since it would collect user fees from increased park
visitors and additional slot revenues from more casino visitors. In addition, Western New
York is the corporate headquarters of the nation’s largest park facility developer and
operator – Delaware North Companies. Delaware North has already developed similar
gateway facilities to state parks, and has just opened a 109-room lodge and conference
center at Geneva State Park in eastern Ohio. Private developer ownership of all or part of
the facility would generate additional tax revenues for the city, county and school district.
The city and county should seriously review these plans Whatever projects
and develop a detailed implementation strategy. At a
minimum, Salamanca should put a hold on usage of the
the City might
hospital site until the interest of the State and private choose to pursue,
developers can be determined. the key word is
Whatever projects the City might choose to pursue, the key
word is synergy. Each project needs to build on and
support another project, so that project turn supports another project, and so on.
Development with a true synergy yields benefits for all. It is self-sustaining and yields
further growth and wealth. When a project benefits all, it matters much less who does
what – it only matters that it gets done.
IX. REPORT SOURCES
Casino Gambling in America, Origins, Trends and Impacts, Klaus Meyer-Arendt and Rudi Hartman, Cognizant
Hitting the Jackpot: The Inside Story of the Richest Indian Tribe in History, Brett D. Fromson, Atlantic Monthly Press,
Revenge of the Pequots, Kim Isaac Eisler, Simon & Schuster, 2001
Reports and Documents:
Constraints to the Growth of Native American Gaming, Gambling Research and Review Journal, No. 2, 1996
Economic Development Strategy Linkages Between Allegany State Park and Nearby Communities, Cattaraugus
County Department of Economic Development, Planning and Tourism 2003
Fact Sheet: Positive Economic Impact of the Oneida Indian Nation, Oneida Nation of Indians 2004
Gambling Impact and Behavior Study, National Opinion Research Center at the University of Chicago, 1999
Impact of Gambling, Economic Effects More Measurable Than Social Effects, US General Accounting Office 2000
Impact of Indian Casino Gambling on Metropolitan Green Bay, Wisconsin Policy Research Institute 1997
Impact of the Chinook Winds Casino and Convention Center on Lincoln City, Confederated Tribes of Siletz Indians
Nation-State Gaming Compact Between the Seneca Nation of Indians and The State of New York, 2001
New England Casino Gaming at Foxwoods Resort and Mohegan Sun, Center for Policy Analysis at University of
Massachusetts Dartmouth, 2004
Planning for the Future: Analyzing the Potential Economic Impacts of Class III Gaming on Sullivan County, NY,
Spectrum Gaming Group LLC, June 2004
The Economic Impact of Grand Casino Mille Lacs and Grand Casino Hinckley on Their Surrounding Areas, Nancy
Reeves and Associates, 1996
The Impact of Permitting Limited Gaming at Tribal Facilities on Business Activity in Texas: A Prospective Analysis
Including Regional and Fiscal Consequences, The Perryman Group, 2003
The National Evidence on the Socioeconomic Impacts of American Indian Gaming on Non-Indian Communities,
Jonathan B. Taylor, Matthew B. Krepps and Patrick Wang 2000
The Politics of Indian Gaming in the United States, Katherine A. Spilde, Ph.D., Harvard Project on American Indian
Development, John F. Kennedy School of Government, 2004
The Social and Economic Impact of Native American Casinos, William N. Evans and Julie H. Topoleski, University of
Maryland, August 2002
Selected Web Sites:
American Gaming Association (www.americangaming.org)
Casino Checker (www.casinorchecker.con)
Casino Rama (www.casinorama.com)
Citizens Against Casino Gambling in Erie County (www.nocasinoerie.org)
Delaware North Companies (www.delawarenorth.com)
Economic Development Online, University of Minnesota (www.edo.umn.edu)
Empire Resorts, Catskills, NY (www.empire.netcomsus.com)
Foxwoods Casino Facts (www.tribalnation.com)
Gaming Studies Research Center, University Nevada Las Vegas (www.gaming.unlv.edu)
Hotel Online (www.hotel-online.com)
Indian Country Today (www.indiancountry.com)
National Congress of American Indians (www.ncai.org)
National Gambling Impact Study Commission (www.govinfo.library.unt.edu/ngisc)
National Indian Gaming Association (www.indiangaming.org)
National Indian Gaming Commission (www.nigc,org)
New York State Association of Counties (www.nysac.org)
Seneca Niagara Casino (www.senecaniagaracasino.com)
The Library of Congress (www.loc.goc)
Buffalo Business First
Indian County Today
Middletown (NY) Times-Herald Record
Norwich (CT) Bulletin
Seneca Nation Newsletter
The New York Times
April Vecchiarella, Salamanca City Clerk
Don Rychnowski, Southern Tier West Regional Planning and Development Board
Edward Gimbrone, Salamanca Police Chief
James Brundage, Salamanca Board of Public Utilities
James Griffith, Cattaraugus County Clerk
Jeffery Pond, Mayor of Salamanca
Jeremiah Moriarty, Salamanca City Attorney
Jess Fitzpatrick, Chairman, Cattaraugus County Legislature
Linda Rychik, Salamanca Comptroller
Mickey Brown, President, Seneca Gaming Corporations
Mike Zaprowski, Salamanca Planning Commission
Ray Wilson, Salamanca DPW
Ricky Armstrong, President, Seneca Nation of Indian
Robert DeGaine, Salamanca Fire Chief
Sandra Abrams, Western Door Enterprises
Thomas Sharbaugh, Salamanca Public Library
Tom Livak, Director, Cattaraugus County Department of Economic Development
Tax Immune Parcels as % of Total Tax Levy
Cattaraugus City of Salamanca Salamanca
County School District
City, County, School: Assessed Value to Immune Value Analysis
Total Immune Tax Total Loss as Loss as %
Assessed Value Dollars Tax % of total assessed
Value Lost Levy tax levy value
County 2,80,851,768 8,467,482 428,878 34,722,045 1.24% 0.3045%
Salamanca 46,615.949 8,650,997 416,372 1,035,854 40.2% 18.5%
School 46,597,489 8,351,572 452,068 2,348,423 19.25% 17.9%
Source: Salamanca Comptroller
Anticipated Casino Impact Expenditures
By City Department
Source: Salamanca Comptroller
City Tax Dollars Lost to Immune Parcels: 1990 - 2004
Low - High Projected Local Share in Millions (Allegany)
Year 1 Year 2 Year 3 Year 4 Year5
Low 3.6 5.9 7.9 10.5 19.5
High 6 9.9 13.2 17.2 32.5
Projected Local Share of slot revenues through Year 5 of operations
Daring Decision Pays Richly for Seneca Nation Casinos
By Jim Adams, Indian Country Today, Oneida, N.Y.
Knight Ridder/Tribune Business News
May 26--NIAGARA FALLS, N.Y. -- Cyrus Schindler made one of the biggest gambles
in the dramatic history of Indian gaming, but it wasn'at the slots or gambling tables of
his Seneca Nation casinos.
As president of the Seneca Nation of Indians in 2002, he took a business risk that speeded
the opening of his tribe' first casino by nearly half a year. Its success has cascaded
through the Seneca gaming industry in what could well prove to be a half-billion dollar
swing in its fortunes and in the Western New York economy. It could also show a new
direction for Indian gaming, in which the tribes reap a much larger share of its profits.
Schindler, now chairman of the Seneca Gaming Corporation, described the business
history of the newest and one of the most successful tribal casino chains in an exclusive
interview with Indian Country Today. It involved a controversial high-interest loan from
a Malaysian family, a daring decision to start work on a building the tribe didn'yet
formally own and a construction company willing to work on credit. Above all, it was a
tale of a tribe foregoing the usual management contract and keeping total control of the
A blunt and hearty former ironworker, Schindler talked with Indian informality in the
borrowed office of his Corporation' president, G. Michael ("Mickey") Brown, who he
emphasized was a Nation employee. A tinted window overlooked the musical hum of the
Seneca Niagara Casino gaming floor, whose nearly 3,000 slot machines generate more
than $500,000 in cash a day.
The Senecas are shrewdly exploiting the cash flow here and at their newly opened Seneca
Allegany Casino on their southwestern New York territory, while casino plans for tribes
in the eastern part of the state continue to move forward, although slowly. Their
experience shows the immense advantage of speed in opening gaming operations.
(New York State legislation in 2001 authorized six new tribal casinos, three for the
Senecas in the West and three in the Catskills and Hudson River region north of New
York City. Two existing casinos were operated by the St. Regis Mohawks and the Oneida
Indian Nation, owner of Four Directions Media, which publishes Indian Country Today.)
The Senecas signed a compact with the state in August 2002 after stubbornly excluding
the issues of taxation and land claims settlements that have caused political upheavals in
the Mohawk talks. Every time the state mentioned taxes, said tribal attorney Barry
Brandon, "You would hear the sound of five chairs pushing back from the table."
Schindler noted the irony of talking with Republican Gov. George Pataki after leading tax
protests just four years earlier. He told ICT "[Pataki] says, 'believe in your sovereignty.'
Yeah, and I believe in yours too.' was just fighting him on the Thruway and
And I say, ' I
was arrested, you know, but I put my personal things aside."
The Senecas had raw politics on their side. Republicans had lost badly in western New
York in the 2000 Senate race, said Schindler, and Pataki desperately wanted to show
economically depressed Niagara Falls and Buffalo that he was doing something for them.
He also needed income to shore up a state budget devastated by the 9/11 terrorist attacks.
To sweeten a "revenue sharing" deal amounting to an average 17 percent of the slot drop
over the 14-year life of the compact, he agreed to sell the tribe the financially troubled
Niagara Falls Convention Center and 12 surrounding acres for one dollar.
A little-known provision in the 1990 Seneca Settlement Act made this provision very
attractive. The Congressional Act, which settled the Salamanca lease crisis on the
Allegany territory, set up a compensation fund and provided that any land purchases
made from it would convert to Seneca trust territory in 60 days. The Senecas are hoarding
this fund as "golden dollars," and the chance to put 12 prime acres in trust for only one of
its super-dollars far outweighed the $21 million in outstanding Convention Center bonds
they also agreed to assume.
In spite of intense controversy over the terms, the tribe approved the compact by 101
votes. The performance space in the middle of the Niagara casino floor is named Club
101 after the vote margin.
After the public signing in the shadow of the Niagara Falls Convention Center, the
Senecas announced they would convert the building to their first casino for a New Year' s
Eve opening. This ambitious four-month timetable suddenly became more daunting when
they discovered that the Convention Center roof "was leaking like a sieve." The sealant
could only be applied above 50 degrees Fahrenheit, and as their staff scrambled through
almanacs to find the likely onset of the harsh upstate winter, they discovered they would
have to start work immediately or wait until spring.
But Interior Secretary Gale Norton had not yet approved the gaming compact, nor had
she formally taken the Convention Center land into trust. And without the legal
paperwork or a gaming track record, the tribe was getting turned down by every bank it
approached for financing. In spite of it all, said Schindler, "we started, you know, and we
started. We started."
This decision was only possible, Mickey Brown told ICT, because the Senecas had
decided to run the project themselves instead of turning to a management company.
Schindler said the nation didn'want to pay a 30 percent fee when they realized they
could hire Brown and his experienced network directly. Brown, who previously had set
up the enormously successful Foxwoods Casino Resort for the Mashantucket Pequots in
Connecticut, brought in another crucial contact, the Lim family of the Genting Holdings
casino company of Malaysia.
The patriarch of the family had backed Foxwoods when no one else would, and his son
K.T. negotiated an $80 million loan with the Senecas at 29 percent interest. "It was a hard
pill to swallow," said Schindler, reminding him of the time he started a smoke shop by
maxing out credit cards at 25 percent interest.
But the loan kept the work going, which the Klewin construction company had begun on
faith. Schindler' ironworker background helped, too. As a project supervisor, he had a
reputation for building big bridges on budget and deadline. As a union member, he said
the casino would be union-built and kept excellent relations with the construction trades
council. Work continued up to deadline, and is still going on in parts of the building, but
it opened on time -- and the cash started pouring in.
With resources the Senecas already had combined with the cash flow, they were able to
reduce their reliance on the Malaysian loan, ultimately drawing down only $53 million.
As the slots kept chiming, the Corporation poured the revenue back into projects that
further increased business. It built a parking garage that solved downtown congestion and
produced an immediate surge in attendance. And the cash flow financed the rapid
construction of the Seneca Allegany Casino in Salamanca, which opened debt-free May 1
and is already producing revenue beyond projections.
Now the banks are knocking at the door for a cut of the business. The Gaming
Corporation recently floated a $300 million bond issue at one of the lowest interest rates
a gaming issue has ever reached, and it was over-subscribed by four times the amount.
The funds are financing construction of a brand-new resort hotel project to be connected
to the Seneca-Niagara Casino and which broke ground May 18.
The success is producing problems of its own. The tribe has tried to insulate the casinos
from political pressure by setting up a Seneca Gaming Corporation with three subsidiary
corporations for each of the eventual facilities, but this arms-length effort, said Schindler,
had "pretty short arms." Many in the tribe are asking where their share is, he said.
The tribe distributed per capita payments of $500 before Christmas last year and will
probably make one or two more before the November tribal elections, said Seneca Nation
President Rickey Armstrong Sr. But complaints about economic disparities are beginning
to echo in the local press.
Tribal leaders express their awareness of such issues and are working quickly to ensure
that resources are being directed to tribal programs that will benefit its citizens. Housing
is a primary concern as is elder and child care, and over time (their first casino opened 14
months ago) they said the benefits will become evident and highly visible.
Even so, the nation now has the tangible payoff of two humming casinos and steadily
increasing employment and the prospect of becoming an economic power in western
New York. Schindler said that even his critics are impressed when they visit the Niagara
casino. "They look around and after a minute say, "Man, this looks like a real casino. The
Seneca Nation did this?"
Former Foxwoods boss shapes new N.Y. casino
By BRIAN LYMAN
Originally published Sunday, January 4, 2004
NIAGARA FALLS, N.Y. -- The chart shows a hotel and a giant
entertainment center springing up on the 52 acres around St.
Mary' of the Cataract Church. The buildings are part of the
Seneca Niagara Casino' expansion plan over the next five years.
St. Mary' isn'
s t. Name: G. Michael "Mickey" Brown.
"The church stays," Mickey Brown, president and CEO of the
Seneca Niagara Casino, said with a chuckle in a conference room Jobs: Military lawyer, Vietnam; assistant
behind his office. "God stays. He' exempt." prosecutor, Essex, N.J.; deputy attorney
The buildings rise in several frames along the chart, and some are general for the state of New Jersey;
director, New Jersey Division of Criminal
moving closer to reality: Construction on a 26-story, 600-room Justice; director, New Jersey Division of
hotel nearby will begin in April. Gaming Enforcement; gaming industry
consultant; chairman, Mashantucket
The city is hoping the Seneca Nation' work will transform its
s Pequot Gaming Commission; CEO,
Foxwoods; president, Manhattan
downtown, and if Brown' first year is any indication, the rest of Cruises; president and CEO, Seneca
the structures will be up in the stated timeframe. Niagara Casino.
Brown, former Foxwoods Resort Casino president and CEO, has
been meeting deadlines since taking charge of gaming operations a little more than a year ago, taking
experience gained at Foxwoods in finishing construction quickly and applying it to the new facility.
Under Brown, the Seneca Niagara casino' main building were acquired, renovated and turned into a
gaming facility in a little more than 100 days.
"The lessons I learned (at Foxwoods) were helpful here in completing construction on schedule and
opening," Brown said. "Having done it before, it' easier the second time around."
Seneca Niagara is smaller than Foxwoods and draws from a less populated area, yet it has a natural wonder
of the world a few blocks away that draws tens of millions of visitors a year. Most of those, however, are
international visitors, and casino executives say their customers tend to come from nearby Rochester and
Seneca Nation President Rickey Armstrong said Brown' experience at Foxwoods made him the best pick
"Foxwoods has one of, if not the, premier gaming facility in the United States, I feel," he said. "And it' a
role model for other gaming tribes to look at."
Key role at Foxwoods
As a lawyer and consultant with the Mashantucket Pequots in the late ' and early ' Brown played a
key role in securing $60 million from the Lim family, a Malaysian group of investors, to start Foxwoods.
As CEO of the casino from 1993-97, Brown oversaw Foxwoods' growth into the largest casino in the
Western Hemisphere, while facing increasingly contentious relations with surrounding towns.
Brown said his relationship with the tribe was "very good" during his time. He is close to former Tribal
Chairman Richard "Skip" Hayward -- a framed picture of the two hangs in his office -- and he praises
Hayward throughout an interview as the "true leader" of Foxwoods' development. "Differences of opinion"
with the tribe and Hayward' loss of power, Brown said, led to his resignation in June 1997.
"When (Hayward) was losing his ability to lead, and because of some (other) events, it just wasn'fun any
more," Brown said.
Brown continued to do consulting with gaming enterprises after leaving Foxwoods, and ran a Manhattan
casino cruise line. He started working with the Seneca Nation as a part-time consultant in January 2002 and
helped draft the tribe' gaming compact with New York State.
The relationship with Niagara Falls, where a number of groups lobbied to have the casino placed in the
city, Brown said, is considerably better than relationships with the surrounding towns at Foxwoods.
Niagara Falls, with a large number of hotels and a seemingly equal number of abandoned stores in its
downtown, is counting on the casino as an economic driver; 7,000 people applied for jobs the day Seneca
Niagara opened its employment office.
Newly elected Niagara Falls Mayor Vince Anello, a city councilman for six years, said city leaders are
hoping the casino attracts more development in its downtown, which has lost businesses since the early
1980s. Advocates in the city had pushed for a casino for about three decades, but negotiations didn'begin
in earnest until the '
"It certainly has increased the interest in rental properties, and that' encouraged property owners to
possibly upgrade their properties," Anello said.
The Seneca Nation named Brown president and CEO of its gaming corporation in August 2002. Brown
said the project intrigued him.
"I was interested in working on the development of casino project," he said. "And once I saw the
opportunities here, and calculated in my mind how much fun it would be, I really wanted to do it."
Instead of reporting directly to tribal government, as he did at Foxwoods, Brown reports to the
corporation' board of directors. "It makes the job less political," he said. He does give reports to the Seneca
Tribal Nation' council once a month.
The new CEO brought in a number of former Foxwoods executives, including Al Luciani, Brown' s
predecessor in the Foxwoods' CEO position, who works as director of development for the operation. He
also secured a five-year, $80 million loan from the Lim family for the business.
Funding and personnel in hand, the building was acquired, gutted and renovated in a little over three
months. The speed of construction, said John Pasqualoni, vice president of slots and a former Foxwoods
executive, reflected the boss'personality.
s s s
"He' consistent in his management approach, he' consistent in his operations, he' very demanding, he
knows what he wants, and when he says, 'want it open by such and such a date,' s gospel," Pasqualoni
s t s
said. "He' doesn'back off. And I think that' why we all like working with him."
The casino has 2,900 slot machines and 105,000 square feet of space, and employs 2,100 people. Brown
said it will employ 3,000 once it is fully built. Slot machines are arranged in maze-like fashion around the
building, which looks like a giant airplane hangar and has an aroma of cigarette ash and perfume. One can
walk around the entire gaming floor in five minutes; a similar journey at Foxwoods might take a half-hour
to 45 minutes.
Executives at the Seneca Niagara Casino don'think the casino, which turned a year old Wednesday, will
reach the scale of a Foxwoods or a Mohegan Sun; it competes with the Niagara Casino across the border in
Canada and, fully built out, will have around 4,000 slot machines, compared to the 6,600 at Foxwoods. And
Brown and Pasqualoni said they' both been surprised by the relatively small proportion of Canadian
gamblers in their building.
"We don'have the large metropolitan areas that Foxwoods has," Pasqualoni said. "It' a steady, local
market. As we build and put a hotel on, I envision that market reaching out further."
Everyone, though, is encouraged by the growth of the casino in its first year. The casino averaged well over
14,000 visitors a day in its first year, with the number climbing to 20,000 on weekends.
Armstrong said revenue figures, which Brown declined to share, were better than the tribe expected, and
Brown said the casino is capturing a good portion of the market before it crosses the border.
"We are going to be a destination resort, with people coming to see a pre-existing attraction," he said. "And
there is the absolute support of the community, which is a distinction. People want us here and they like us
here. They' good to us."
Salamanca bets its survival on gambling
Depressed New York border town, 31/2 hours from Pittsburgh, looks to
Sunday, May 02, 2004
By Milan Simonich, Pittsburgh Post-Gazette
SALAMANCA, N.Y. -- In its glory, this town served as a railroad hub, a place where
trains rumbled through at all hours and prosperity was announced with every whistle.
The railcars have mostly vanished and so has the money. Salamanca is so depressed these
days that it does not have a single clothing store. It is home to 6,500 people and two
distinct entities -- the Seneca Nation of Indians and
the state of desperation.
To prevent Salamanca from blowing off the map,
the Indian nation hopes to lure gamblers to town by
the bus load. It' opening its Seneca Allegany
Casino this weekend, unveiling 1,500 slot machines
and 22 poker, blackjack and roulette tables.
As police prepared for a traffic jam, something
Salamanca has not seen in a generation,
townspeople embraced gambling as their salvation.
"It couldn'get any worse economically for this
community. This will be a ray of hope," said Mark
J. Ward, Salamanca' school superintendent.
Police Chief Edward Gimbrone, who has been on
the Salamanca force for 42 years, said he never
thought the Senecas or the town would hitch their
future to gambling. But Gimbrone, like most
everybody else in Salamanca, sees no better
alternative to the casino.
"I really think this is going to be a positive. I
haven'seen any growth in the last 18 years, since
I' been chief," he said.
With Pennsylvania legislators still debating the merits and drawbacks of legalizing slot
machines, the Senecas hope to tap the Pittsburgh market for gamblers. Salamanca is a
31*2-hour drive from Pittsburgh, and a bit closer to Cleveland, Akron and Youngstown.
Seneca tribal leaders are advertising in those cities, hoping to induce gamblers to take day
trips to western New York.
The Senecas are experienced in the casino business, which they prefer to call "the
hospitality field." They already operate a casino in Niagara Falls, N.Y., where they
control 52 acres on the American side of the U.S.-Canada border.
As a sovereign nation, free of New York laws that otherwise restrict casino gambling,
they struck gold there. The Seneca Niagara casino turned a profit of almost $50 million in
its first nine months, generating enough cash flow to launch the Salamanca venture
without any borrowing.
For now, the casino on Seneca territory in Salamanca is housed in a temporary building
of 122,000 square feet. Its exterior is the color of a dill pickle. Inside, the casino has the
look of a field house, not a gambling palace. Only the carpeting, a garish mix of red,
orange, purple, blue and lime, is reminiscent of Las Vegas decor.
But if the slot machines start turning a profit, the building will be replaced by a grander
casino. Rick Armstrong Sr., president of the Seneca Nation, said a hotel and perhaps a
golf course also would be part of the Salamanca gambling complex. A spa and boxing
matches could be added to the casino' diversions.
Even with such lavish plans, the Senecas concede that they want to keep most customers
inside the windowless casino. Free alcoholic drinks will be provided to anybody who is
gambling, an approach pioneered in Nevada gambling halls.
Armstrong said the flow of alcohol had not created any problems in Niagara Falls. He
said his casino staff, augmented by law enforcement details from the Cattaraugus County
Sheriff' Department, will keep the area safe for guests and motorists.
To open their casino, the Senecas hired about 900 card dealers, slot mechanics,
waitresses, cooks and parking attendants. It marked the biggest economic lift in
Salamanca since the railroad industry went into steep decline in the late 1970s. Most of
the casino jobs will pay little more than minimum wage, but the operators say the
potential for tips is excellent.
The Senecas hope Salamanca' casino will draw 7,500 gamblers a day. Cyrus Schindler, a
tribal counselor, said the number is realistic because the new business is positioned to
pick off plenty of tourists.
Allegany State Park abuts the town. It brings campers and outdoorsmen to the region, and
many of them would enjoy a taste of nightlife, Schindler said. Skiers congregate in
upscale Ellicottville, about 10 minutes away. The Senecas expect them to help keep the
casino busy in wintertime.
"There is no industry in New York anymore. Everything is imported," Schindler said.
"We see this casino as a steppingstone to more development."
The Senecas, for instance, are interested in building a garbage-burning power plant.
Casinos may provide the money to make such an undertaking possible.
For the immediate future, though, the Salamanca casino' best feature is that it gives hope
to a dying town, school Superintendent Ward said.
"I don'think there' a store here where you can buy a pair of underwear, crude as that
sounds," he said.
Like necessities, entertainment has been nonexistent in Salamanca.
"It' awful to say this, but you see people get a six pack and sit on the bridge," Ward said.
He said impoverished families had congregated in Salamanca because of inexpensive
housing and cheap utilities. If he has a fear about the casino, it' that it could drive up the
cost of housing, thereby displacing people stuck in low-wage jobs.
Land speculation already has begun. Wealthy people are buying up properties in
anticipation of a boom caused by the casino.
Still, Ward calls gambling "a tremendous opportunity" with the potential to bring money
Under its agreement with New York, the Seneca Nation will pay state government 15
percent of its net revenue from slot machines. Salamanca Mayor Jeffrey Pond and the
school system are lobbying to increase that amount to 25 percent, identical to the
breakdown for the Niagara Falls casino.
The money is funneled back to local governments, helping them cope with any costs
attendant to the casino, such as the need for more law enforcement officers or
Seldom has a casino development been met with such open arms. Even Atlantic City,
N.J., a beachfront pockmarked by slums, faced vigorous opposition when it legalized
casinos in 1978. Other than summer tourists, Atlantic City had no economy to speak of
until the casinos arrived.
Vice, in the form of cut-rate cigarettes, had created the biggest excitement in Salamanca'
economy until the casino.
Cigarettes sold on the Seneca Nation are free of state and federal taxes, creating a savings
of up to $16 per carton. This phenomenon spurred Internet cigarette dealing from
abandoned city storefronts and led to criminal investigations of other salesmen evading
Nothing will be secretive about the casino, a core of the 7,200-member Seneca Nation'
"For years, we depended on federal grants," Schindler said of the nation. "But the grants
are drying up."
If the casino proves profitable, the Senecas may become an economic force strong
enough to diversify into other enterprises.
Brian Hansberry, a 26-year casino veteran hired to manage the Salamanca operation, said
he was optimistic. He has worked in gambling towns from Atlantic City to Lake Charles,
La. He thinks this one can make it.
The stakes are high. Ward said he did not believe gambling was a panacea, but that it'
the only hope for his town.
If the casino falters, he said, Salamanca will die an agonizing death.
Copyright ©1997-2004 PG Publishing Co., Inc. All Rights Reserved.
From the January 5, 2004 print edition
Falls still awaits private sector investment
One year after the debut of the Seneca Niagara Casino, there is no doubt the Niagara Falls, N.Y., gaming
venue is a success.
The casino is drawing larger than anticipated crowds, sometimes swelling to 20,000 per day on weekends
and in 12 months has hired 2,158 workers, making it the region' 19th largest employer. That places it
ahead of Moog Inc., Roswell Park Cancer Institute and Ford Motor Co.
Yet, step a few blocks from the casino' hub along Fourth Street and little has changed. Private sector
investment has been limited and outside the casino and its related developments, the largest construction
project going on in Niagara Falls is USA Niagara' $17 million investment in a convention and conference
That has become the conundrum in Niagara Falls.
No one questions the casino' success, only whether the infusion of new money has worked its way into
Niagara Falls' south end.
Many look across the Rainbow Bridge and expect the same rapid-fire development in Niagara Falls, Ont.,
to happen in Niagara Falls.
Optimists say economic development lightning can strike again. Others aren'so sure.
Still, others say it is way too early to judge the long-term impact of the Seneca Niagara Casino.
"There' definitely more people walking around here," said Joseph Sanelli, general manager of Four Points
by Sheraton-Niagara Falls hotel on Buffalo Avenue. "The casino is bringing more people and that gives us
more chances to make money."
While Casino Niagara in Niagara Falls, Ont., opened in late 1996, it wasn'until two-plus years later that
the economic boom really took hold in the city. Niagara Falls, Ont., has never looked back.
"We' only one year old, we' still an infant," said G. Michael "Mickey" Brown, Seneca Niagara Falls
Gaming Corp. president.
Infant or not, the Seneca Niagara Casino made an impact. Consider:
• Original projections had the casino attracting 3 million people during its first year.
The projections were wrong.
The casino drew 4 million in its first year, a 33.3 percent increase above projections.
• The casino is attracting between 10,000 and 12,000 people on weekdays and 20,000-plus on
• Attendance has grown steadily.
More people went to the casino in October than in July.
"We' immune to seasonality," Brown said. "One of our more pleasant surprises has been the increase in
our volume of business."
• The bulk of the casino patrons come from Erie and Niagara counties, but it draws significant
crowds from such cities as Albany and Cleveland.
Sometime after New Year' the Seneca Nation will be writing a check to New York in the
$40 million range for the state' share of the slot machine winnings. The slots have churned
out about $200 million in winnings.
Original estimates had the state' share falling to about $30 million.
The casino itself has reportedly generated about $4 billion in total revenues.
Niagara County is slated to receive $10 million from its share of the casino take. How that money will be
disbursed is still debated.
• Of its 2,100-plus workers, some 302 are Native Americans including 102 from the Seneca
The casino' total payroll is about $60 million plus another $18.5 million in benefits.
Hotel occupancy is increasing, a factor many attribute to the casino' presence.
According to Smith Travel Research of Nashville, Tenn., hotel occupancy in the Cataract City rose 2.5
percent in October, going from 47.5 percent last year to 50.6 percent this year.
"There' more people here this winter than last year," Sanelli said. "Normally, you wouldn'see that much
traffic around here in the winter."
Brown said he attributes the casino' success to the months before it opened and the momentum that was
building as crews were converting the former Niagara Falls Convention Center into the gaming venue -
something that took less than 100 days and cost $100 million.
For Niagara Falls, the casino represents the largest construction project since the power plants were built 40
The casino is just the first part of a multi-phased effort that will eventually see as many as three hotels built
plus a conference center and more parking ramps. Ground is expected to break in April for the first of the
hotels; all are expected to open within the next few years.
At the same time, the Seneca Nation will be opening a second casino - this one in Salamanca on April 1.
The Seneca Allegheny Casino will feature 1,500 slot machines and 20 table games among its 48,000-
square-feet plus a bingo hall with a 500-person capacity.
Also under consideration are casinos in Erie County and possibly, a fourth in the Catskills.
Brown said he remains confident that private sector investment will eventually take hold in Niagara Falls.
"Our presence here will encourage more development," he said.
Robert Newman, Niagara USA Chamber president, agrees that private sector-fueled investment will come.
Newman points to traffic generators such as the new convention center and the on-going casino
developments as engines to drive future projects. Individually and collectively, they are expected to attract
a critical mass on top of the 8 million or so annual visitors to the falls.
"It will take time, but things will turn around," Newman said. "The casino is doing its part. They are
bringing in 10,000 people a day; now the burden is on us to build off of that."
Niagara Falls has seen some private sector investments take hold. This past summer, the Cordish Co,
opened the first phase of the $8.5 million "Theater in the Mist" project next to the Hard Rock Cafe on
Prospect Street. The second phase will open in time for the summer season.
Others like prominent Buffalo developer Carl Paladino are considering other projects in Niagara Falls.
"The casino is a big draw, but it is not going to solve all of our problems," Newman said. "What happens in
the city is up to us, not the Seneca Nation. The casino is a great community partner but it doesn'owe this
community anything. We need our own self-help here to benefit from its presence."
© 2004 American City Business Journals Inc.
Study Says New Sullivan County, N.Y., Casinos Will
By Steve Israel, The Times Herald-Record, Middletown, N.Y.
Knight Ridder/Tribune Business News
May 17--MONTICELLO, N.Y. -- Eighteen thousand new workers -- in a county that already has 30,000.
Five thousand new students -- in county with schools already packed -- 2.7 million more cars, most on an
already jammed Route 17. And 2,000 new problem gamblers, along with 100 percent more bankruptcies.
The three Indian casinos planned for Sullivan County will change the lives of many Hudson Valley and
Catskill residents. That' the inevitable conclusion of last week' 140 page study prepared for the county by
the casino consulting group Spectrum Gaming.
"Casinos will impact every aspect of Sullivan County' social, economic and public infrastructure," it says.
Most of those impacts will be positive, according to Spectrum, which does work for the casino industry.
But the three Indian casinos allowed by law also mean enormous challenges.
How will the county educate 5,000 new students when its schools are already full?
How will its jam-packed roads handle tens of thousands of new cars per day?
And how will Sullivan preserve its open spaces when the study says it will need 9,000 new housing units?
As Sullivan lawmakers figure out how to plan for a future that could include three of the world' biggest
casinos, they must get their arms around the meat of the study.
Here it is:
--12,000 from the casinos, 6,000 more casino-related jobs in a county with 30,000 jobs.
--A population increase of 30 percent.
--The average casino salary in the country is $27,000 according to the study.
"The initial wave of hiring by casinos will pull many workers from existing jobs creating vacancies that
might have to be filled by offering higher salaries," the study says.
--4,914 new public school students, the children of casino workers.
--A 43 percent increase in total enrollment in a county where just about every district is at capacity.
--The average cost per pupil with projected state aid cuts: $7,997.
--Money to be raised locally per year to pay for the increase in students: $33.6 million.
"A large portion of available impact fees (from the tribes) will need to flow to the school districts with
growing student populations so that these communities will not face undue increases in local property taxes
and [will] think positively about the new housing that an expanding workforce will require."
CRIME, LAW ENFORCEMENT
--Need 40 new police officers, at a cost of $2.4 million.
--Need nine new police vehicles per year: $225,000.
"While Sullivan County cannot expect that casino gaming will increase crime rates on a per capita basis,
the county and its municipal services can expect that the increased visitation is likely to increase the
demand on law enforcement services in areas ranging from traffic violations to petty crimes."
--2,025 new problem gamblers, based on national averages.
--Bankruptcies: 100 percent higher than in counties without casinos.
(Problem and pathological) gambling "potentially increasing the demand for social services within Sullivan
COUNTY, LOCAL SERVICES
--Population could rise 30 percent.
--The number of workers will increase by 36 percent.
"These major increases both in resident and tourist populations will be accompanied by increases in every
form of daily activity: travel, planning board meetings, land development, construction, shopping,
emergency calls, doctor visits, civil litigation, criminal behavior.
Parks, lakes and streams will be more heavily used. Hospital wards and fire stations may suddenly be too
small. With the number of dwelling units increasing over time by more than 21 percent, more staff time
will be required by building inspectors, tax assessors and tax collectors. More people, almost by definition,
will mean more 911 calls and more crime. Social service agencies will be more burdened as well."
BENEFITS AND COSTS
--Casinos would spend $135 million per year on local goods and services.
--County sales tax revenues would increase by 26.2 percent.
--Revenues from $15 million per year payment from three tribes, plus new jobs and taxes from commercial
growth: $73 million.
--Casino costs to the community: Education, $33 million; county and local services $32 million. Total
costs: $65 million per year for three casinos.
--The county actually comes out about $8 million ahead, according to Spectrum.
"But costs could rise dramatically," warned Spectrum consultant Ken Platt.
TRAFFIC AND TOURISM
--8.5 million casino visitors per year, compared with 1 million visitors to Sullivan today.
--50,000 casino visitors per day during peak periods.
--12,000 workers driving to and from the casinos every day.
--90,000 casino buses per year.
--2,739,000 casino-bound cars per year.
--80 percent of casino traffic on Route 17.
"Development of three casinos in Sullivan County will have a substantial impact on traffic and area
ABOUT THE STUDY: This study assumes that the three Indian casinos would pay $15 million each per
year in impact fees to Sullivan County since they won'pay taxes. Two of the tribes, the St. Regis
Mohawks and the Stockbridge-Munsee Band of Mohicans, have agreed to the $15 million. The Cayuga
Nation of New York has a $5 million deal that has won preliminary approval from the Bureau of Indian
Affairs. If the $5 million deal wins final approval, the other two tribes could renegotiate their deals.
(c) 2004, The Times Herald-Record, Middletown, N.Y. Distributed by Knight Ridder/Tribune Business