Where'd Hochul get the Buffalo Bills stadium money? NY forces $564M in casino payments
When Gov. Kathy Hochul announced Monday that New York was ready to put up $600 million toward the $1.4 billion cost of a new Buffalo Bills stadium, she was talking football after a weekend spent playing hardball with the Seneca Nation.
And that hardball brought a Buffalo windfall, to the tune of $564 million.
A subpoena last Friday froze Seneca bank accounts and forced an end to a years-long dispute over revenue-sharing funds.
Hochul said the state's share — more than $418 million — would go to the new Bills stadium. The rest would go to governments in Western New York near three Seneca casinos: Seneca Niagara Resort & Casino in Niagara Falls, Seneca Allegany Resort & Casino in Salamanca, and Seneca Buffalo Creek Casino in downtown Buffalo.
"I thank President (Matthew) Pagels and the Nation leadership for fulfilling their commitment to the people of New York," Hochul said in a statement on Tuesday announcing the windfall. The governor sought to put the best face on it, hailing the 10,000 jobs the new Bills stadium would create.
But where Hochul saw progress, the Senecas saw government over-reach.
The Nation issued a statement of its own Tuesday, announcing the transfer of $564,842,625.20 covering revenue-sharing from January 2017 through December 2021. That's the state's cut of revenue from certain slot machines at the casinos, collected at a rate of 18% to 25%, part of the gaming compact between the parties dating back to 2002.
'Act of blatant aggression'
The Seneca statement railed against the way the resolution came about.
"The accounts were unjustly targeted and frozen by in (sic) act of blatant aggression by New York State late last week, despite the State’s knowledge that the Nation’s secured account held more than sufficient funds to satisfy any Compact-related matters," the statement read.
The frozen accounts imperiled services to the Nation, the release said, "to the Seneca people, as well as the lives and livelihoods of thousands of Seneca and non-Seneca individuals and families across Western New York."
Tribal leaders had warned its members not to try to cash checks over the weekend.
Seneca spokesman Phil Pantano would not go beyond the statement, or discuss if the Hochul move would generate bad blood when negotiations resume over a new revenue-sharing compact.
But Pagels didn't hold back, offering a stinging rebuke of the process, of Hochul, and even of Hochul's husband.
“New York’s hostile and shameless greed was laid bare for the world to see yesterday," Pangels said in a statement Wednesday. "After intentionally and unnecessarily holding the Seneca people and thousands of Western New York people and families hostage for several days by strangling various bank accounts held by the Seneca Nation and our businesses, Governor Hochul was quick to boast about using her Seneca ransom money for a new stadium."
And Pagels didn't stop there. He also took aim at Bill Hochul, the governor's husband, who is senior vice president and general counsel for Delaware North, which runs concessions at the Bills’ current home, Highmark Stadium, in Orchard Park, New York.
Delaware North could reap big dividends if the Buffalo business keeps feeding Bills fans in the new stadium.
"I’m sure that was welcome news to the governor’s husband, whose company not only operates video lottery terminals within the Seneca Nation’s supposed gaming exclusivity zone with the state’s blessing, but the company will also make millions of dollars in concession business inside the state-owned stadium. And it’s being paid for on the backs of the Seneca Nation. Quite a sweetheart deal."
The governor’s new stadium won’t be a product of progress, Pagels said.
"It will be a monument to Albany’s vindictive desire to punish the Seneca people," he continued. "Unfortunately, it’s something we’re all too familiar with.”
Pagels had issued a clear demand for New York State to begin Compact discussions with the Seneca Nation.
“Don’t use the people of Western New York as pawns in your obvious desire to destroy the Seneca Nation,” he said. “You have an obligation under federal law to negotiate a Compact with the Seneca Nation in good faith. Honor it.”
A deal in the works
After years of litigation, arbitration and rulings against the Senecas, the dispute seemed to be drawing to a close on Jan. 12, when the tribe dropped its lawsuit and said it would begin making casino payments again.
Leaders of the Nation said they would pay the amount in arrears and resume payments going forward.
Pagels, the Seneca president, said he looked forward to working on a new gaming compact to replace the one expiring in 2023.
"Now is the time to move forward,” he said at the time.
But in February, the Seneca Nation Council paused payments, awaiting a ruling from the National Indian Gaming Commission, a federal agency that had been reviewing the situation.
Earlier this month, the state issued a payment demand and the gaming commission closed its investigation. As the Senecas reviewed the commission's report, New York filed a court motion to seize the escrow funds and issued a subpoena for information to KeyBank regarding other tribe accounts. That subpoena froze the accounts and led to Tuesday's resolution.
It has been a long legal battle.
The funds had been collecting since Jan. 1, 2017: 18% to 25% of the revenue generated by certain slot machines at the Nation's three casinos in Western New York, a whole lot of pennies, nickels, quarters and dollars slid into slots.
The Senecas pointed to 2016, when the gaming compact automatically renewed. They claimed that a U.S. Department of Interior letter had raised some doubt about whether revenue had to be shared after automatic renewal. The state was adamant that the deal, which provides millions to the state and local governments, was still in effect.
An arbitration panel agreed with the state and ordered the tribe to turn over the disputed funds. In November 2019, U.S. District Court Judge William Skretny sided with the arbitration panel.
The Senecas appealed that decision to the U.S. Court of Appeals, which sided unanimously with Skretny, making a successful appeal to the Supreme Court of the United States unlikely.
Reach Peter D. Kramer, a 34-year staffer, at firstname.lastname@example.org or on Twitter at @PeterKramer.