Niagara Gazette

Local News

February 25, 2013

State to forward $2.5M to Salamanca until Seneca dispute ends; no similar deal for Falls


Niagara Gazette — This will be the second time that Salamanca has received an injection of cash from the state since the Senecas stopped making payments to New York in 2010, contending that the state was violating the gaming compact's exclusivity clause. Salamanca received a $5 million advance of its casino funds in 2011. About $20 million has been withheld from Salamanca during the dispute.

Mayor Paul Dyster said the state has made offers to help the city, pointing to an offer from the New York Power Authority to accelerate aid from the Niagara Power Project relicensing agreement.

The offer would have a delivered a lump sum payment to the city of $13.4 million, converted from the $850,000 per year the city receives from NYPA as part of the relicensing agreement. The city would receive $37.4 million over the remaining 44 years of the agreement, but the spin up would also include a clause that would allow the city to repay the money and return to the original agreement.

That deal was declined by the Niagara Falls City Council in November. Some council members characterized the deal as a one-time cash grab that would put the city at risk of losing out on the long-term benefits of the agreement.

Dyster said the offer was made with the understanding that the arbitration would conclude by mid-year, as sources close to the situation have maintained, meaning the money would be available to repay the power authority and return to the original agreement. And if the arbitration concludes as expected or is settled out of court, the Falls could avoid cash flow issues without using any of the NYPA money.

"The NYPA deal was intended as a way of filling a gap in the 2013 budget," Dyster said.

By including anticipated casino revenues in the budget the city reasserts its right to the approximately $60 million it is owed, Dyster said.

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