Niagara Falls pulls for jackpot

Casino: Officials think one run by the Seneca Nation could solve many of the woes of the New York town. But it's not a done deal.

May 28, 2002|By Mike Adams | Mike Adams,SUN NATIONAL STAFF

NIAGARA FALLS, N.Y. - Eddie Gadawski remembers when East Falls Street was the center of life for a bustling ethnic community called Tunnel Town that supplied the workers who built hydroelectric tunnels under the city.

Today, the street sits in a sea of urban blight stretching more than a quarter-mile west toward the Niagara Falls Convention Center. Gadawski's restaurant and the 100-year-old Holy Trinity Roman Catholic Church are all that's left of the neighborhood's working-class roots.

With Niagara Falls on the verge of bankruptcy, Gov. George E. Pataki and local officials are betting that a casino run by the Seneca Nation will become the city's economic savior. On May 14, the Senecas voted in a referendum to approve a compact with the state enabling the tribe to own casinos in Niagara Falls and Buffalo.

The 14-year deal could bring $1 billion or more to the tribe, and the state would get up to 25 percent of slot machine revenue. Pataki wants the new revenue to offset the financial burden created by the Sept. 11 terrorist attacks. He also maintains that the state is losing tens of millions of tourist dollars to Canadian casinos, including a large one in Niagara Falls, Ontario.

Currently, 201 American Indian tribes run gambling operations in 29 states that gross about $10.6 billion annually. Indian gaming is regulated by federal legislation enacted in 1988.

The New York deal sidesteps a state law banning casinos and takes advantage of the federal law, which permits them on Indian-owned land. That doesn't bother Gadawski.

"Something has got to happen because the city is going down," he said. "We've got to have something to bring people in and make money, and maybe cut taxes."

When Gadawski looks at East Falls Street today, he sees decaying buildings and large expanses of open space created when buildings were razed and the land left bare. A neighborhood soup kitchen serves 50 to 100 people daily and holds Narcotics Anonymous meetings three times a week.

"We had the Polish, the Italian, the Spanish, the Armenian and the colored," said Gadawski, 82. "We had everybody, all ethnic people lived here. And we had a lot of businesses. Now when I look around, I see nothing; nothing's here anymore."

Once known as the honeymoon capital of the world, Niagara Falls has suffered from fiscal mismanagement, poor planning and the loss of thousands of industrial jobs that were the backbone of the economy. Long a two-fisted union town and the turf of legendary mob boss Stefano Magaddino, it had 102,394 residents in 1960, and just 55,593 in 2000. Last year, city taxpayers were hit with a 15 percent tax increase to cover red ink. The town's history also includes Love Canal and a long list of failed economic development projects.

The view west from Gadawski's restaurant says much about Niagara Falls' past, its present and perhaps its future. The 520-foot-high Skylon tower dominates the skyline, but it stands on the Canadian side where Casino Niagara has fueled an economic boom. The tower gives tourists a panoramic view of the falls.

Since the casino opened six years ago, it has sparked more than $1 billion in development in Niagara Falls, Ontario, and helped to send the number of tourists soaring from 8 million to nearly 14 million. More than 10,500 hotel rooms are on the Canadian side, and about 3,400 on the New York side, which draws about 8 million tourists annually. Tourists tend to pass through Niagara Falls, N.Y., while they linger on the Canadian side and spend more money.

Canadian officials report that Casino Niagara grosses about $32.5 million a month in U.S. dollars. The casino is located in a temporary site near the Rainbow Bridge that has about 100,000 square feet of gaming space for table games, such as blackjack, roulette and baccarat, and more than 2,700 slot machines.

Last year, the Canadians broke ground on an $800 million project that includes a permanent site for the casino, a 368-room Hyatt Hotel, an upscale health spa and a 1,200 seat outdoor concert amphitheater.

Shortly after the Senecas approved the compact with the state, Pataki flew to Niagara Falls International Airport to trumpet the deal. The governor said casinos are "very important in allowing New York to compete fairly with Canada," adding, "We want to see the same kind of investment here in Niagara Falls, New York."

Pataki said if things go smoothly, the Niagara Falls casino could be operating at a temporary site - the state-owned Niagara Falls Convention Center - by year's end.

There are indications that Pataki might be overly optimistic. A lawsuit filed by religious and civic interest groups questions the constitutionality of the state's casino deals with Indian tribes. Asked about the lawsuit, Pataki said, "I get sued a dozen times a day. There are those for their self-interest, whether it's from Canada or elsewhere, who don't want Niagara Falls to compete. We're confident that the legislation and the constitutional provisions are solid."

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