Catskills plan for Indian casino resort is revived

Cayugas involved in $500 million project 90 minutes from New York

April 13, 2003|By Charles V. Bagli | Charles V. Bagli,NEW YORK TIMES NEWS SERVICE

NEW YORK -- Many people in the Catskills thought Robert A. Berman's dream of building a $500 million casino at the Monticello Raceway had died -- just like every other scheme to resurrect the faded resort area once known as the borscht belt -- when he lost his Indian partners three years ago.

But Berman resurfaced, signing a definitive agreement recently to build a casino next to the aging track in partnership with the Cayuga Nation, a tribe that has traditionally opposed gambling.

The partners have an application with the federal Bureau of Indian Affairs to allow Alpha Hospitality, which owns the racetrack, to transfer 30 adjacent acres to the tribe. The company would develop a casino resort with hotels, restaurants and shops on that land.

"From the first day we got involved in this nine years ago, we wanted to bring casino gambling to the Catskills and revitalize the area," said Berman, who grew up just outside the village of Monticello and is chairman of Alpha. "Our intentions never changed."

Clint Halftown, a leader of the Cayugas, a federally recognized tribe that does not have a reservation, was enthusiastic about the plans after a three-year tribal debate over gambling. "The Cayuga people have been landless and in economic distress for over 200 years," he said. "Our people need housing, education, medical care and the means to keep links to our culture and land. A casino would bring economic life back to Sullivan County as well as our nation."

A treacherous road

But the road to gambling has proven treacherous in New York, where there are battles among casino operators, intertribal rivalries and a constitutional challenge to the October 2001 legislation authorizing Gov. George E. Pataki to negotiate with Indian tribes for six casino resorts, three in western New York and three in the Catskills. So far only one has opened, the Seneca Niagara Casino in Niagara Falls.

There has been little progress in the Catskills, which everyone agrees is potentially the most lucrative location because it is only 90 miles from New York City.

The greatest ally for those who favor gambling may be the weakening economy of the state, which faces an $11.5 billion budget gap and is borrowing $600 million against the projected revenues from the six casinos.

"I find the governor's lack of progress regarding casinos in the Catskills somewhat incredible since they would be big money generators," said Assemblyman Jake Gunther, a Democrat who represents Sullivan County. "It's a paradox."

State Sen. John J. Bonacic, a Republican from New Paltz, agreed. "Progress has been incredibly slow," he said. "We have been encouraging the governor to negotiate with the tribes and put a Catskill casino on the fast track."

Berman started planning an American Indian casino in 1994. He said he first approached the Cayuga tribe, but they were not interested in gambling. His group, then known as Catskill Development, signed an agreement with the St. Regis Mohawks, beginning an arduous four-year effort to gain federal approval.

In April 2000, the Bureau of Indian Affairs granted the project tentative approval. But a week later the Mohawks renounced their partners and signed an unusual and exclusive arrangement with Park Place Entertainment, the largest gambling company in the world, in exchange for a $3 million loan. That sparked a bitter legal battle that continues.

Cayuga views

Trying to revive the project at the raceway, Berman went back to the Cayugas, but once again they rejected a casino as antithetical to Indian values. However, the debate within the tribe continued.

"For a long time our nation was anti-gaming," Halftown said. "We always sought resolution of our land claim and monetary damages. We've been in litigation for 23 years, and I don't know how much longer it'll go on. Now we have to explore other possibilities that can bring economic prosperity to our nation."

But Berman and his partners also had to deal with internal problems of their own. Alpha Hospitality's founder, Stanley S. Tollman, and four other men were indicted a year ago on tax- evasion charges in connection with a separate hotel company. Tollman is now a fugitive living in London.

Berman, who became chairman of Alpha last year, said the company removed Tollman and the others from their posts and converted their stake in Alpha into a passive interest to satisfy regulators and allow Alpha to continue.

The Cayugas and Alpha planned to file an application with the Bureau of Indian Affairs that is similar to the one that won federal approval in 2002.

Federal officials say the application could move relatively quickly. "If it's essentially the same application, it will make things easier," said George Skibine, director of the Indian gaming office at the Bureau of Indian Affairs.

A state official who spoke on the condition of anonymity and who is involved in talks with Indian tribes said he viewed the Cayuga proposal for a Catskill casino as encouraging.

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