GEORGE A.

BORDEN
(202) 434-5563
gborden@wc.com

July 17, 2015

By FedEx
Mark D. Gearan
Chairman
New York State Gaming Commission
One Broadway Center
Schenectady, New York 12305
Kevin Law
Chairman
Gaming Facility Location Board
One Broadway Center
Schenectady, New York 12305

Re:

Lago Resort & Casinos Application for a Gaming Facility License

Dear Chairmen Gearan and Law:

We write on behalf of the Oneida Indian Nation (Nation) concerning a very significant
new development that renders Lago Resort and Casino (Lago) ineligible for a casino license
and nullifies its application to the Location Board.
On July 10, 2015, the Fourth Department ruled that the Town of Tyre failed to comply
with the State Environmental Quality Review Act (SEQRA) in issuing a negative declaration
concerning the proposed Lago casino.1 The court annull[ed] the negative declaration and
1 See Ex. 1 (Dawley v. Whitetail 414, LLC, No. CA 15-00089 (4th Dept July 10, 2015)
(Dawley)).

Mark D. Gearan, Chairman, New York State Gaming Commission

Kevin Law, Chairman, Gaming Facility Location Board
July 17, 2015
Page 2
vacat[ed] the site plan approval and all related resolutions.2 The related resolutions vacated by
the court include the Town of Tyres resolution of support for the casino, the Towns approval of
the Host Community Agreement with Lago, the Towns approval of the Lago development plan,
and the Towns re-zoning of the Lago property. All of those resolutions were issued by the
Town of Tyre on June 12, 2014, the same day as the Towns negative declaration. See Exs. 2-7
(resolutions). All of those resolutions were predicated on SEQRA compliance. See generally
Ex. 3 (Development Plan Resolution) at 1, 2 & 3; Ex. 4 (Zoning Resolution) at 1 & 2; Ex. 5 (Site
Plan Resolution) at 1; Ex. 6 (Host Community Agreement Resolution) at 1; Ex. 7 (Casino
Support Resolution) at 2. And all of those resolutions were challenged in the Dawley action and
nullified by the Fourth Departments decision. Ex. 8 (SEQRA Verified Petition) at 22-23; Ex. 1
at 2.3
The appellate courts decision has brought Lagos project to a halt.4 It also means that the
basis for the Location Boards selection of Lago is eviscerated and that Lago is disqualified from
consideration for a gaming license.
A.Lago Is Disqualified Because It Lacks a Valid Resolution of Support from the
Town of Tyre.
As discussed above, the Fourth Departments decision nullified the June 12, 2014
resolution of support from the Town of Tyre that Lago submitted with its application to the
Location Board. As a result, Lagos application to the Location Board is disqualified because it
lacks the required demonstration of local support.
Section 1314(2) of the Racing, Pari-Mutuel Wagering and Breeding Law (Act) requires
that, [a]s a condition of filing, each potential license applicant must demonstrate to the boards
satisfaction that local support has been demonstrated. Id. (emphasis added). Similarly, 9
N.Y.C.R.R. 5300.1(f) provides that an applicant shall . . . demonstrate local support by
submitting to the board a resolution passed after November 5, 2013 by a majority of the
membership of the local legislative body of the host community supporting the application. Id.
Section IX.A.1.a of the Location Boards Request for Applications (RFA) required that as a
condition of acceptance of this Application, local support must be demonstrated through a postNovember 5, 2013 vote of the local legislative body of each Host Municipality. RFA IX.A.1
2 Id. at 2.
3 The Seneca County Industrial Development Agencys (IDA) February 12, 2015 award of tax
benefits to Lago also was predicated on satisfaction of SEQRA, and also has been nullified as a
result of the Fourth Departments decision.
4 Ex. 9 (Jon Campbell, Lago casino construction suspended, Press & Sun-Bulletin (July 13,
2015)).

Mark D. Gearan, Chairman, New York State Gaming Commission

Kevin Law, Chairman, Gaming Facility Location Board
July 17, 2015
Page 3
(emphasis added). And the Location Boards June 10, 2014 Questions and Answers for
Applicants made clear that a condition of filing an Application is that each Applicant submit to
the Board a post-November 5, 2013 resolution passed by the local legislative body of the Host
Municipality that supports the Applicants proposed Gaming Facility within their jurisdiction.
Resolutions of Support Q & A (June 10, 2014) at 1, Question 208 (emphasis added).
Here, the June 12, 2014 resolution passed by the Town of Tyre (Lagos host community)
is null and void as a result of the Fourth Departments decision. As a result, Lagos application
to the Location Board lacks a required condition of acceptance, RFA IX.A.1, and Lagos
application must be disqualified.
B.

Lago Is Disqualified Because It Lacks a Valid Host Community Agreement.

The Fourth Departments decision also nullified the Host Community Agreement
between Lago and the Town of Tyre. Lago relied exclusively on the terms of the Host
Community Agreement in its application to support its claim that it was mitigating potential
impacts on local communities. See Lago Application Exhibit IX.A.3 (Host Community
Agreement). Similarly, the Location Board relied on the terms of the Host Community
Agreement in selecting Lago. See Location Board Report (February 27, 2015) at 32 (The Board
finds that Lago presents a complete analysis of the anticipated local impacts of its facility and
provides reasonable strategies for mitigating those impacts . . .); id. at 284 (Lago has agreed to
absorb the incremental costs for municipal services incurred by the local municipalities resulting
from the proposed casinos development and operation. To that end, Lago has entered into a host
community agreement with the Town of Tyre to mitigate these impacts.); id. (detailing terms of
Host Community Agreement).5
Because the Host Community Agreement has been nullified by the Fourth Department,
Lagos application does not satisfy the requirement in the RFA that it [s]ubmit as Exhibit
IX.A.3 a description of Applicants commitments to mitigate impacts of the proposed Gaming
Facility (during construction and operation) on each Host Municipality and the nearby
municipalities including for traffic mitigation, infrastructure costs, costs of increased
emergency services and the other impacts identified in the studies included in Item IX.A.2.b
of this RFA and [p]rovide copies of any contracts, agreements or other understandings
evidencing such mitigation commitments. RFA IX.A.3. Similarly, 9 N.Y.C.R.R. 5300.1(f)
required Lago to provide plans for mitigating potential impacts on host and nearby
municipalities that might result from the development or operation of the gaming facility. Id.
Lagos application must be disqualified on this ground as well, as the only mitigation plan
5 The Lago application, Location Board Report, and other materials available on the Gaming
Commission website are not appended as exhibits to this letter.

Mark D. Gearan, Chairman, New York State Gaming Commission

Kevin Law, Chairman, Gaming Facility Location Board
July 17, 2015
Page 4
submitted by Lago in its application was the now-nullified Host Community Agreement. See
Lago Application Exhibit IX.A.3.
The nullification of the Host Community Agreement also invalidates the Location
Boards reliance on that agreement in its selection of Lago. See Location Board Report at 32,
284. Section 1320 of the Act provides that, [i]n determining whether an applicant shall be
eligible for a gaming facility license, the board shall evaluate and issue a finding of how each
applicant proposes to advance the following objectives, including [m]itigating potential
impacts on host and nearby municipalities which might result from the development or operation
of the gaming facility. Act 1320(2)(a). Without the Host Community Agreement, the
Location Board has no support for its conclusion that Lago has mitigated potential impacts on
host and nearby municipalities and its selection of Lago cannot stand.
C.Lago Is Ineligible for a Gaming License Because It Is Not in Compliance with
SEQRA.
The Fourth Departments decision also precludes the Gaming Commission from
awarding a gaming license to Lago because Lago is not in compliance with SEQRA. The
negative declaration issued by the Town of Tyre has been nullified, and Lago is back to square
one with respect to SEQRA.
Under SEQRA, the Gaming Commission cannot take any action with respect to Lago
including the award of a gaming licenseunless SEQRA has been satisfied. See 6 N.Y.C.R.R.
617.3 (No agency involved in an action may undertake, fund or approve the action until it has
complied with the provisions of SEQR.).6 The Location Board made this clear in its May 19,
2014 SEQRA Question and Answer revisions. See SEQRA Q & A (May 19, 2014) at 1, Question
189 ([T]he award of a license by the Commission will occur after the requirements of SEQRA
have been satisfied.).

6 An action under SEQRA includes (1) projects or physical activities, such as construction or
other activities that may affect the environment by changing the use, appearance or condition of
any natural resource or structure, that . . . (iii) require one or more new or modified approvals
from an agency or agencies. 6 N.Y.C.R.R. 617.2(b).

Mark D. Gearan, Chairman, New York State Gaming Commission

Kevin Law, Chairman, Gaming Facility Location Board
July 17, 2015
Page 5
Lagos non-compliance with SEQRA also invalidates the Location Boards selection of
Lago. The Location Board relied on Lagos claimed compliance with SEQRA in selecting Lago.
See Location Board Report at 282 (Lago has secured the site, completed the SEQR process and
has been granted a site plan approval. As such, no delays in the start of construction are
anticipated. ). The Location Boards recommendation of Lago is no longer valid in light of
Lagos non-compliance with SEQRA and nullified site plan approval.
The Location Board made clear in its Questions and Answers for Applicants that
[a]pplicants should be completing the SEQRA process with all due speed and [t]he Board will
assess their ability to do so in its evaluation process. Round 2 Q & A at 28, Question 407.d.
Here, Lago received notice of a suit challenging its compliance with SEQRA in July 2014. It
chose to fight the suit rather than prepare a full environmental impact statementwhich both
Rivers and Montreign didand it has substantially delayed the SEQRA process by its actions.
For this reason as well, Lago should be disqualified from further consideration for a gaming
license.
Even if Lago remained eligible for consideration for a gaming license, it is highly
unlikely that Lago will obtain a second negative declaration under SEQRA that will withstand
judicial scrutiny. In finding the negative declaration invalid, the Fourth Department did not
reach the petitioners substantive contention that the Lago development requires a full
environmental impact statement.7 It is clear that a full environmental impact statement is
required with respect to Lago. On July 14, 2015, Akin Gump Strauss Hauer & Feld LLP
submitted to the Town Board on behalf of three local community members a letter,
environmental report, and several hundred pages of supporting documentation, including
photographs and videos, demonstrating the proposed casinos environmental impacts on water
quality, air quality, endangered species and other wildlife, agricultural resources, human safety,
traffic, and local character.8 By way of example, the submission addressed the following
substantive issues:

7 Dawley at 2.
8 Ex. 10 (Akin Gump Strauss Hauer & Feld LLP, Submission Regarding Potential Adverse
Environmental Impacts that the Town of Tyre Must Consider in its SEQRA Review of the
Proposed Lago Resort and Casino Project (July 14, 2015) (exhibits other than environmental
report omitted) (Akin Gump Submission)).

Mark D. Gearan, Chairman, New York State Gaming Commission

Kevin Law, Chairman, Gaming Facility Location Board
July 17, 2015
Page 6

Construction-induced erosion of the site resulting in the flooding adjacent

properties with sediment-laden discharges, Akin Gump Submission at 11;

Construction-induced degradation of water quality due to flooding and storm

water discharges into freshwater wetlands, id. at 11-12;

Impacts on nearby habitats, the Montezuma National Wildlife Refuge, the

Montezuma Wetlands Complex, and the Seneca Meadows Wetlands Preserve,
which habitats are home to bald eagles, bog turtles, Indiana bats, and other
endangered or threatened species, id. at 13-17;

Construction-generated degradation of air quality due to dust kick-up, id. at 17;

Traffic congestion and safety hazards resulting from the addition of a 24-hour
tourist attraction in Tyre, id. at 18-19;

Material conflict with the Towns 2014 Comprehensive Plan, which focused on
retaining the rural, agricultural heritage of the Town, id. at 19;

Impairment of the Towns character as a rural, secluded, agricultural, and

residential community located within a certified agricultural district and home to
an Amish community, id. at 19-20;

Threats to human health from increased car and truck emissions and exponentially
higher vehicular traffic on roads traveled by Amish horse and buggies, id. at 21;
and

Potential irreversible loss of agricultural land, id. at 22.

In the months ahead, the Town of Tyre needs to prepare a full environmental impact statement to
fulfill its duty under SEQRA. If the Town instead issues a second negative declaration, Lago and
the Town undoubtedly will face additional litigation concerning SEQRA. Unless the
Commission disqualifies Lago, it cannot award any licenses until Lago complies with SEQRA.9

9 Act 1311(1).

Mark D. Gearan, Chairman, New York State Gaming Commission

Kevin Law, Chairman, Gaming Facility Location Board
July 17, 2015
Page 7
Lago is solely to blame for the problems it has created. It orchestrated a flawed SEQRA
process and then failed to take corrective action in the first instance after receiving notice of suit
in July 2014. Indeed, Lago apparently failed even to disclose the existence of the SEQRA suit to
the Location Board or Gaming Commission. For all of the reasons set forth above, as well as
those in our April 1, 2015 letter to the Gaming Commission, we respectfully submit that Lago
should be disqualified from consideration for a gaming license.
Sincerely,

George A. Borden

cc:John A. Crotty, Gaming Commissioner

Peter J. Moschetti, Jr., Gaming Commissioner
John J. Poklemba, Gaming Commissioner
Barry Sample, Gaming Commissioner
Todd R. Snyder, Gaming Commissioner
Dennis E. Glazer, Member, Location Board
Stuart Rabinowitz, Member, Location Board
Peter D. Carmen, Oneida Indian Nation
Meghan Murphy Beakman, Esq., Oneida Indian Nation
Daniel F. Katz, Esq., Williams & Connolly LLP