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Casino: If it's not here, it's not transformational

Tuesday, June 17, 2014 - Updated: 8:03 AM


For The Recorder

Each of the touted capital region casino sites has its own strengths and weaknesses, but only one has the potential to truly transform (in a positive fashion) not only its host community but also the entire region: That location is just south of Thruway Exit 27, on the border between the town of Amsterdam and the city of Amsterdam. It's the only location that grows and redefines the region as a whole, while respecting and promoting the essential enduring nature of the host communities.

The town of Florida will continue to be rolling hills and rural farms and homes; Amsterdam, the small city astride the big river that rises Oz-like from its natural surroundings -- only more so and better. The city and town together are uniquely geographically positioned to maintain these qualities while obtaining maximum benefit from the casino, and best controlling its less desirable impacts. There will be no inner city traffic jams, or across-the-street pawn shops, check-cashing, and bookie joints.

As important as it is to draw out-of-state and down-state visitors into the capital region, it's also vital to draw regional residents out of the urban core. We need to think of a Greater Capital District as a string of small pearl cities separated by rural and natural areas surrounding the denser urban core -- an inter-related whole, that allows everyone the greatest opportunities -- and most choices -- in where to live, work and play.

Whether this comes to be depends on what prevails: dollars and cents, or common sense.

The devil is in the details -- more precisely, in the 213 pages of the Upstate New York Gaming Economic Development Act of 2013 (which added a new Article XIII, Destination Resort Gambling, to the New York State Racing, Para-Mutual, Wagering, and Breeding Law). This is the governor's program bill that established the entire site selection process.

§1300 of the above law (Legislative Findings and Purposes) states: "Upstate tourism constitutes a critical component of the New York State economy;" that "The casino sites ... will be selected on merit;" and that "local impact of the casino sites will be considered." §1320 requires that no downstate casino application can be issued until five years after the upstate casinos are operating. Clearly, the intent to help distressed upstate areas expressed by the governor and others elsewhere is apparent here also, but there are no specifics.

Under this statute, 80 percent of the state tax revenues from casino gambling will be distributed statewide as elementary/secondary school aid or property tax relief; 10 percent will be split equally between the host communities and the host county; and 10 percent would go to other counties in the region for school aid and tax relief. According to the New York State Division of the Budget, the host communities and county in the capital region will split $11,416,667.00 per year. Now take a look at what the counties each would receive per year if they are not hosts: Albany $6 million; Saratoga $4.6 million; Rensselaer $3.8 million; Schenectady $3.6 million; Washington $1.8 million; Fulton $1.6 million; Montgomery $1.45 million; and Schoharie $946,000.

Does anyone really think that $11.4 million dollars per year will be transformational to the future of the city and county of Albany? Or even that this number would be much more significant to that county and city than $6 million per year? Look at the combined annual expenditures of Albany city and county (approximately $737 million): this represents .8 of 1 percent to 1.5 percent. Now look at the annual combined city of Amsterdam and Montgomery County total expenditures ($126 million; town of Florida not available at writing), it's 9 percent of the total (only 1.2 percent at $1.4 million). Actual percentages would be lower because school expenditures have not been factored in, but you can see the difference in magnitude. That's enough of a cushion to hold flat on or lower property tax levels, and still invest in development. Just lowering taxes would promote development. Now, that's transformational.

And that's not even considering property tax revenue, sales tax revenue, county occupancy tax revenue, developer community funding (mandated or voluntary), and the reciprocal effects as all this money moves through the community several times. This will boost the numbers up but does not change the relative order of magnitude between the communities.

I'd never argue that a community should be penalized for successfully spending decades rebuilding itself and obtaining state and federal assistance, or having the good fortune to be the state capital, but there is a question of economic and social justice.

With estimates like the above, we are definitely not in a lifeboat situation where subsistence needs to be withheld from the sickly child to nourish the more healthy ones. And as in the case of Solomon and the disputed baby, sometimes equal distribution is not equitable.

A final but highly significant consideration is that the gaming industry is evolving: We simply do not know where exactly the market saturation point is, or what the changing shape and location of future casinos will be. Many things that seemed immutable in our lifetimes are now changing: Cities are repopulating, big malls closing, and suburbia retracting. If a casino is no longer viable in 30 or 40 years, well, for Albany, Schenectady or Rensselaer, it was good while it lasted, and the retrenching will be painful but not permanently damaging. For Amsterdam and Florida, it would have meant decades to develop a similar if smaller critical mass of business, population, and attractions that do not exist now but that could then stand on their own after the casino.

So if everyone -- statewide and more so in the capital region -- is getting money, but placing the casino here not only turns around a depressed area but adds its classic strengths and attractions to a Greater Capital District, why wouldn't Amsterdam/Florida be clearly the capital region front-runner?

It's because §1320 of the same law details (given here in reverse order) the factors the siting committee will consider: 15 percent will be "work force and societal enhancement." This is basically compliance with favored causes in Albany, from the number of construction jobs, to green planning, to child care for workers provisions; 20 percent is "local impacts.". Mainly public support, partnerships, and mitigation of damage to pre-existing businesses. The biggest portion (65 percent) is "economic activity and business development." Here, the transformational impact on distressed areas disappears and is replaced with language about "maximum capital investment ... maximum revenue to the state ... highest number of jobs ... quickest ... biggest ... best experience for the gambler."

In other words, the above could be construed to mean that if Site X generates more money than Site Y, Site X wins despite that the increase to Local Community X is incremental and the change in Local Community Y is transformational, and the variance in money to communities in the rest of the state is marginal.

Others have taken note of the misalignment of the law and its presumed intent. The Saratoga promoters (big money contributors to getting the gambling referendum passed) having been barred by the local citizens to adding more to Saratoga's plate are now bidding on East Greenbush and Orange County. Why? Because they believe they can exploit the above building their numbers by outflanking Amsterdam -- Albany-Schenectady-Rensselaer for the Massachusetts traffic and getting behind the Catskills to cut off the New York City traffic. Everyone knew that the provisions that two casinos could go into one region was written with the struggling post-resort economy of the Catskills in mind, but now they -- and us -- are at risk to be shoved away from the table.

How did this come to be? It would be humorously ironic, if it weren't so economically unjust. The road to Hell is paved with good intentions. I truly believe that the governor and his staff wanted a process that was transparent, honest and professional; consider the experts in economics and finance he has appointed to the siting committee. Along the way, however, they wrote language into the law that sharpened the process but blunted the intent.

I believe this because I was honored to serve on another Gov. Cuomo initiative recently -- New York Rising Communities, having to deal with storm-damaged New York. He dramatically changed yet another storm rebuilding challenge into a transformational opportunity by personally charging the committees to not just do the same old things again, but to think of future resiliency and "build it back better."

Last weekend I experienced my own personal backyard "build It back better" moment. I was attaching the base of a bird house to a pole with five screws in a diamond pattern. The central screw (Albany) oriented the piece and was the first to be worked; as I worked the others (Amsterdam, Saratoga, Troy, Hudson) I was careful not to apply too much torque to any one without equal attention to the others for fear of splitting the wood one side or the other.

The wood has been splintering in our part of the capital region for a very long time now. Montgomery and Fulton counties have been New York's "fly-over territory." That's the term the jet-setters use for Middle America -- the no-man's land that stretches between Wall Street and Hollywood Boulevard. The state has moved agencies, schools and opportunities around the area to spread the wealth and promote growth -- just not this far west.

I hope that the siting committee will consider all the economic factors, including: how convenient driving, a shovel-ready clean site, natural beauty, western traffic diverted from Turning Stone, room for expansion, etc., change the total long-term economic impact. In another irony, we should win on the mitigation of damage to existing businesses point. We simply don't have any that could be hurt. We'll have to wait to deal with that until after the influx of revenue creates the new businesses. But in the end there are only two questions to be answered:

Is this a game-changer or just a change of game? More gambling money to fund ever increasing education costs and avoid having to lower property taxes through state mandate relief?

Is it better to send a little more money to all the counties if we miss a once-in-a-lifetime chance to make one whole?

The only thing that will right this situation is for the governor to clearly speak out and restate his original intent. To inform the siting committee that they are empowered to think freely, use all their talents to consider all factors, and enable his vision of an improved upstate economy.

Every governor of New York wants to build his legacy or polish his resume for higher office. Either way, this is a defining moment for our current governor. He must build on "build back better," continue to promote new ways of dealing with old problems and forgotten constituencies. He must not refrain from exercising his leadership in clarifying his intent for fear of being misconstrued as influencing a particular selection.

What can you do as an individual as the process moves forward? I'll talk about that in another article. In the interim, if you have negative concerns about the casino, I would ask you to mute them at the public hearing tonight. Right now we're ahead of the pack on the local support contest (10 percent weighting), and there will be many ways and a dedicated revenue stream under the law to address your concerns as we progress (I hope) through local planning and zoning hearings and beyond. Second, write or talk to your state elected officials. Let them know this is the time and this is the way for the state to finally take decisive action to help the lower Mohawk Valley, as it has helped other portions of the Greater Capital District.

R. H. von HASSELN is director of Community and Economic Development and city historian in the city of Amsterdam.


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