By Bennett J. Loudon, @BennettLoudon
A group of Seneca County residents have filed a lawsuit against public officials and the developers of a casino claiming the project got inappropriate financial incentives.
The suit also claims there was a conflict of interest involving the lawyers who handled the deal.
Defendants named in the 40-page suit filed Friday in state Supreme Court include the Seneca County Industrial Development Agency (IDA), the town of Tyre, Seneca County, the Waterloo Central School District, Lago Resort and Casino, Wilpac Holdings, Wilmot Gaming, Thomas C. Wilmot Sr., M. Brent Stevens and Wilmorite Inc.
The nine plaintiffs include: Dagmar Nearpass, Desiree Dawley and James Dawley III, Lynn and Robert Barbuto, Jonathan and Jane Morelli, Richard Barner and David Schoomaker — all residents of Tyre and the Waterloo school district.
“IDA assistance here serves no purpose other than to enrich a private party at public expense,” the suit claims.
The suit claims the IDA had no authority to provide financial assistance to casinos because it’s not allowed under state law.
The suit also claims that Lago officials retained the IDA’s lawyer as its legal representative creating a conflict of interest.
Steven Greenberg, spokesman for Lago Resort and Casino, said Lago officials believe this lawsuit, like those before it, is groundless.
“It’s curious.” he said, “that the handful of local Lago opponents are employing the Oneidas’ high-powered Washington, D.C., law firm to represent them in their latest meritless lawsuit.”
In 2013, New York state lawmakers enacted a law to allow up to four casinos in upstate. In June 2014, the Lago developers submitted their application to be one of the approved casinos, but did not reveal possible IDA assistance. The board reviewing the applications would have looked less favorably on an application that required tax incentives, according to the suit.
In December 2014 Lago was one of three approved casino sites. After the decision, Lago developers said the IDA incentives were necessary for their plan.
Lago sought $16 million in sales and use tax exemptions, $3.4 million in mortgage tax exemptions, and an unspecified amount in property tax exemptions. The lack of a specific amount for property tax exemptions makes the application incomplete and therefore it should be denied, the suit claims.
Ultimately, county officials announced that Lago would pay $45.4 million to the county and school districts, over about 20 years and make road improvements near the casino.
The plaintiffs claim that without the IDA deal Lago would pay about $65 million in taxes, about $20 million more.
For work on the IDA application, Lago was represented by Shawn M. Griffin, a lawyer for the Harris Beach law firm, the suit claims. Griffin was the IDA lawyer since 2008, according to the suit.
The IDA hired Ron Halpin, a former Harris Beach lawyer, as counsel for the Lago project.
Although Harris Beach recused itself from work on the IDA application, the firm had previously been appointed regular counsel and stayed on in that role.
“Thus, the IDA was negotiating with its own counsel on the amount of the IDA’s fee along with millions of dollars in reduced taxes,” the suit claims.