TYRE LAWSUIT TARGETS LAGO’S ILLEGAL SCHEME TO GENERATE PRIVATE PROFIT AT PUBLIC EXPENSE

When New York State began implementing the constitutional amendment to expand gaming, the Lago proposal in Tyre was very clear about its commitments: it said that it did not need taxpayer dollars for its proposed new gaming facility. Yet, Lago’s owners secured millions of dollars of special tax breaks – and did so through a process predicated on influence peddling.

Specifically, the company hired a law firm with deep ties to the same local agency that approves those giveaways. The tax breaks were approved even though the agency doesn’t have the authority under state law to force taxpayers to subsidize casinos. The lawsuit filed by Tyre residents asks the court to invalidate the tax breaks on the grounds that they are based on misleading public disclosures, are the outgrowth of conflicts of interest, and violate laws governing what kinds of enterprises can receive such incentives.

BAIT & SWITCH – LAGO ASSURED IT DID NOT NEED TAX BREAKS: Lago received millions of dollars in public tax exemptions from the Seneca County Industrial Development Agency, yet according to Lago itself, the financial assistance was not needed for its development to go forward. Indeed, Lago picked its planned locale and submitted its application for a casino license before applying for any IDA benefits.

CONFLICT OF INTEREST – LAGO’S LAW FIRM WORKS WITH IDA: After effectively telling the state it did not need taxpayer assistance for its new casino, Lago hired Harris Beach as its counsel to try to secure tax breaks. That same law firm is employed by the Seneca County IDA that it is now getting tax breaks from. In other words, the IDA’s own agency counsel was appearing before the IDA to negotiate lucrative incentives from the IDA itself.

LACK OF DISCLOSURE – LAGO’S USE OF CONFLICTED LAW FIRM: Lago improperly refused to acknowledge that its application presented the sort of clear conflict of interest that robs citizens of trust in this process.

LACK OF AUTHORITY – IDA NOT PERMITTED TO SUBSIDIZE CASINOS: Under the law, IDAs may provide financial assistance to gaming facilities – but only to horse racing. It cannot give tax breaks to the Lago casino.

MISLEADING DATA – SENECA IDA UNDERSTATED TAXPAYER COMMITMENT: Throughout the process, the IDA repeatedly failed to disclose the size of the property tax benefits. Even when it issued a press release after-the-fact, counterfactually touting that its agreement with Lago would result in nearly $4 million in enhanced revenues, its calculations remained shrouded in mystery. Only recently through information requests have certain of IDA’s assumptions become clear. They are deeply flawed, and the benefits to Lago are much greater than the IDA has led the public to believe.

 

 

 

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