The bumps in the road start as soon as you pass the welcoming sign on the side of I-86. There are lots of them, marring huge, neglected stretches of spotty pavement. Basically, you have to forget the scenery and aim your vehicle for the smooth patches, and there aren’t many of them. The experience continues until you get west of Salamanca. Upon exiting the territory, the road gets back to its previous state. In all, it’s a vivid metaphor for the history of government-to-government relations between New York State and the Senecas.
“How is it that when you get here on I-86, the road reverts to the Third World?” asks Robert Odawi Porter, president of the Seneca Nation. “It’s the traditional form of predatory behavior, inducing us to let a road go through the Allegany territory, never fully paying the bill for it and cheating us out of promises made.”
Porter has a list of issues with the state, ranging from the taxation of tobacco sales to non-Indians to unresolved land claims to a gaming compact dispute. In this respect, his presidency resembles those of his predecessors. But, less than halfway through his two-year term, Porter has also distinguished himself as a creative, strategic thinker who is actively determined to leverage the Seneca Nation’s economic and territorial sovereignty, forging new economic partnerships and diversifying a gaming-dependent economy in the process.
“My philosophy is that growth comes from collaboration and partnership with like-minded, economically self-interested human beings,” said Porter. “A model of economic sustenance that is rooted in the Seneca Nation being an island cut off from and economically unintegrated with the neighborhood is a recipe for failure. The gaming experience has demonstrated what integration can do for us.”
The Nation’s constitution dates to 1848, and provides for three branches of government; the executive, which includes a president (who can serve multiple, but not consecutive terms), treasurer and clerk; the legislative, led by a 16-member tribal council composed of eight members from each of the two major territories; and judiciary. Porter, who was elected president of the Nation last November, has a distinguished 20-year record of public and academic service, and he is neither a stranger to Seneca government nor to direct dealings with New York State.
In 1991, two years after graduating from Harvard Law, Porter, who was born and raised in Allegany Territory, was appointed the Nation’s first attorney general, serving a four-year term during which he successfully mediated numerous conflicts with the state. In 1995, he left for Kansas University, where as a law professor he founded the Tribal Law and Government Center. He eventually returned to his undergraduate alma mater of Syracuse University as law professor and director of the Center for Indigenous Law, Governance & Citizenship, and to the Seneca Nation to serve as chief legal counsel, before deciding to run for president last year.
“It’s the first office I ever ran for,” said Porter, who is the only law professor to head a tribe in the country. “I always had an eye on my home country and it was through teaching and writing that I was able to study issues and possible solutions for things I was concerned about here.”
A GAMING-BASED ECONOMYPorter presides over an economy that generates almost $700 million in revenue per year, almost all of it from gaming, and contributes about $1.1 billion annually to western New York. The Nation’s three casinos are operated by the Seneca Gaming Corporation (SGC), which was created by the tribal council in 2002, and runs the Nation’s three casinos; Seneca Niagara Casino & Hotel, Seneca Allegany Casino & Hotel and Seneca Buffalo Creek Casino (see sidebar). All told, the Gaming Authority employs more than 3,500 workers, and operates 6,500 slot machines, 140 table games, 800 hotel rooms, ten restaurants, a championship golf course and other related amenities. Another corporation, Seneca Gaming & Entertainment, operates Class II bingo facilities in the Cattaraugus (Irving) and Allegany (Salamanca) territories.
In 2001, the Nation entered into a 14-year compact with the state of New York for three specified casino locations under which it agreed to a sliding scale of payments, rising from 18 percent in the first four years (2002-06) to 22 percent (2007-09) to 25 percent on the last six years (2010-16), in exchange for a zone of gambling exclusivity extending westward from Route 14 east of Rochester, the portion of the agreement that is presently in dispute. The Seneca Nation has asserted that state-sanctioned racetrack gaming in Hamburg, Batavia and Finger Lakes constitutes a violation of its exclusivity rights. It has not made any payments the past two years, and presently holds about $300 million of compact funds in escrow, Porter said.
The rents that are paid from the casinos to the nation are used for the public. For instance gaming recently enabled the creation of a council-authorized enterprise, the Capital Improvements Authority, which issued $160 million worth of bonds secured by casino revenues, which was used over the past three years to build new government offices and community centers in Cattaraugus and Allegany, a waste water treatment plant, a water tower, and water line upgrades throughout the entire nation; 22 projects in all that were financed by virtue of casinos that can generate sufficient cash flow to pay off that debt over a 10-year term.
The tribal council has limited oversight over the SGC. Major expenditures, such as the recent decision to add a $53 million hotel tower to the Allegany property, have to be approved by the council. There are quarterly meetings and periodic updates from the Board to the Council. It used to be the case that the president and the treasurer could serve on the Board. But, in 2009, the council removed the executives from the Board. Porter, as he puts it, “has no direct role at all in anything going on over there.”
That doesn’t prevent him from playing a strategic role, however. One of the first things Porter did after getting elected was check on the status of the Buffalo Creek Casino, which has endured its share of opposition since the temporary facility opened in 2007. Working through the SGA, Porter created a $1 million fund for community development projects in the area around the casino. After consulting with local interests, the plan is for a smaller-scale project rather than the destination resort that was originally envisioned.
“We met with a lot of prominent business interests, political interests, the mayor, civic organizations, just to learn what’s in the neighborhood around our territory,” said Porter. “We asked how can we work together? What are you doing already? We don’t know these things. Can you guys build a hotel? Can you put a couple of restaurants up? They have this whole beautiful waterfront project that is starting to evolve. It’s only three-tenths of a mile from our facility. Our business is gaming; let’s stay to the core of the business and leave to others some of the amenities.”
The development fund generated positive local press coverage for the project, which still has its share of opponents, some of whom are suing to have the temporary facility shut down. The money will be distributed by the newly formed Buffalo Creek Development Commission, composed of members of Seneca Gaming, the Seneca Nation and local groups.
“Seneca Nation officials are on the same beautification page with community organizations near the casino, including the Valley Community Association and the Old First Ward Community Center,” wrote the Buffalo News in an op-ed piece. “There is much to talk about such projects as small parks, landscaping and lighting... The Seneca beautification fund can only add to the momentum in the once-neglected area.”
THE NEED TO DIVERSIFYThe Nation’s economy has grown even more gaming-dependent since Porter took over, as the State of New York prevailed earlier this year in its legal effort to tax cigarettes sold on Indian reservations to non-Indians. The Senecas, whose tax-free mail-order business was eliminated last year by the federal Prevent All Cigarette Trafficking (PACT) Act, now only sell native-made tobacco brands, which it still maintains are not subject to taxes.
Porter feels a lot more secure about the Nation’s gaming business, but he is keen to diversify the Nation’s economic base. Citing the Jim Collins bestseller, Good to Great: Why Some Companies Make the Leap…And Others Don’t, he said, “All companies basically fail at some point. They catch a niche, an advantage, and it runs 10, 20 or 25 years and someone else comes along. Successful companies endure because of a philosophy that sustains them through different product innovations and market opportunities. That’s an extremely valuable realization.”
To bring Porter’s strength-through-integration approach it to life, he has engaged in new forms of outreach, bringing in James J. Snyder, an adopted member of the Nation who served for 31 years in the Cattaraugus County Legislature, as special assistant to the president for local government relations. One of Snyder’s first assignments was to bring decision makers from seven county Industrial Development Agencies (IDA’s) from western New York and neighboring Pennsylvania together to discuss ways to enhance regional economic development. Porter chaired a conference in Allegany with the IDA’s in June. His message was to look at the nation’s gaming business as a model that can be replicated in other businesses.
“It seems to me we can do things with them outside of gaming by working together,” said Porter. “The Seneca Nation is by treaty tax immune; we have sovereign immunity. It’s a great advantage with federal government contracting opportunities. There are set-asides for tribal businesses. We can work with the non-Indian businesses in our region to partner and come up with mutual opportunities.”
Other diversification strategies include clean energy, specifically the Seneca Pumped Storage Project at the Kinzua Dam, in Warren, Pa., which was built in 1964 after the federal government condemned and flooded 10,000 acres of the Nation’s Allegany Territory, displacing 600 Senecas in the process. Shortly after winning the presidency, Porter applied for the right to run the facility, which is presently operated by Akron, Ohio-based FirstEnergy Corp., and whose license expires in 2015. Porter is betting that the Nation’s ability to apply the full extent of its water and property rights for additional hydropower generation at the site will give it an edge.
“This is an opportunity for us to pursue a facility that presently uses our lands and waters to generate profits for a mega-corporation in Ohio,” said Porter. “If we can bring that resource back here, it’s green energy and it’s sustainable. It’s a resource that we think will be a healthy and admirable pillar for our economy and something we want to redirect for regional growth. We want to take some of those proceeds and reinvest them back into our region, working with county governments both in New York and Pennsylvania.”
Porter is also hoping to shore up the Seneca Nation’s “very immature” internal economy. “We don’t have a lot of traditional retail,” he said. “A grocery store at Cattaraugus would be great. Providing other small shops, even franchises, for our people would be great. We have a Seneca man who has a Holiday Inn franchise and a Burger King franchise here at Allegany. That’s not sexy, but it’s something we need here in terms of basic human service retail that can make life better for people.”
Education, language and culture form another important area of initiative. The Council has already funded a summer program for teens and young adults called VIP 20/20, a leadership training program, and a language immersion program that started this summer. “We’re working on our budget now and we’ll find out how we can fund the bigger educational initiatives,” said Porter. “The ultimate diversification is creating a population that is strong as individuals, which can survive in any economic condition or circumstance.”
Porter has also carried his diversification agenda to the federal level. He appeared in July before a roundtable of the Senate Indian Affairs Committee to discuss tax policy and the need to channel capital to areas other than gaming.
“We’ve seen billions and billions invested in Indian country at our casinos,” he said. “But in very many ways, the same structural advantages exist for other business. Maybe they’re not as lucrative as gaming, but there are other ways we can leverage our tax immunity, use our sovereign immunity, and our contracting advantages for economic benefit. And in almost all instances, this will be of benefit for Natives and non-Natives because we usually don’t have enough Natives to sustain the jobs. That’s where the Congress and in particular the House Republicans have exhibited a greater degree of enthusiasm. There is no new solution that is going to be rooted in spending more federal dollars in Indian country.”
STATE OF UNCERTAINTYWhile Porter has made tangible progress at the local and regional levels, the state government is another question. The Nation is keeping a close eye on gaming developments in Albany, where racetrack gaming interests have lobbied the governor for live table games and where some legislators are pushing to amend the state’s constitution to allow for commercial non-Indian casinos.
“These developments are a threat to our business,” said Porter. “I think the key that’s being exploited right now is the state is cheating us on our compact so we’ve suspended our payments. The Oneidas, under their compact, have no obligation to make payments, and then the Mohawks also have justification not to make payments. So none of the tribal gaming facilities are providing any payments to the state which the opponents are using as the hook for saying, aha, there’s obviously a problem with Indian gaming, the state’s not getting paid. They’re using these temporary conditions to excuse us from the discussion.”
Porter plans to vigorously compete for any new casino gaming in the Catskills, where the Nation owns 63 acres. “The land that we have right now has not gone through the various environmental reviews, so we’re seeking out right now some existing land that has already gone through environmental assessments that will help facilitate the speed with which our application can be put in,” he said. “We’re also actively seeking a potential development partner and potential operator. Could be a flagship; an entity that can help us make the investment, build the facility and operate it so that we can get up and running sooner rather than later.”
As for the present compact dispute, there is not much to report, at least so far. Gov. Andrew Cuomo has charged Bennett Liebman, a former commissioner of the New York State Racing and Wagering Board, with reviewing all forms of gaming in the state, and Porter, for his part, is ready to move forward.
“I’ve known Ben for years and he’s very sharp and responsible in his approach to problems and analysis,” said Porter. “If we ever get the chance to work together, we probably can solve some problems.”
SIDEBAR: Seneca Nation's western New York casinosSENECA NIAGARA CASINO & HOTEL
Location: Downtown Niagara Falls
Opening date: December, 2002
• 147,000 square feet of gaming space with 4,289 slot machines, 99 table games, including blackjack, craps and roulette, 16 poker tables, and keno.
• 26-story, 604-room hotel tower with 486 deluxe rooms, 86 corner suites, 22 one-bedroom suites, 10 penthouse suites, a full-service spa and salon, fitness room and swimming pool.
• A 2,300-space parking garage, with 11 bus bays.
• Additional surface parking for more than 600 vehicles.
• The Seneca Events Center, a multi-purpose entertainment/event facility, which can seat up to 2,200.
• The Bear’s Den Showroom, a 468-seat theater.
• The Spa, a full-service spa and salon offering a wide array of spa treatment, hair and cosmetic services.
• Five restaurants, three bars, a walk-up deli, a nightclub and one snack bar.
• Five retail shops offering a wide variety of merchandise.
Opening date: May, 2004
• 68,300 square feet of gaming, including over 2,100 slot machines, 30 table games; including blackjack, craps and roulette; and 16 poker tables.
• A 212-room hotel has received a Four Diamond rating for service and quality from AAA in each of the past four years. Broke ground last month on a new, $53 million, 200-room hotel tower.
• An 8-story parking garage with parking for approximately 1,800 vehicles.
• Surface parking for approximately 1,250 vehicles.
• Indoor/outdoor entertainment space with capacity for 2000. Plans for a permanent entertainment venue are being finalized.
• The Logo Shop retail store.
Location: Downtown Buffalo
Opening date: July, 2007
• 457 slot machines.
• Nine-acre site in downtown Buffalo.
• Annual visitor volume is 750,000.
• Temporary facility underwent expansions in 2008 and 2010.
•RFP issued in June to design permanent facility. Integration with surrounding Buffalo waterfront development is being stressed. Permanent facility will also incorporate existing building materials and infrastructure.