Seneca Smoke Shop, Gas Station To Open In June – Is Mall Far Behind?

by Mike Hudson

Back at the dawn of the new century, the Niagara Falls Reporter was a lone voice in the wilderness, daring to ask the question others dodged.

Would a gas station and smoke shop operation be part of the Seneca Nation’s master plan for the development of the 50 acre parcel of prime real estate they were gifted in the heart of the city’s tourist district?

The answer, from everyone who pretended to know, was a resounding no. Cyrus Schindler, then Seneca president, acted as though he was insulted by the very thought, given that he was presiding over the opening of a casino that would take in $1 million a day.

A portion of the compact reads that the Seneca can conduct “any form of Class III Gaming on Nation lands pursuant to this Compact; provided, however, that this Compact shall apply to operation of such enterprise, business or activity only to the extent that such operations are directly related to Class III Gaming undertaken by the Nation pursuant to this Compact.”

In the past, many have interpreted this language to disallow a gas station on the Seneca land, and in 2012, the state used the provision to stop a previous smoke shop / gas station initiative.

In all likelihood, the Seneca “energy station” on Niagara Street is not the end of the tribe’s plans for branching out into businesses unrelated to gambling, but only the beginning.

Again, the Reporter has been at the forefront when it comes to predicting the all too predictable expansion.

The Reporter published this in 2007:

“Seneca… has opened a buffet, a pub, a ‘high-end’ steakhouse, an Italian restaurant, an Asian restaurant, a glamour spa, a conference center, a bistro, a coffee shop, a nightclub, electronics, jewelry, clothing, souvenir and multiple gift shops, and a 26-story, 604-room hotel. All tax free. More stores, more hotels are coming. And when the 50 acres are filled, the insane Seneca/Albany compact provides for acquiring additional, adjacent land — to remove from the USA — for more tax-free Seneca businesses. A smoke shop is anticipated, a gas station, a mall and ironically — a convention center. Soon, if we don’t stop them, they will own the whole town.”

When you don’t have to pay property tax, and you don’t have to pay sales tax, and you don’t have to comply with costly building codes there’s plenty of money lying around to finance new construction.

And the Seneca operation will be competing against local businesses, which labor under the heaviest tax burden anywhere in the state, and perhaps the country.

“This won’t benefit an already impoverished city,” Niagara USA Chamber of Commerce spokesman Kevin Schuler told the Reporter in an exclusive interview. “I know they want to do some development, back in 2002 they had all sorts of plans, but is a gas station and smoke shop the best thing? I don’t think so.”

Schuler said the taxes and regulations non-Indian businesses must work with creates a colossally uneven playing field here.

“While the merits of New York’s tax policy can be debated, local retailers are caught in the middle,” he added. “While they must comply with New York State regulations, their neighbor can conduct business virtually unimpeded by such burdensome regulations and taxes. This is simply unfair.”

The city, already teetering on the edge of bankruptcy, would lose vital sales tax revenue on gasoline and retail purchases at the Seneca tax-free location. As local businesses lose customers to a tax-free gas station, the amount of sales tax revenue paid to the city and county will drop in proportion.

“Unless the state were to compensate the city for this lost revenue the economic hit will be another roadblock to the city’s recovery,” Schuler said.

Land ceded to a foreign nation is property tax-free forever. Items that used to generate sales tax are now purchased sales tax-free in a neat 50-acre zone. Yet locals still pay for roads, sewers and water lines that lead to the Seneca land, and pay for increased criminal justice and social welfare costs associated with casino-fueled gambling addiction.