Del Lago Resort & Casino

Del Lago Resort & Casino

WATERLOO — The Fourth Department Appellate Division Court has upheld the August 2016 ruling by Acting State Supreme Court Judge Patrick Falvey denying a legal challenge to the Seneca County Industrial Development Agency’s payment-in-lieu-of-taxes agreement for the del Lago Resort & Casino.

The five-judge panel unanimously upheld Falvey’s ruling in a decision filed July 7.

“With respect to the first cause of action, we reject the petitioners’ contention that the resort and casino development was ineligible for IDA financial assistance because it was not a ‘project’ pursuant to General Municipal Law,” the judges wrote.

“We conclude that the broad statutory terms ‘commercial’ and ‘recreation’ within the definition of the project are ambiguous insofar as they are susceptible to conflicting interpretations. As such, the IDA’s interpretation is entitled to get deference and must be upheld as long as it is reasonable.”

On the second cause of action, the court rejected the petitioners’ contention that the IDA’s award of financial assistance to the del Lago project was arbitrary and capricious or unlawful because such assistance was unnecessary to induce the project respondents to undertake development in Seneca County.

“We conclude that the record demonstrates that the SCIDA has an adequate and rational basis for its determination,” they ruled.

They said there is no requirement in the IDA Act that a particular project be financially needy in order to qualify for assistance.

The judges said the express purpose of the IDA Act is to actively promote, attract, encourage and develop recreation, economically sound commerce and industry.

“A purpose which the SCIDA rationally determined would be furthered by providing assistance to the subject project,” they wrote, adding, “We reject the position of petitioners that our decision in Barker Central School District vs. Niagara County IDA is controlling on the issue of financial necessity as a prerequisite for SCIDA financial assistance.”

The petitioners claimed that the IDA decision to provide a PILOT was arbitrary and capricious because it was based on a flawed appraisal, which allegedly undervalued the project for tax assessment calculations.

But the judges agreed with the IDA and del Lago officials that the petitioners lack common-law taxpayer standing to assert that claim. They also concluded that by failing to raise it in their briefs, the petitioners have, in any event, abandoned any claim to common law taxpayer standing with respect to that cause of action.

“It is not the role of the court to resolve disagreements among experts, so long as the agency’s conclusions are not affected by error of law, arbitrary and capricious or an abuse of discretion,” they wrote. “Here, we perceive no reason to disturb the IDA’s conclusions.”

The appeal was filed by Dagmar Nearpass, Desiree and James Dawley, Lynn and Robert Barbuto, Jonathan and Jane Morelli, Richard Barner, David Schoonmaker and Casino Free Tyre.

Defendants were the Seneca County IDA, del Lago Resort & Casino, Wilpac Holdings LLC, Wilmot Gaming LLC, Wilpac Funding LLC, Thomas C. Wilmot Sr., M. Brent Stevens, Wilmorite Inc. and PGP Investors LLC.

The $440 million casino opened Feb. 1. The hotel and spa opened July 1.

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