Tuesday, January 5, 2010


Shinnecock casino prospects rekindle Riverhead land speculation
By Michael Wright
Jan 4, 10 10:32 AM
Editor's Note: This article was published in the December 24 issue of The Southampton Press and the December 23 issue of The East Hampton Press.

The timing of the Shinnecock Indian Nation’s preliminary approval for federal recognition, and the parallel spike in speculation about where a future Shinnecock-sponsored casino might be built, has rekindled the possibility of a Riverhead site.

As a new administration prepares to take over in Riverhead Town, outgoing Supervisor Phil Cardinale says he hopes his successor, Sean Walter, and the new Town Board will keep an open mind if the Shinnecocks were to express further interest in the former Northrop Grumman testing facility in Calverton as a potential site for a casino and resort development.

“I hope that the new board will not preclude any options for the development of the site but will listen carefully to all proposals,” Mr. Cardinale said this week.

The Shinnecocks have spoken with Riverhead lawmakers in the past, although they have more recently set their sights on locations closer to New York City. Still, some within the tribe have said they would prefer to have the proposed gaming facility closer to the Southampton reservation so members could work at the casino.

The 2,900-acre Calverton property has already been divided into several pieces by Riverhead Town, which took it over when the U.S. Navy shut down its fighter plane testing program in 1998. Some 755 acres are in contract to be sold to Riverhead Resorts, which has already made more than $2 million in down payments to the town, for the development of a sprawling convention center, hotel and resort, replete with a 90-acre artificial lake where the testing facilities runways now sit, a project it bills as “a Family Resort Married to Nature.” The rest of the property, on the edge of the pine barrens, has either to be protected as woodlands or is slated for a variety of light-industrial uses.

But the national economic downturn and resultant credit crunch has put the brakes on many similarly ambitious development projects, and is raising doubts about the ability of the Riverhead Resorts operators to close on the $155 million purchase of the land, slated for next year. Mr. Cardinale said this week that the deep pockets of the Shinnecock’s financial backers and stratospheric projections of revenues a casino on eastern Long Island could produce make for an enticing backup plan, either for the town or the Riverhead Resorts developers.

A call to the Riverhead Resorts offices on Monday afternoon was not immediately returned. The Riverhead Resorts proposal is headed by a Scottish businessman, John Niven, town officials said.
Covenants imposed on the property by the Riverhead Town Board specifically preclude a casino there—a clause included with the Shinnecocks in mind, Mr. Cardinale said. But he noted that the clause could be lifted by town lawmakers.

Mr. Walter, who has voiced moral opposition to gaming in general, said he will, nonetheless, keep an open mind in considering the future uses of the property and the potential costs and benefits to the town—financial and otherwise—should the Shinnecocks come calling again. He acknowledged the uncertainty about Riverhead Resorts but noted that the town has never been given any reason to believe there is any doubt about the anticipated 2010 closing on the property by the company.

“They’ve been in contract with us for two years—the question is, can they close at this point?” he said last week. “We have to do our due diligence. But here’s the thing: [the Shinnecocks] have never come to me.”

The tribe’s leaders, consistently reluctant to discuss their casino prospects publicly, have said they expect their looming federal recognition approval, possibly as early as this spring, to spark negotiations with various state and county officials for a desirable location for a future casino.
“I think the state is going to have to sit down and talk at some point—that’s what everybody hopes happens,” said Tom Shields, an attorney for Gateway Casino Resorts, the Detroit-based developers who have financed the Shinnecocks since 2005 and would build the future casino in exchange for a cut of the revenues. “At this point, all the possibilities are possibilities—and, of course, maybe none of them are.”

The tribe has identified the Belmont Park racetrack in Nassau County as a possible location, which would require the permission of the New York State Legislature—a move already proposed by that area’s state assemblyman. Any tribal casino would also require a compact with the governor’s office to allow the sort of high-stakes games that a full-fledged casino offers. Such compacts are generally contingent on large revenue sharing with the state government.
Mr. Walter said similar revenue prospects would have to be offered to Riverhead for the Calverton property to be on the table again.

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