Developer Parlato will challenge casino laws by installing slot machines

By Bill Michelmore - NEWS NIAGARA BUREAU

July 11, 2008

NIAGARA FALLS — There’s the regular way of doing business, and then there’s the Frank Parlato way.

The feisty businessman said he will put slot machines on the ninth floor of a building he controls in downtown Niagara Falls near the Rainbow Bridge to protest the tax-free advantage the Seneca Nation has over all other businesspeople in Niagara Falls and Buffalo who have to pay sales and property taxes.

By way of revenge and in defiance of state gaming laws, Parlato said he plans to install the slot machines in the former Occidental Chemical center, which he renamed One Niagara.

He said he’ll start with six slot machines he already owns and see where his gaming venture leads.

“This isn’t about money,” he said Wednesday. “What do the Senecas have — 3,000 slot machines? This is about equality and being treated fairly on a level playing field.”

Parlato has been battling the state for several years over the Seneca matter, noting he has to pay $1,000 a day in real estate taxes on his building, while the Indians, who “operate a gold mine across the street, pay no taxes.”

When Parlato acquired the building by foreclosure in 2002 after the former owners failed to build the long promised AquaFalls underground aquarium, Parlato inherited a big chunk of unpaid taxes. He has been paying it off in bits and pieces, making a payment of more than $127,000 last week. He said he still owes about $800,000, which he feels he shouldn’t have to pay as long as the Seneca Nation gets off tax-free.

Niagara Falls Mayor Paul A. Dyster said he had no comment on the Parlato matter.

Parlato said he will take up the issue at a town meeting he plans to hold in his building in September.

“I’m asking people to stand up for their rights and demand equality,” he said.

Paul Grenga, an attorney with law practices in Niagara Falls and Lewiston, predicts a lot of support.

“Every property owner in Niagara Falls pays more real estate taxes than that billion-dollar casino,” Grenga said. “If this case ever went to trial, I would want homeowners on the jury.”

The state has used casino gambling as a way to resolve land claim disputes involving Native American nations in New York, most notably the Senecas and Oneidas, using the federal Indian Gaming Regulatory Act of 1988.

In order for the state to run casinos, like the province of Ontario does, the state Constitution requires that an amendment be approved by two separately elected sessions of the State Legislature, then in a statewide public referendum.

State voters have never approved such a measure and efforts by lawmakers to bring gambling to a statewide vote failed in the late 1990s.

As for the state gaming law Parlato is breaking, Grenga said it should be changed.

“A lot of gaming laws were aimed at organized crime, which may have made sense at the time,” he said. “But today, when gambling is legal on one side of the street and illegal on the other, the law is now so inequitable it needs to be challenged.”

Parlato has had trouble with city officials since he took control of One Niagara. Aside from tax disputes, he’s also raised operational concerns. Last month, Thomas J. DeSantis, the city’s senior planner, said his department annulled site plan approval for the One Niagara building after Parlato failed to comply with a list of conditions set by the city’s Planning Board in March 2007.

From the roof of the 10-story building on Rainbow Boulevard, Parlato has a 360-degree view of the Niagara peninsula.

One entire side of the building is taken up with the Niagara Falls, Ont., skyline of towering hotels and casinos. The opposite side is dominated by the glimmering 20-story Seneca Casino & Hotel.

The sight makes Parlato a little queasy.

“Every year, 17 million people visit this city, and it’s broke, while across the river you have a boom town. And then,” he said, looking east at the casino, “there’s the Seneca Nation — an island unto itself that sucks the life out of Niagara Falls and gets off scot-free.”

Parlato then looked up at the American flag flying high atop his building.

“This flag represents freedom and equality, and that’s what I’m fighting for.”

bmichelmore@buffnews.com