Islandia to get $47 million from casino company

The Village of Islandia will receive more than $2 million a year for the next two decades from the company developing a Suffolk OTB casino with 1,000 video lottery terminals as part of the deal allowing the betting parlor, village officials have announced.

Mayor Allan M. Dorman said in a news release that the $47 million “taxpayer relief agreement” would cut the village portion of Islandia homeowners’ property tax bills by about half.

The agreement is the first time Islandia officials have specified the financial benefit the small Islip Town village expects to receive from its approval of the controversial casino. Previously, officials had mentioned a tax relief plan but had not divulged figures.

Separately, Suffolk OTB officials have said the county is guaranteed at least $2 million in revenue from the casino during its first full year of operation and $3 million in its second year. It could get more in those years if revenue exceeds certain levels. In the third through 10th year, the county gets $1 million a year, but otherwise profits go to creditors until they’re paid off.

Buffalo-based Delaware North, which is completing its purchase of the Islandia Marriott Long Island hotel, plans to lease space to OTB for the casino. OTB officials expect to open the facility in the hotel by the end of the year.

OTB officials have said the casino would help the financially ailing agency escape bankruptcy. An earlier plan to build the casino in Medford was withdrawn because of opposition from residents and Brookhaven Town officials.

Dorman said Delaware North agreed to pay the village $2.35 million per year for 20 years, plus a single payment of $1.53 million for improvements to the village-owned First Responders Recreation Baseball Field. The village’s approval of the casino had hinged on the agreement with Delaware North, Dorman said.

“Today, I am proud to say that this agreement will once again provide real tax relief to village residents,” Dorman said. “I have lived in Suffolk County for 37 years. No one has ever given me real tax relief. When was the last time you heard that government had a plan to reduce taxes by up to 50 percent?”

The agreement came as welcome news to supporters.

“There’s a lot of people in this town who are retired, elderly, and they’re living on a fixed income,” said Thomas Brauner, a retired draftsman. “It will give me more money to spend on groceries, for one. I could eat a little better, maybe go out once in a while.”

The casino’s detractors said the tax relief plan would not compensate residents for the disruption to their lives.

“The social costs far outweigh the monetary benefit, of any kind,” said village resident Jennifer Tomasino, who lives next to the hotel.

Ronkonkoma Civic Association president Bruce Edwards called the casino “just another patronage mill” that was “not helpful to the residents.”

“It’s just gonna cost us. We see an increase in police costs, fire and rescue costs, addiction costs,” related to the casino, Edwards said. “Those costs come from everybody’s pockets.”

About a hundred anti-casino protesters gathered outside the Suffolk County offices in Hauppauge on Thursday afternoon.

As protesters hoisted and waved signs saying “No Casino” at honking cars passing by on Veterans Memorial Highway, state Assemblyman Michael Fitzpatrick (R-Smithtown) said he’s opposed to “the expansion of the gambling in the state.”

“They’re trying to maintain or prop up a failed business model,” Fitzpatrick said, and referred to video casinos as “mechanical pickpockets.”

“I think there will be a day in the future when Mayor Dorman says ‘you know what, I’ve made a huge mistake,’” he added.

The village board on Aug. 12 approved a special permit allowing the casino in the hotel, on the North Service Road of the Long Island Expressway. Dorman has said the permit would be reviewed every two years.

In a statement, Delaware North spokesman Glen A. White said the company was “pleased that this project will benefit the Village of Islandia and its residents, as our gaming facilities are always good neighbors, establishing strong, cooperative relationships with our host communities.”

Under a complex contract with OTB, Delaware North is expected to be paid a percentage of the casino’s take after paying gamblers and a portion of profits after expenses are paid.

Village residents who supported the casino said it would create jobs and lower taxes. Dorman has said Delaware North had agreed to improve security at the hotel.

Opponents, including some residents of Islandia and neighboring communities such as Ronkonkoma and Hauppauge, said it would generate crime and traffic and lower property values.

OTB officials have said the betting parlor is expected to attract an average of about 6,000 customers daily and create about 200 casino jobs, plus an additional 100 jobs in the hotel’s expanded restaurant and bar.

Revenue generated by the casino also will help OTB pay an estimated $17 million owed to various creditors as part of bankruptcy settlements, officials have said.

In his statement, Dorman said the Delaware North agreement would “provide more jobs and help local businesses.” The money for the park will allow the village to avoid having to borrow money to upgrade the facility, he said.

“The approval of Delaware North’s application and the taxpayer relief agreement is good public policy, not only for village residents, but also the surrounding communities,” Dorman said.

By Carl MacGowan

carl.macgowan@newsday.comCarlMacGowan

Carl MacGowan is a Long Island native who covers Brookhaven Town after having previously covered Smithtown, Suffolk County courts and numerous spot news and feature stories over his 20-plus year career at Newsday.