A recent ruling decided in favor of the Seneca County Industrial Development Agency and its authority to grant financial assistance to the del Lago Resort and Casino project in Waterloo, Seneca County. A legal challenge to an August 2016 State Supreme Court ruling in favor of SCIDA’s payment-in-lieu of taxes agreement (PILOT) with del Lago was unanimously upheld on July 7, 2017 by the Fourth Department, Appellate Division.

The five-justice panel unanimously ruled that an IDA can provide financial assistance to a resort and casino development because it was not a “project” pursuant to General Municipal Law. The Fourth Department also held that an IDA Board can determine what constitutes the statutory undefined “commercial” project. The court went on to hold that the IDA Board is best positioned to weigh the need for financial assistance balancing company requests for financial assistance with community needs.

“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,” the Court wrote.  The Court determined SCIDA’s interpretation was not “irrational or unreasonable” in this case.

The Court also rejected petitioners’ contentions in their second cause of action, which claimed that  SCIDA’s award of financial assistance to the $440 million del Lago project was arbitrary and capricious or unlawful because the assistance was  not necessary to induce the project respondents to undertake development in Seneca County.

The Court said the express purpose of the IDA Act is to actively promote, attract, encourage and develop recreation, economically sound commerce and industry and there is no requirement that a particular project be financially needy in order to qualify for assistance.

The Court rejected the novel lower court finding and ruled that petitioners did not have traditional standing with respect to alleged environmental injuries resulting from the construction of the development because petitioners alleged that the development would have been constructed even without SCIDA assistance.  Thus there was no causal nexus between the alleged environmental injuries and the granting of financial assistance by SCIDA.

The full decision of the Fourth Department may be found at 2017 NY Slip Op 05538.