U.S. officials may exempt Seminoles' hotel casino from local taxes

U.S. officials may exempt hotel casino from local taxes
By John Holland | South Florida Sun-Sentinel

COCONUT CREEK - One of the most important decisions for Coconut Creek, northwest Broward and the Seminole Tribe's casino empire will be made not by local officials, but by a group of bureaucrats in Washington, D.C.

The Department of the Interior alone will decide whether Coconut Creek and the county get $9 million a year in new property, payroll and hotel taxes, or just the jobs, traffic and disruption a massive new casino would bring.

The department alone will decide whether the largest hotel in Broward can rise on the corner of Sample Road and State Road 7, exempt from the usual building codes and inspections. The Interior Department's authority to turn public land into Indian trust is nearly absolute, federal courts have ruled, and no act of Congress can reverse it. In fact, until either John McCain or Barack Obama appoints the next Interior secretary, nobody knows who will have that final say at least a year from now.

"There is a lot of uncertainty for all of the parties, and there are significant issues to be contested," said Don Bauer, a Washington lawyer working for the city.

The Seminole Tribe wants to replace its aging casino with a sprawling, hotel-gambling complex far more luxurious than its Hard Rock Hotel & Casino in Hollywood. The tribe says the project will create hundreds of construction jobs and employ 5,000 people full time.

Initial plans call for a hotel 375 feet high and 24 stories, with 1,500 rooms, a spa, parking garages and 150,000 square feet of retail space.

But with only 4.8 acres of protected Indian land among its 50 acres of Coconut Creek holdings, the tribe must follow city codes and pay property taxes just like any other business if it wants to expand.

At least for now.

The tribe has petitioned the Interior Department to place all its Coconut Creek property into federal trust, freeing it from city and state jurisdiction. If that happens, the Seminoles could build as tall as they like, pay no taxes, and keep their bars and nightclubs open 24 hours a day.

Coconut Creek contends unregulated expansion would "significantly and detrimentally impact the city" with snarled traffic, more crime and other problems, according to the city's petition to the Bureau of Indian Affairs.

Residents of Margate, Coral Springs and Pompano Beach also are expected to feel the effects, particularly as late-night revelers frequent Seminole nightclubs after the rest of Broward County closes.

The proposed casino would anchor the south end of Coconut Creek's separate and ambitious Main Street project. A mile square stretching from Sample Road north to Wiles Road and bordered by Lyons Road and State Road 7, Main Street will include the soon-to-open Promenade shopping plaza, residences and other shops.

City Manager David Rivera isn't opposed to a new casino, saying it would complement Coconut Creek's makeover of the area. But the project's size is unacceptable, he said, adding he believes the Seminoles will build a quality product no matter what happens.

"I'm not going to worry about things we can't control or decisions made in Washington. The tribe has been a good corporate partner and we'll get all of the tax money," Rivera said, referring to a 1999 contract giving the city $2 million to provide water and other services to the casino.

Rivera's optimism is contradicted by the city's own filing with the Bureau of Indian Affairs. The filing accuses the tribe of violating the 1999 contract by secretly applying for trust land without notifying the city, and creates a dire picture for Coconut Creek and nearby cities.

"The tribe's request will result in negative economic effects and revenue loss due to the extraordinary and unanticipated scale of the proposed development," the city's submission says.

The city's seemingly conflicting statements underscore what's at stake: A glimmering new hotel casino would be a financial windfall for Broward County and Coconut Creek, but only if it stays on the tax rolls.

In trust, the tribe would not be subject to the lucrative hotel taxes that fuel Broward's tourist economy, and it wouldn't have to pay property, hospital and school district taxes like other businesses.

While city and several state leaders all agree the Seminoles have been great contributors to charity and local projects, Hollywood hasn't reaped any tax dollars from the $400 million Seminole Hard Rock Hotel & Casino.

Seminole Hard Rock Chief Executive Jim Allen would not comment on the project or the tribe's petition.

At the heart of the issue is a 1934 law written to "rehabilitate the Indians' economic life ... destroyed by a century of oppression." In recent years, the law has helped destitute tribes build lucrative casinos.

The Seminoles aren't destitute. Every man, woman and child in the 3,700-member tribe receives $126,000 in annual dividends from gambling profits, according to uncontested filings this year by tribe members in a child support lawsuit.

As for the city's finances, some protections are built into the 1999 services agreement, guaranteeing Coconut Creek about $4 million a year from the tribe. But taxpayers would pay more than $5 million each year in police and fire services for an estimated 20,000 visitors per day, according to the city's filing.

That Coconut Creek even finds itself in this position is more a result of smart business moves by the tribe than heritage. The Seminoles have lived for centuries on their reservation land in Hollywood, the Everglades and Tampa, but nothing ever connected them to Coconut Creek.

Then, in the early 1980s, the state needed part of the Hollywood reservation to build Florida's Turnpike. So state officials swapped 4.8 acres in Coconut Creek for a small patch of Indian land. A decade later, former Seminole Chairman James Billie, who had quietly bought an additional 45 nearby acres, decided to build a casino.

Because gambling could be conducted only on the trust land, Billie needed Coconut Creek's approval to build parking lots, restaurants and other buildings on non-trust land within city limits. That began an amicable relationship.

The best solution now is a compromise that guarantees money for Coconut Creek while leaving the Seminoles autonomous, said Nova Southeastern University law Professor Robert Jarvis. The city controls the surrounding streets and could make life difficult for the tribe, while the tribe has money that could keep Coconut Creek happy, he noted.

"I just can't imagine why either side would go out of their way not to have that cooperative relationship."

News Added: 20 October, 2008

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