KJ sues over casino and sewer

South Blooming Grove accused of promising casino developers sewage capacity

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By Nathan Mayberg

— One of the biggest casino proposals in the Hudson Valley could be shot down over sewage.

The Village of Kiryas Joel has filed a lawsuit in state Supreme Court charging that the Village of South Blooming Grove gave guarantees in June to Penn National and The Cordish Companies for sewage capacity for the proposed casino in South Blooming Grove, which the village had no control or power over, according to court documents.

Orange County owns and operates the sewer district for which the village offered to make capacity available for the casino.

Attorney Michael Sterthous, of the Albany law firm Whiteman, Osterman and Hanna, filed the lawsuit, which was entered in court on Aug. 15.

In the suit, Sterthous said South Blooming Grove supported the casino and offered the sewage capacity "in exchange for staggering amounts of financial compensation," which includes a $10 million payment by the casino developers to the village, a $2.25 million payment for the village's public safety department and $1 million in road improvements.

Sterthous and Kiryas Joel cited the village of South Blooming Grove Board's host agreement with the companies over their proposed casino as the basis for the suit. The village board approved the agreement in June.

‘No authority to promise’

In the agreement, the village pledges to "pursue all reasonable efforts to make 260,000 gallons per day of sewer capacity available to the project, at customary rates." The figure of 260,000 gallons per day of sewer capacity is the amount the village believes it has in additional capacity, according to the host agreement.

South Blooming Grove has sent notice to Orange County Executive Steve Neuhaus requesting verification of this additional sewage capacity, according to the agreement.

"The village has no authority to provide through sale or otherwise any district wastewater treatment capacity to a casino without a written agreement with the county and a determination by the district that excess capacity exists," wrote Sterthous.

A message left with Orange County Attorney Langdon Chapman was not returned. Village of South Blooming Grove Mayor Robert Jeroloman did not return a message seeking comment.

In return for giving the casino the sewage capacity, the casino developers would be responsible for constructing the sewer service connection infrastructure.

The South Blooming Grove would be responsible for operating the sewage system but would not charge the casino hook-up fees, based on the host agreement.

The 200,000-square foot casino with 3,200 slot machines has been proposed on a 124 acre site on Route 208 in South Blooming Grove near Cassidy Driving Range off exit 130.

The lawsuit comes at a time when the owners of 507 acres in the unincorporated section of the Town of Monroe have petitioned to be annexed into the Village of Kiryas Joel, a development that also would put pressure on sewer and water capacities.

Overburdened sewer capacity

Kiryas Joel states in the lawsuit that the casino is in "close proximity" to its community and alleges the casino "will overburden the limited sewage treatment capacity" at the Orange County Harriman Wastewater Treatment Plant, "and adversely affect existing members of the Orange County Sewer District," which includes Kiryas Joel.

Kiryas Joel also claims the casino would require "large volumes of water that will adversely affect (its) water resources.

The Village of South Blooming Grove is less than five miles from Kiryas Joel.

The lawsuit alleges that the host agreement approved in June to support the casino violates state environmental laws, since no environmental review was done.

The lack of an environmental review is also at the center of a lawsuit against the town of Tuxedo over its support for a separate casino.

Further, the lawsuit cites objections by the Village of South Blooming Grove board to a water pipeline Kiryas Joel planned to build to connect to the New York City Catskill Aqueduct.

The lawsuit names the village of South Blooming grove, the South Blooming Grove Planning Board and South Blooming Grove Zoning Board of Appeals, in addition to the town of Blooming Grove, Penn National, The Cordish Companies, OCCR Enterprises (the limited liability company proposing the casino for the two gaming companies) and the Orange County Sewer District.

The village and town of South Blooming Grove boards both approved resolutions of support for the casino.

Town of Blooming Grove Supervisor Robert Fromaget said he had no idea why the town was named in the suit, since it centers on actions by the village of South Blooming Grove, which is part of the town.

Fromaget said he and the board agreed to pass a resolution in support of the casino because "we have very few (commercial) ratables." Fromaget said he personally voted against the state referendum allowing casinos in the region.

Reporter Nathan Mayberg can be reached at comm.reporter@strausnews.com or by calling 845-469-9000 ext. 359.

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