Oxford Casino may close after judge nullifies development permit

Posted July 23, 2012, at 5:37 a.m.
Last modified July 23, 2012, at 6:03 p.m.
John Morrison of Lewiston reacts as the slot machine he is playing racks up points at Oxford Casino recently.
Russ Dillingham | Sun Journal
John Morrison of Lewiston reacts as the slot machine he is playing racks up points at Oxford Casino recently.

OXFORD, Maine — One year — nearly to the day — after the Maine Board of Environmental Protection issued a permit granting development of the Oxford Casino, the permit was nullified by Superior Court Justice Michaela Murphy.

The order — signed Wednesday and delivered by mail to parties of the suit Saturday — finds that BEP violated its own permitting rules. The casino’s permit has been remanded to the state Department of Environmental Protection for reconsideration.

That action should, according to Androscoggin River Alliance attorney Stephen Hinchman, force the closure of the casino.

According to Hinchman, state law prohibits the construction and operation of a business that “may substantially affect the environment without first having obtained approval for this construction” from the BEP. With no valid permit in effect, he said, “they’ll have to shut down.”

“The law is pretty clear that without a permit they can’t operate. And, presumably, if the department [DEP] doesn’t shut them down, the Gambling Control Board will.”

Attorney David Van Slyke, chairman of the environmental practice group at Preti Flaherty in Portland who represents casino owner Black Bear Development, disagrees with Hinchman’s interpretation.

“This decision deals with certain technical aspects of one of the Oxford Casino’s DEP permits regarding project phasing under the Maine Site Location of Development Act. The Court’s decision did not indicate in any way that the casino poses any environmental harm, and the decision does not require the casino to shut down. The Oxford Casino is in agreement with the position of the DEP and the AG’s Office in this case and will continue to cooperate with the DEP and all regulatory agencies,” Van Slyke said Monday.

Contacted at her home, DEP Commissioner Patricia Aho, who had not seen yet seen the order, said she and her staff would “review the order on Monday and determine the appropriate review based on that order and our discussions, as well, with our licensing staff as well as the attorney general’s office.”

The Androscoggin River Alliance and 18 of its members filed their appeal of the BEP permit on Aug. 4 last year, about two weeks after the permit was issued. The group argued that the BEP was required to consider all three phases of the proposed casino project when issuing the permit, but only considered Phase I, that containing the 65,000-square-foot casino and parking lot. In making its application for permit to build Phase I, casino owners included some environmental impact information for phases II and III, which are expected to include expansion of the gaming facility, additional parking, a parking garage, restaurants, a spa, pool, conference center, RV Park and skating rink, anticipating these phases would come before BEP for permitting in 2012 and 2015.

The river alliance, in filing its petition challenging the BEP permit, argued that casino owners, known as BB Development, were required to provide environmental impact analysis for all three phases of the project, not just the first phase, and that BEP was required to consider the full impact in granting the permit for Phase I. In making its case, the alliance argued that the first phase of the project was equivalent to building water supply and sewage treatment for 64 homes on the 97.3-acre property. Once all three phases were complete, the load would be the equivalent of 186 homes on the parcel, an increased environmental impact that the BEP should have considered in granting the initial permit as a matter of law.

However, according to the suit, “in its rush to permit the casino project, the applicant (BB Development) failed to conduct the studies necessary to affirmatively demonstrate that either Phase I or the full project proposal meets legal standards.” And rather than “correct these errors and omissions, the department (BEP) actually accelerated the permitting process,” granting the permit in “less than half of the 180-day statutory review period, despite ongoing staff concerns regarding the lack of data,” violating state law and its own rules in the process by not considering cumulative environmental impact of the entire project when complete.

In its reply to the alliance, BEP argued that the only application before the department for permit approval was the first phase of the casino “as a single, complete and stand-alone project,” and the permit was issued based on a comprehensive review of that application. BEP did not consider or approve any other or future development at the site.

The department relied on language in Maine’s Site Location of Development Act, which provides that “in the absence of evidence sufficient to approve all phases of a proposed development, the Board may approve one or more phases of the development based on the evidence then available.” And, since the permit application before the department was limited to Phase I of the casino project, that’s the only evidence of environmental impact that was considered, developers argued.

Despite assertions of BB Development in its defense that the casino project only “might be followed by additional phases depending on what the market dictates,” Justice Murphy concluded that the project was always envisioned to be constructed in three phases based on written “phasing plan” maps for the project and testimony offered at public hearing that the Oxford Casino was to be a “5-year build-out in three phases.”

“While a casino can generally have an independent function as BB Development urges,” she wrote, “the resort and attendant buildings and infrastructure were clearly envisioned as part of a comprehensive plan,” which should have been considered during the permitting process.

Even the name of the project, she wrote, “the ‘Oxford Resort Casino,’ not the ‘Oxford Casino,’ clearly reflects the future plans for the project.”

In her ruling, Murphy determined casino developers failed to submit “present plans for all phases of a development” that were available as required by state law, and that “individual phases may be approved only if the overall proposed development, as represented by the evidence then available,” would comply with SLODA (site) standards.

This is required, she wrote, because it “would be senseless, and contrary to the legislative intent, to allow applicants to circumvent” state law “by remaining silent about those long-term impacts that can be reasonably anticipated, and about which evidence is available” for multiphase projects.

The court order remands the case to the state Department of Environmental Protection for “consideration of all evidence available before deciding whether to grant approval of this phase of development of the Oxford Resort Casino project,” forcing the BEP permitting process for Phase I — which is already operational — to begin anew.

According to Hinchman, whose firm is located in West Bath, his interpretation of the court order is that, “essentially, they’ll have to reapply [for BEP permit] in the context of the full project, not just Phase I, and so the department will have to review the site with the carrying capacity at full build-out and in the context of the plan proposed by the developer” to ensure the site is capable of sustaining the level of environmental impact at full development.

Assessing impact is an important part of the permitting process, Hinchman explained, because otherwise once a permit is issued and a project development proceeds, “the decision to choose a more appropriate location is foreclosed and you end up mitigating impacts instead of avoiding impacts.”

“We’ve said that from the start,” he said, “way back before they put a spade in the ground. If it’s not legal, they shouldn’t be going forward. They went forward at their own risk.”

And, he said, “if the answer to a lawsuit is to build your project as quickly as you can and dare a court to shut you down, to pull your permit, that’s a monstrous game of chicken. I don’t think it’s a smart way to do business.”

Oxford Casino opened its 24-hour operation on June 5 and has been open continually since then.

Jim Boldebook and Robert Lally, who are both part of Oxford Casino’s ownership group, had not yet seen Murphy’s order and declined comment. A message left for owners Rupert and Suzanne Grover was not returned. Efforts to reach the five members of Maine’s Gambling Control Board on Sunday were not successful.

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