County GOP majority mum on OTB hotel deal [Lockport Union-Sun & Journal, N.Y.] – InsuranceNewsNet

July 30—Erie County Comptroller Kevin Hardwick is pressing officials at Western Regional Off-Track Betting Corp. for more details about the public agency’s purchase of a hotel in Batavia.

Hardwick has also asked why OTB continues to provide health insurance benefits to part-time board members, a practice that both the New York State Comptroller and the New York State Attorney General have previously deemed improper.

Members of the Republican-led Niagara County Legislature do not appear to be interested in following Hardwick’s lead where asking questions about OTB’s operation is concerned.

Legislature Chair Becky WydyshR-Lewistondid not answer questions about whether Niagara County should weigh in on OTB’s hotel purchase or the agency’s health insurance practices.

Instead, she issued a statement through the county Public Information Officer Kevin Schuler on behalf of “all majority members” in which she said Niagara County works through its representative on the OTB board, Eliot Winter.

With regard to the hotel deal, she indicated that both the state comptroller’s office and New York State Gaming Commission have “signed off on the purchase and financing of the hotel” and that, “thus far, the purchase seems to have been very successful for WROTB and, by extension, the member counties.”

“I would expect if there is some reason to question this purchase, those agencies would be the proper authority to review it,” Wydysh said in reference to the hotel near Batavia Downs that OTB purchased in July 2021 for $7.5 million.

As was first reported by the Buffalo-based news outlet Investigative Post and its television news partner, WGRZ, Hardwick earlier this month sent a pair of letters to OTB’s president and CEO, former Niagara County Republican Committee chairman Henry Wojtaszekasking for more detailed information about the hotel transaction and the health insurance coverage for OTB board members.

In a letter dated July 15Hardwick explained that OTB’s board authorized the sale of 35,000 square feet of property at Batavia Downs to a group of investors for $605,000 back in 2015. The investment firm, ADK Hospitality, LLCbought the land for the purposes of building a hotel on-site. Investigative Post reported that state records show ADK formed one month before the land sale was approved.

Hardwick’s letter identifies the investors in ADK as: Anthony J. Baynes (former chair of the Erie County Fiscal Stability Authority), Kent Frey (Frey Electric Construction), David McNamara (Hodgson Russ law firm and former counsel for the fiscal stability authority), Laszlo Mechtler (Dent Neurologic Institute) and James and John Basil (Basil family of car dealerships).

According to Hardwick’s letter, an 84-room, 50,000-square-foot hotel opened on the land in late October 2016. Hardwick, citing “various reports,” indicates that ADK spent between $5 million and $5.5 million constructing the building. The project received $600,000 in public incentives under an in-lieu-of-taxes agreement authorized by the Genesee County Economic Development Corp.

Following the start of the COVID-19 pandemic in March 2020OTB’s board approved the purchase of the hotel from ADK in a deal that was finalized last July.

The purchase price was $7.5 millionwhich Hardwick described as a “considerable markup.”

In his letter, Hardwick asked Wojtaszek why OTB would engage with an investment group that never developed a hotel before. He also asked for detailed information about how OTB determined the sale price of the land, who initiated the deal and how much money OTB has spent on rooms in the hotel, before and after it owned it.

In a separate letter, dated July 18Hardwick asked for “information and clarification” about OTB’s ongoing practice of providing health, dental and vision benefits to members of the agency’s board of directors.

Both the state attorney general and state comptroller’s office have issued opinions that OTB board members are not legally entitled to health insurance perks. In addition, a private attorney hired by OTB has agreed with those assessments.

In his letter, Hardwick asks Wojtaszek if OTB intends to terminate health insurance benefits for current directors and whether directors will be eligible for benefits once they either separate from the agency’s board or retire.

The Niagara County Legislature’s minority caucus leader, Chris RobinsD-Niagara Fallsdescribed OTB’s ongoing practice of providing extensive publicly funded health insurance coverage to board members who show up for one or two meetings per month in one word: “Shameful.”

“No one on these boards should be receiving that benefit,” Robins said. “For them to still be receiving it would be borderline criminal at this point.”

Robins also said that while the leadership in Niagara County doesn’t seem interested in looking into OTB, he is happy that at least Erie County is inquiring.

“The counties are meant to provide oversight over WROTB,” Robins said. “I’m glad to see Erie County doing it, and I’m hoping that the state, as well as the other counties, come on board.”

In her statement, Wydysh said OTB’s private legal counsel, noted Buffalo defense attorney Terry Connorsis “still in discussions with the state attorney general’s office on the issue of the health insurance packages.”

Robins said he thinks the activities of WROTB should be solely business related, and apolitical.

“It can be a moneymaker for Niagara Countybut I think it needs to be run like a business and not like a political party,” Robins said. “Right now, I think separating those would be good news for the counties.”

Formed in 1973, OTB is a public benefit corporation that oversees the Batavia Downs harness racing track and casino as well as local OTB branches and EZ Bet locations across Western New York. Revenue generated by OTB is shared by the cities of Buffalo and Rochester and 15 counties, including Niagara County.

The agency has been subject to increased scrutiny in recent years, with New York State comptroller Thomas DiNapoli’s office issuing a pair of audits last fall that encouraged the agency to “clean up its operation.”

State auditors flagged OTB officials for improperly helping themselves to tickets to Buffalo Bills and Buffalo Sabres and other events that were paid for by the agency. In addition, auditors determined that OTB’s President and CEO, former Niagara County Republican Party Chairman Henry Wojtaszekfailed to properly account for personal use of his agency issued vehicle.

Wojtaszek and other OTB representatives have repeatedly denied any wrongdoing.

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(c)2022 the Lockport Union-Sun & Journal (Lockport, NY)

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