The 65-page report by the city Department of Environmental Protection rejects many of the conclusions in an environmental impact statement submitted by developers of the proposed golf resort, and states outright
that the city will not grant two necessary permits to the resort unless significant changes are made to the impact statement or the proposal itself.

The proposal by Crossroads Ventures LLC, a company led by Catskill Corners developer Dean Gitter and backed by four investors, calls for the construction of two hotels, timeshare units and two 18-hole golf courses on 573 acres straddling the border between the towns of Shandaken in Ulster County and Middletown in Delaware County, near the Belleayre Mountain Ski Center. If approved, it would be the largest development project in the Catskills in recent history.

The Department of Environmental Protection report was submitted to the state Department of Environmental Conservation on Thursday, at the close of a public comment period on the draft environmental impact statement. The
impact statement is supposed to show how any harmful effects from the proposed resort on the region's ecological system would be mitigated or eliminated.

The state environmental agency is overseeing the environmental review of the project while the city agency has "party status" because of the proposed resort's proximity to watershed lands.

The city spent about $600,000 to review the impact statement, including money for outside experts and $100,000 for the towns of Shandaken and Middletown to fund their own site plan review studies.

The city agency, according to its report, says the impact statement "fails to take a hard look at the project's potential for significant adverse impacts on the environment because it relies upon faulty assumptions and inaccurate predictive models as the basis of its conclusions."

The report goes on to criticize in detail the science behind a number of assertions in the draft impact statement, a document Gitter had called the most thorough and comprehensive for a resort proposal in the history of state environmental law.

Most of the criticisms, including claims of faulty analyses of storm-water runoff, traffic conditions and socioeconomic impacts, have already been leveled by a host of environmental groups and citizens opposed to the project. The report, however, represents the most comprehensive and best funded analysis of the draft impact statement so far.

"The city is sending a very clear signal to the watershed communities that large development projects are not welcome in the watershed," said Dan Ruzow, an attorney for Crossroads and former assistant commissioner of the state Department of Environmental Conservation. Ruzow said the Department of Environmental Protection has set a new precedent by taking such an activist approach to review.

"To my knowledge there has never been a review by an involved agency undertaken in the fashion (the Department of Environmental Protection) has done."

Gitter called the agency's comments a declaration of war on the very premise of meaningful economic development in the area and a violation of the spirit of the 1997 Memorandum of Agreement under which New York City watershed
communities promised to serve as stewards of the watershed in return for the city's support in bringing economic development to the region.

"The intent of the city's salvo here is to pursue a policy that there will be no economic development in the Catskills," said Gitter, who argues that year-round tourism is the only viable alternative to the region's declining manufacturing and forestry industries. "This is an effort to depopulate the Catskills," he said.

Eric Goldstein, an attorney with the Natural Resources Defense Council, whom Gitter has accused of pressuring the city to adopt an anti-development stance in the Catskills, said the scope of the Department of Environmental Protection study was warranted by the unprecedented scale of the proposed resort.

"The premise that the city does not want to see economic development in the Catskills is ridiculous," said Goldstein. "If they tell Donald Trump that he can't put up the world's tallest building, does that mean there can be no more residential development in Manhattan?"