Sunday, May 10, 2009

Seven Bids Submitted For Aqueduct Casino by Tom Precious News

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Trying one more time, the state of New York accepted seven new bids – from major casino operators to real estate and racing interests -- to develop a casino at Aqueduct racetrack, an authority first approved for the facility back in 2001.

After a series of legal, financial, and political delays over the year, Gov. David Paterson is looking at the latest round of offers to help him bring a new rush of money into the state budget, which is precariously balanced on the hopes of an economic turnaround sooner than later.

The list of entities interested in running the casino in one way or the other include a who’s who of gambling interests, including Las Vegas casino mogul Steve Wynn, Penn National Gaming, Delaware North, Mohegan Sun, and others.

The new bids all had a 5 p.m. deadline May 8 – and the bidders, cautious that their competitors could get information on each others’ offers before the clock ran out, stretched things right up to the last minute.

None of the bidders provided immediate financial details on their offers, and the Paterson administration, in a break with past efforts by the state to provide some attempt at transparency, would only provide the names of the bidders.

The bidders include a team led by Delaware North, a Buffalo gambling and entertainment company which last fall had won the rights to develop a 4,500-slot machine casino at Aqueduct. But the tighter credit market found the company scurrying to raise the $370 million offer it made the state -- $120 million more than the nearest bidder. The Paterson administration in March pulled the plug on the Delaware North deal when it could not come up with the cash by March 31.

Delaware North revealed its list of partners, but the governor’s office would not make public any of the other possible partnerships involved in the other six bids, and company officials with those entities could not be immediately reached for comment.

Others vying for the potentially lucrative deal include SL Green Realty Corp., a large Manhattan real estate development company that once had been a partner of Delaware North’s in a previous round of bidding – as part of a group called Empire Racing Associates -- that went nowhere. SL Green recently sued Delaware North in a dispute involving its past business dealings. SL Green’s partners include Hard Rock Entertainment and Jeff Gural, a Manhattan real estate developer and operator of two upstate harness tracks, Tioga Downs and Vernon Downs.

There was also some confusion Friday night. The governor’s office said Mohegan Sun, which sought the casino deal last year, had submitted a proposal for the project. But a Connecticut newspaper, the Norwich Bulletin, said the company decided against trying for the project again. Company officials did not immediately respond to an e-mail request for information.

A source, who spoke on condition of anonymity, said Mohegan Sun did not submit a formal bid, but offered a proposal to the state that included no up-front money for Albany and a proposal to let the state build the facility and Mohegan Sun would run it.

Penn National Gaming is also jumping into the Aqueduct bidding wars. Joseph Jaffoni, a spokesman for the company, declined comment.

A group called Development Associates, identified by the Paterson administration as a subsidiary of Wynn Resorts Ltd., also submitted a plan to run a casino at the track.

Besides Delaware North, Aqueduct Gaming includes Saratoga Gaming and Raceway; the Peebles Corp., the nation’s largest African-American real estate development company, and McKissack & McKissack, billed as the country’s oldest African-American, women-owned design and construction firm.

Adding to the confusion Friday night, though, is word from the Paterson administration that Peeples put in a separate bid beyond the one with Delaware North to run the casino. It is not known if the company has partnered with any other entities.

William Bissett, president of Delaware North’s Gaming & Entertainment division, said the group’s bid would provide "substantial revenue, jobs, and economic development’’ to the state and the Queens neighborhood surrounding Aqueduct.

"Our commitment and dedication to this project are steadfast. We are the best choice for Aqueduct VLT gaming development because of our financial commitment and strong experience in gaming and entertainment development and operations,’’ he said in a statement.

Finally, a mystery entity called Aqueduct Entertainment Group, submitted a bid.

"The franchise will be awarded by joint agreement of the governor, the majority leader of the Senate, and the speaker of the Assembly. The Governor's office and representatives of the majority leader and the speaker expect to evaluate these proposals over the coming weeks and award the franchise once the review has been completed and an agreement among the parties has been reached,’’ Morgan Hook, a Paterson spokesman, said in a statement.

The Aqueduct casino was approved in the weeks after the 2001 terrorist attacks as a way to help bring new revenues to the state. But a series of missteps, first with the New York Racing Association and its legal and financial problems in the past, and then various delays in three different gubernatorial administrations, all contributed to what is only still a proposed casino.

Besides the state, horsemen and breeding funds that will share in a portion of the revenues are anxiously awaiting the opening of the casino.

The new memorandum of understanding is less forgiving than the last round: the winning bidder must pay the full amount of their franchise fee payment within 10 days of the MOU’s approval by the parties. The state would float bonds up to $250 million to help finance the casino, which would be paid back by the winning bidder.

The state has made clear in the MOU that it wants no part in constructing a casino, which would seem to leave Mohegan Sun out of the running.