Thursday, February 4, 2010

Gov Finally Makes a Decision on Aqueduct Bids by Stephen Geffon -

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The long-awaited selection of a bidder to build and run the racino at Aqueduct Race Track in Ozone Park is finally over.

Last Friday afternoon, Governor David Paterson announced that Aqueduct Entertainment Group has been chosen to operate Aqueduct’s 4,500 video lottery terminals under a 30-year contract.

In addition to installing 4,500 video lottery terminals, AEG’s plans include a 300-room hotel, restaurants, retails outlets, a 2,500-seat entertainment center, a 2,400-car garage, banquet and conference halls, and an Aqueduct Racing Museum.

The bidding process for the VLT franchise had to be restarted last April when Delaware North could not come up with the entire promised $350 million up-front payment by March 31.

Delaware North was a bidder in the new process, and sent out a statement following the announcement stating that it was still interested in running the new Aqueduct.

In his own statement, Paterson said he thought AEG had the strongest proposal.

“AEG has both the financial viability and ability to pay the required upfront licensing fee,” said Paterson. “All of the groups have valid proposals, but AEG presented a comprehensive bid that enjoys community support and also offers strong marketing appeal."

Assembly Speaker Sheldon Silver issued a statement shortly after the announcement noting that he agreed with Paterson, subject to the following conditions, including increasing the up-front licensing fee from $200 to $300 million and strict oversight by the State Diviion of the Lottery throughout the entire process.

State officials said they expected to complete an agreement in 30 days with AEG, which plans to open a casino within six months. The racino is expected to generate $1 million per day in revenue to the state, helping to alleviate Albany's $7.4 billion deficit.

“I think that AEG has demonstrated to the community and to the elected officials that it is prepared and that it is ready to begin the necessary steps to get Aqueduct up and running,” said the area's councilman, Eric Ulrich. “They have a solid financial foundation...and most of all I think that they are ready and willing to be good neighbors.”

Community Board 10 Chairwoman Betty Braton said, “AEG has been in communication to discuss their proposal with us throughout this lengthy process and have always been open to hearing our comments. Community Board 10 looks forward to working with AEG as they bring this long-delayed project to fruition."

Although AEG has been picked by Paterson, Assembly Speaker Silver, and Senate Conference Leader John Sampson, Delaware North appeared to suggest that the door is still open,

“We understand that the governor has made a recommendation for an operator for the facility. We also understand there are numerous conditions to the selection,” said Delaware North president William Bissett. “Without question, we still remain very interested in the Aqueduct project.”

Penn National Gaming, another bidder for the Aqueduct VLT’s, was also understandably unhappy with the AEG pick.

“We were extremely shocked and dismayed by the governor’s announcement, given we offered over $100 million more to the state than AEG in our bid,” said Eric Schippers, Penn National senior vice president. “In addition, our proposal complies with the conditions outlined by the speaker for the winning bidder.”

"Our understanding is the decision is contingent upon certain further conditions being met,” commented yet another bidder, SL Green. “We question whether the AEG group can meet such conditions, and we are awaiting word on that.”

Waiting on the sidelines is the Shinnecock tribe of Long Island, which, according to the New York Times, expects to get federal recognition later this year, and wants to promptly build a casino, possibly at the Belmont Park racetrack just a few miles from Aqueduct.