Gov. David A. Paterson’s office announced on Thursday that the company he had chosen to build and run a casino at the Aqueduct racetrack could not pass muster with state licensing officials and would not be awarded the lucrative contract.
A senior administration official said the company that had been selected, Aqueduct Entertainment Group, had supplied insufficient financial details for some of its investors. In other cases, the state’s Lottery Division was not comfortable licensing some of the company’s investors. The state had given the company until Tuesday to supply the information.
Barry Berke, a lawyer for Aqueduct Entertainment Group, called the state’s decision “arbitrary and capricious” and suggested the group is considering filing a lawsuit.
“In the event that AEG is not given an opportunity to address the issues raised by the Lottery, and the decision to reverse the prior selection of AEG as the successful bidder is not reconsidered, AEG intends to pursue all available remedies,” Mr. Berke said in a statement.
Under the advice of his lawyers, the governor has recused himself from the process.
Had its bid been approved, Aqueduct Entertainment Group would have had to come up with a $300 million licensing fee by the end of March, money that would have helped the state’s beleaguered finances.
The governor’s office said it now wanted to pursue a traditional, though rapid, procurement process, rather than the process that has been underway for eight years, of trying to reach a consensus pick among the leaders of the legislature and the governor.