Monday, July 12, 2010

New York Rejects Two Aqueduct Bidders; Genting Malaysia Remains by Michael Quint - BusinessWeek

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Genting Malaysia Bhd., owner of casinos in Singapore, the Philippines and the U.K., is the only surviving bidder for an electronic slot-machine parlor at New York City's Aqueduct Racetrack after two U.S.-based firms were disqualified, the New York Lottery announced.

One excluded proposal was submitted by a group led by SL Green Realty Corp., Manhattan's biggest office landlord, in a bid with partners Hard Rock International and Toronto-based Clairvest Group. The other was from Wyomissing, Pennsylvania- based Penn National Gaming Inc., which operates 19 casinos and racetracks.

“The proposals did not conform with the requirements of the competition and, instead, attempted to negotiate for terms more favorable to the bidders,” Lottery Director Gordon Medenica said in a statement. Neither New York-based SL Green nor Penn National will be eligible for reconsideration even if Genting isn't approved, he said.

The project, called a racino, would include more than 4,000 video slot machines plus a hotel and other facilities located at the racetrack for thoroughbred horses in the New York City borough of Queens. The developer of the project, which has been planned for nine years, would pay a minimum $300 million up- front fee to the state, which would issue $250 million of bonds to help finance the facility, according to budget documents.

Lottery Evaluation

The Lottery's evaluation of Genting's bid will continue, and it is not guaranteed the award, even though it is the only remaining bidder, said Jennifer Given, a state spokeswoman. The Lottery expects to announce its recommendation by Aug. 3, she said. The winner must also be approved by the governor, the president of the state Senate and the speaker of the Assembly.

The Lottery's announcement listed 19 aspects of the SL Green proposal that were called “non-responsive” by the Lottery. The Penn National proposal was disqualified on eight counts.

Genting Malaysia, based in Kuala Lumpur, said July 1 it will buy the U.K. casino businesses of Genting Singapore Plc for 340 million pounds ($510 million) to expand overseas. Both companies are controlled by Genting Bhd., which has holdings in hotels, palm oil plantations and cruise lines.

Spokesmen for SL Green and Penn National couldn't be reached for comment.