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Sunday, October 12, 2008

Big A Dispute Tinged with Lobbyists and Politics (what else is new?)

- Speaker Sheldon Silver and the Assembly Democrats stand with Governor Paterson in favor of Delaware North's selection to run the Aqueduct racino.

"We support the governor's choice," said Sisa Moyo, spokeswoman for the Assembly speaker. "We understand there are some community concerns, and we will work with the governor to encourage all parties to work together to address the concerns." [Associated Press]
It's worth recalling at this point that, as noted here in the past, Delaware North's lobbying efforts have been led by Patricia Lynch, and that Ms. Lynch is a former top staff member of Speaker Silver, for whom she worked for eight years. And that Ms. Lynch's team includes Brian Meara, also a former key aide to the Assembly Speaker.

While I did, in the last post, question the motives of the Senate Republicans in light of the Senate elections, it is a cold fact, as we saw in the Queens Chronicle article last week, that the community is extremely unhappy with Delaware North, which, as opposed to the other bidders, has made no effort whatsoever to engage and involve it in their plans. And, as a commenter noted, Democratic Assemblywoman Audrey Pheffer, is not pleased either.
"I'm disappointed. They were not my first choice, or my second choice,'' she said. She said the other bidders offered more "pizzazz''.

"We don't want just a fancy OTB parlor,'' she said. [Albany Times Union]
So, for whatever reason, the GOP is raising legitimate concerns regarding both the local issues and the lack of any vision beyond the inflated downpayment that has apparently won the day for Delaware North. However, why the Republicans didn't raise these specific and worthy objections until after the governor made his selection, I don't really know. That lends credence to the notion that they didn't have the matter on their radar screens at all until Paterson's endorsement of Addabbo in the Senate race. But whatever the motive, they're on the right side of the issue here in my opinion.

Here's Seante Majority Leader Dean Skelos' statement on the matter, and thanks to another reader for that. A spokesperson from the governor's office replied:
"It is shocking that Senator Skelos, who claims to understand the importance of this revenue stream and who has repeatedly and publicly called on the governor to award this contract, has now decided to stall a significant economic development project."
I'm wondering if this will all lead to the matter of slots at Belmont being brought back into the picture. Skelos is a strong proponent, and Silver has been the man mostly responsible for blocking it. Perhaps we'll see just how badly the Speaker wants to see his friends' client prevail.

14 Comments:

Anonymous said...

Nice job Alan relaying some of the politics and motivations behind this deal to date. DelNorth should not be permitted to ammend its bid to include what it sounds like it should have had in the first place, a required community economic development piece. Politcs and lobbysists aside, if the DelNorth bid was deficient on its face, and outside the bounds of the bidding rules by not including an economic development piece, the bid should just be discarded. This is something that all (3) men in the room should agree to without reservation. If Capital Play & S.L Green obeyed the rules of then Governor Spitzer's engagement, and based their bids accordingly, then one of them should be the winner.

Anonymous said...

Recently, Governor Patterson's position as reported by his spokesman Sean Maloney; "the Governor is not interested in a quick fix for the budget deficit." So why the pressure by the Governor's office to take this deal with DelNorth on account of the sizable upfront payment, when according to other bidders the state will be losing out on billions of dollars of revenues throughout the term of the VLT contract? Isn't the DelNorth reccommendation exactly what NY said it wasn't going to do, fire sale state assets? Granted its not a real "sale" this long term VLT partnership contract, but foregoing many billions of dollars in additional state revenue from the other bidders, over the next 25-30 years, seems like irresponsible governmental behavior to me. Am I missing something here?

Anonymous said...

I think it is sad that the State of NY namely the governor is putting politics before the people. It is insulting to the people of Queens who have made their preference known in Capital Play/Mohegan Sun however the governor chooses to ignore the simple people who may elect him or at this point not elect him in his true run for the office he holds. What a mess, Aqueduct and horse racing again lose due to a lengthy delay and now this sub par answer from the governor. This isn't a party issue, as Pheffer is clearly dissenting it is a you scratch my back and I will scratch yours. The good news is that the people will again have the final say. Thanks governor.

Anonymous said...

Has anyone actually seen a quote or sound-bite from Governor Patterson on this deal? If he really liked it, he'd be out there promoting it.

Anonymous said...

All quotes have been from the "spokesmen" of Paterson, as Paterson is a smart pol he is probably not going to go completely on the record until he feels it is safe. This is a "Spitzer esque" decision maybe Delaware North has something on the governor, clearly anyone making a decision for the betterment of NY would choose the best financial option not the short term gain of which does nothing to help taxpayers. Consultants hired by the Governor provided supporting information that Mohegan Sun was a far superior operator then Delaware North or Hard Rock. The interest of NY should be to draw outside revenue not "rob Peter to pay Paul" as will be the case with the slots in a box proposal by Del North, it will be a locals only establishment with no outside revenues. Again nice decision Governor, you certainly aren't helping the long term viability of the State.

Anonymous said...

The question I have is why? There has been so much discussion about improving the handle of horse racing in NY. Saratoga of which has a Slot VLT operation had a decreased handle again this year? Who runs the VLT operation at Saratoga? NYRA who has had gross mismanagement of all three tracks supported the selection of Delaware North, would this not hinder the credibility of the Governors selection? This is about the future of racing in NY and with this selection it is business is as usual the ole slot in box with out the "pizzaz."

Anonymous said...

You know what amazes me about all of the comments by the competing bidders that appear to be the apparent loser in this process.
They continue to profess that their long term revenues would far outpace the projections of Delaware North. Some of you may remember that the State hired a consultant to evaluate the revenue projections by all three bidders.

This was done to take a realistic look at the numbers as any one of the bidders could have inflated their projections to win this bid through "smoke and mirrors". Obviously, the consultant did not find merit in Capital Play's or SL Green's figures. Delaware North's proposal is clearly the right approach, even more so under these tough economic conditions.

I think I have this right:

1. Get the gaming facility built as quickly as possible and generating much needed tax revenues
2. Evaluate the amenities that will drive additional gaming revenues and not jeapordize the success of the operation (let's not forget that between the State taking 60% of all gaming revenues to education and the horsemen/breeders get another 8-10%, theres not much left to develop viable projects)
3. Then build what makes sense, which certainly sounds like the community will need to be involved

Sounds like a lot of people are being blinded by the "pizazz" of the other bids. They were never centered in reality.

Anonymous said...

Alan, by now you should realize that it takes Republicans to see the big picture of things economic and entreprenurial, so give the devil his due! It's true in Albany, and even more so in Washington.

Democrats have historically been more "gambling-friendly" than Republicans but that is changing, had to change, because of the easy revenue flowing from it, and the reality of being overtaxed on everything else that lives, breathes, moves, etc. Times change.

But Republicans insist on the business-like approach: If we're going to have gambling, it better be run like serious commerce with long-term growth potential and not as a mere piggy bank for political hacks like Sheldon Silver and Co. /S/Green Mtn Punter

Anonymous said...

slots in a box at Aqueduct will do nothing more than prey on those that can't afford to lose their money. sure you can get revenue quick, but its a tax on the poor if machines are stuffed in that old building and there's not enough pizazz to attract more affluent clients so just the desperate working class folk will be throwing their mortgage and rent money into a no win situation. other entertainment, lodging, and something "nice", kind of "NY fancy" is the answer.

Anonymous said...

Absolutely agree, shows the flawed business model by Del North, do you ever hear someone say "let's go to NY and gamble at Finger Lakes? No they are sub par gaming models that can't compete with the Borgata's, Mohegan Sun, MGM and other destination resorts. The locals will walk to Aqueduct recirculating the same money rather then bringing new revenues to the State. Good luck on your quick build and then analyze the market, lip stick on a pig is still a pig.

Anonymous said...

I could not disagree more. Clearly Mohegan Sun is interested in protecting their flank and getting more entrenched in one of the most valuable gaming markets in the country in NYC. The locals, people of all economic levels, will visit Aqueduct and will be categorized into varying levels of player types. The high level players will quickly be offered comps to visit Mohegan Sun in CT where the revenue split to the operator is much more favorable. How does this help NY State? Look, giving this to an out of state tribe with competing interests makes no sense at all.

Once you get past all of the smoke and mirrors of a grand development project that is being proposed by SLG or Capital Play, ask yourself this. If you view this project as a tax on the poor, will any of the bidders turn away this revenue source when they walk up to the casino doors. Absolutely not. Another question, can any of the bidders proposals attract the upscale gamer that one of the earlier posters indicated that Mohegan could do? Not without table games (fact).

The studies on gamblers indicate that they are among the most fiscally responsible people in the country. They pay their bills on time, have savings and investments, and put their kids through college. The so called "tax on the poor" (if you believe this school of thought) that a lesser development proposal would bring to the community will happen regardless of the bidder selection. I tend to believe that people who gamble and live in the Queens area, are now going to Atlantic City and Connecticut. Why not keep those revenues (and profits) in State and have a viable business model to support it and the jobs that ultimately will depend upon it. Foxwoods just announced 700 employees will be laid off. I suspect that Mohegan sun is not far from doing the same especially since their recent "Casino of the Wind" expansion has done nothing to grow revenues. Both Foxwoods and Mohegan Sun are having these problems due over development of their flagship properties.

Whether the selection is Delaware North, SL Green or Capital Play, the racing industry or the State of NY can no longer afford the delays in making this decision. Let's get it done.

Anonymous said...

12:21 poster, are you Paul Francis?

Anonymous said...

Whoa back....I've read this thread with great interest and appreciation for what appear to be some pretty informed opinions, till I got to this line:
The studies on gamblers indicate that they are among the most fiscally responsible people in the country.
Are you kidding? First of all, if that's true, why does every gambling enterprise on the planet have to have a disclaimer present for liability, relative to "responsible gaming" and hotlines, etc., for troubled gamblers? By its very nature, gambling is risky behavior, like any other addiction or compulsion, isn't it? Whoever you are, can you please provide us with these "studies" to which you refer, or source information for your statement? I'm in the media biz by trade and I've never seen anything remotely suggesting gamblers are among the most fiscally disciplined people around. It would be a first, that's for sure.
BTW, re: the last post, I doubt if it's Paul Francis. I'll "wager" it's a NYRA person. Because I'm a hunch player, that's why. :)

Anonymous said...

Here's an idea, give Capital Play/Mohegan Sun the Belmont location and Del North gets Aqueduct and let's just see model for model if you are right. Being that this is the wagering world I take Capital Play and their model over the junk in a trunk approach of DN. I would guess that the Gov will be considering Belmont sooner then later when he sees the lackluster returns at Aqueduct.