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Monday, October 06, 2008

New Monticello Still On Track

- One major project that's proceeding despite the ongoing credit crisis is developer Louis Cappelli's $1.1 billion Entertainment City on the former Concord grounds; a project which includes a new Monticello Raceway and its accompanying racino. However, and as one might expect, Cappelli has endured some twists and turns in order to keep his baby on track. For one thing, the Bank of Scotland, one of his main backers, is being taken over; that necessitated a restructuring of the financing

"Incredibly, with the markets as volatile as I have personally experienced in my 35 years of developing, the game plan remains intact and on schedule," Cappelli said in an e-mail on Thursday.

"While Bank of Scotland has temporarily reduced their construction lending, I have every confidence that at the end of the day, they will participate with ULLICO and CIBC prior to mid-November." [Record Online]
$400 million is to be raised via a bond issue on or around November 10. Similarly, as mentioned the other day, the state is scheduled to raise $250 million via bond issue for the construction of the Aqueduct racino. Which led one reader to ask: "Do you think the $250M state bond is feasible in this market?....Might be another monkey wrench."

Funny he/she should mention that, because Business Week reported late last week that the municipal bond market is nearly frozen.
Those that are getting done—like New York City's Sept. 29 deal—are high-priced.
So any bond deal that might get done at this point will likely cost the state a bit more than the $6 million in debt service provided for in the budget.

10 Comments:

Anonymous said...

As a betting man, I wouldn't want to make a wager on the Monticello bond deal getting done. A variable rate maybe, but lots of associated interest rate and liquity risks. Who owns the underlying real estate at the Monticello project?

alan said...

>>Who owns the underlying real estate at the Monticello project?

Cappelli bought the Concord for $10 million in 1999.

SaratogaSpa said...

This will be very interesting to watch as it develops. Cappelli can move mountains when no one else can, but even he can't push the market his way right now.

jk said...

http://tinyurl.com/4tv84d

"We got $30 million to bridge us from the start of the new franchise to when VLTs start operating," NYRA President and CEO Charles Hayward said. "At one point, late 2009 looked realistic. Now I'd say 15 to 18 months. That's just what I've been told by the bidders."

Glimmerglass said...

Even if it gets built does anyone think they truly will be able to wring out of the region enough money to keep it afloat?

Sure there will be the a-typical bump of a new place and with it jubilation for a couple of months. Ultimately though it will be just like Turning Stone and Foxwoods fighting for the same dollar.

This is one project you can see like a locomotive coming down the tracks it is doomed to financial failure.

Anonymous said...

The state of NY may have a leg up on Cappelli in terms of financing the Aqueduct VLT construction. With that said, I wonder if the state can afford or even has the appetite for any additional risk right now?

Anonymous said...

Well, after seeing Zarkava, I am thinking the better horses will be running on Friday this upcoming Breeders Cup Weekend.

DC said...

Zarkava isn't coming. She was never coming. Horses owned by the Aga Khan don't come over for the Breeders Cup, for whatever reason.

Anonymous said...

He said he'll ship her over next year if Obama wins.

Anonymous said...

My bad, not totally paying attention, did not realized who the owner was.

Even without, Friday's races may still be more compelling than Saturday especially if Curlin opts out.