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Wednesday, January 14, 2009

Wishful Thinking

A reader mentioned last week that Delaware North was to make a presentation before Community Board 10 in Ozone Park regarding their plans for the mythical Aqueduct racino. On Wednesday, the local Queens Courier reported on the meeting (h/t Albany Law School Racing and Gaming Today), at which representatives from the company said that they could possibly have the South Ozone Park entertainment destination opening its doors in mid-2010.

(If this place is open by mid-2010, say, July 1, I'll skip Belmont that day and instead go play slots for two one hours in an Islanders t-shirt [supplied by reader jk].)

The hybrid racetrack-casino - or racino - will feature a 185,000-square-foot-gaming floor, complete with 4,500 video lottery terminals.

Sultemeier also cited 7,600 parking spaces, including a 2,000-space parking garage, world-class restaurants and food amenities, including a 600-seat buffet, an Italian restaurant and a noodle bar, all ready for opening day.
.....
The first phase of the project is expected to cost $250 million at the start of construction. Another $170 million dollars will be dedicated to maintaining the facility through Delaware North’s 30-year contract with the state.

Delaware North representatives also have plans to construct a 300-room resort hotel and spa, a retail mall, a 3,000-seat events center, and a 60,000-square-foot conference facility in the latter phases of the project. [Queens Courier]
The $250 million construction cost is to be raised via a bond issue; not a really great time for that, of course. And while the article also refers to the "$370 million racetrack project," we know that's just for the rights to build the place. Let's just say that they better already have the cash or financing in place.

19 Comments:

jk said...

I will have to check, but I think I have an old "fishsticks" jersey in the back of the closet.

Sadly, Garth Snow had led us beyond fishsticks and we are now approaching tater tots!

On a more serious note, the NY pols are up in arms about additional Yankee Stadium financing so I do not see how the racino bird will fly.

SaratogaSpa said...

If I am not mistaken, were they not saying as late as this fall that construction would begin in February '09? If a shovel hits dirt before Feb. '10 I would be shocked.

Anonymous said...

Watchful Horseman.

Does anyone really believe, the U.S. House/Gov't's, potential additional bailout funds to assist Bank of America's massive losses, (worldwide news today www.reuters.com/article/newsOne/idUSTRE50D7DY20090115 )
will allow it, to give it's inherited client, DelNorth, a speculative loan, for the Aqueduct ?

Today the U.S. House is expected to vote on a bill, that would impose stricter terms and conditions on BOA etc, who are lobbying for these potentially, additional funds.

BOA's buyout of DelNorth's original financier, Merrill Lynch, now seems likely, to fall through, as there are still, even more bad debts, seeping through ML's cracked facade.

Obviously if DelNorth doesn't shortly fly, then NYRA crash lands..& major heads will roll…what a Royal Cock-up, in our politically manipulated, Sport of Kings.
A complete politically orchestrated stuff-up, from beginning, a long long time
ago, to soon, the end, being not that long away.

I understand NYRA did ? sign over the racecourse deeds, subject to
NY state, playing ball, but this heavy mist, descending slowly over the back-straight, seems likely to encumber all before it..

Perhaps the horsemen will then be asked to conditionally inherit the mess, as we are now too weak, to refuse./

Anonymous said...

My mares are shipping to PA this week.

The 2010 foal crop in NY may be down 66% from three years ago.

The rats are fleeing the sinking ship. In this market, if you dare to breed a mare, you have to go where the money is right now, not where it might be.

It is as likely that the Big A will be razed for a shopping mall as it is that there will be a VLT parlor there by 2010.

As for "the latter phases", if you believe that a 300 room hotel and spa and a 60,000 sq ft conferance hall will ever be built on Rockaway Boulevard I have a bridge for sale, or even worse a broodmare.

Anonymous said...

The article suggests that Delaware North has "finalized" a contract with the New York State legislature, surely they must have meant "final without financing." I wonder how Delaware North is doing otherwise, hard to tell I suppose being it is a private company, but not many businesses aren't suffering revenue shortfalls in the current climate. DelNorth has other racetrack and gaming with the State, hotels, concessions, even leases on the rest stops on the NY Thruway, so maybe things are happening there that the public can't see?

Anonymous said...

I ask again, IF the VLT deal collapses, is the NYRA Franchise void?

I believe there are provisions that would void the franchise if certain goals are not met, and clearly NYRA goes under without the VLT's.

Empire is not happening, so who will be the White Knight?

Does Capital Play still exist?

El Angelo said...

If the New York foal crop may be down 66%, isn't that an incentive to keep the mares in New York? I understanding that PA is minting money at the tracks with their slots, but if the undercapitalized or faint of heart have already given up on New York breeding, and with a fair amount still here in breeding incentives/purses, shouldn't the lesser competition make New York a steal right now?

Anonymous said...

Watchful Horseman

To hell with your mares, you won't have an income for a long messy time, if we can't re-drive constructive facts, within the political under belly of state & Aqueduct.
Any opposition pollies out there without subservient agendas ???

Anonymous said...

I'm not sure the racing franchise will be void if the VLT's aren't installed, just in jeopardy. What will happen is as suggested, the NYRA goes broke and the facilities continue to deteriorate. Then, the Franchise Oversight Board can deem them in default, give them a chance to correct the problem, and if the NYRA can't do so, recommend the Franchise be revoked. The case is then turned over to the New York State Racing & Wagering Board, and if it concurs, it issues the verdict which if appealed, must be reviewed by the State's Supreme court. One sticking point is that during this "going broke" and review process, NY State must fund the employee pensions and operating budget shortfalls for the NYRA, while the quality of racing, purses, infrastructure and general well being of the horse industry in NY suffers. I hope this is not what the State wanted from the beginning?

Anonymous said...

Watchful Horseman

Anyone watchimg BOA at moment,
down over 20% after open.
Seems major hassles on their
& (ML)requested funding.

Anonymous said...

Who will be the White Knight to save the NYRA asks 9:37 anon? I haven't heard a peep from Empire Racing, so maybe they just exist in name only? Capital Play and O'Farrell haven't said much about racing lately either. NYRA and Keenland are rumored to be looking at TVG together so perhaps the NYRA could assign its Franchise rights to the Keenland guys if approved by the State? After all NY Graded racing is meant to support the Kentucky breeders.

Anonymous said...

Watchful Horseman

To Alan -
the NY racing world certainly, is aware of your racing analysis & connected power -

good if can you assist our presently dire, inept infrastructure & handicapped income, by defining & suggesting, long term, ideas to us, via your/a, fast synthetic track, with trustworthy directions, for all I'm sure, of NY thoroughbred racing.

Perhaps your knowledgeable.
inside lane, is less crowded..

Anonymous said...

El Angelo, I have been debating the risk/reward of breeding in NY for a few months.

I am weighing the benefits of the smaller foal crop versus the uncertainty of racing/vlt's in NY.

IF the economy at least stablilizes, and VLT's are approved, breeding in NY is a potential home run. Demand up, supply down.

But since I have little confidence in either of those things occuring in the next 30 months or so from mating to the sales, I need to consider the breed to race option.

42 months down the road I am fairly certain purses will remain strong in PA, while NYRA may be defunct and the Big A closed for all I know. True, there will be more competition which needs to be weighed also.

I have always been suspicious of the pollies' motives with the land grab, and it may be the easiest way for them to balance the budget will be to sell off these assets.

The race track property, specifically the Big A with its proximity to the airport, has plenty of value, probably being the biggest parcel of developmental land in NYC and I could easily see it going the way of Roosevelt Raceway.

Not predicting it will happen, but it is a possibility that scares the living crap out of me as a breeder that tries to breed decent horses.

Bottom line it is a difficult decision, I am a native NYer and want to race here. I may hedge and split the mares up.

Anonymous said...

Another factor, not to be underestimated, is cost.

The PA farms are more competitively priced, both in day rate and stallion fees.

I see KY stallion managers actively marketing their stallions with all kinds of creative deals trying to lure mares.

Not seeing the same efforts from the NY farms, whose prices, at least the advertised prices, are pretty much the same as last year.

Anonymous said...

what was the deadline given to the NYRA in that late December meeting, by Laura Anglin and the franchise oversight board, as it relates to approval of certain items contained the 2009 NYRA operating budget? Didn't they want to look at salaries, benefits and the $10 million or so in capital expenses that the NYRA was proposing? I wonder if it will be made public or kept secret? Man it's hard to feel confident about the succesful future of NY racing with all this uncertainty with both the racing and the gaming operators.

Anonymous said...

Watchful Horseman.

In answer to your question, a blogger posted this last week
Yes there's a lot we don't know about, regarding this shaky & hazy Aqueduct, make-over.


ANONYMOUS

There is money in the market for solid deals and companies with strong balance sheets.
My guess is $370 million was just the wrong number and it doesn't compute well in a financing model.

Good question about how a failed Aqueduct deal might effect the racing franchise award.

The deeds to the racetracks have been transfered to the state, the creditors have been paid with the
money the NYRA got from the state in bankruptcy, the pension accounts are current, oustanding debts to the state have been waived, and the extra $30 million that the NYRA bargained for from the state has either been spent, or is on account with the NYRA.

Per the franchise agreement, the state must begin picking up pension payments April 1st, and
the state may even have to fund operating budget and capital needs until VLT revenue comes in,
unless the NYRA has been negligent.

Hard to believe all of the above could be unraveled if a VLT deal isn't completed at Aqueduct,
but this has been an unusual process.

alan said...

>>what was the deadline given to the NYRA in that late December meeting, by Laura Anglin and the franchise oversight board, as it relates to approval of certain items contained the 2009 NYRA operating budget?

I don't recall any specific deadline. But Ms. Anglin was quite clear that the budget would not be approved until she was provided with more information on personnel costs.

Anonymous said...

WH, barring the State finding NYRA to be "negligent" (and the delay is certainly not their fault), it sounds like racing will continue uninterrupted with NYS picking up any deficit.

I suppose this is why the State is questioning expenses, a good thing.

Thanks for the discussion, you have eased some of my concerns.

Anonymous said...

Alan,
I just want to say "thank you" for your continued blogging on a subject that is critical for anyone depending on the future of NY Racing. There is no official information given out by the parties involved, but the speculation and rumors are flying. Heard while at Aqueduct that the first floor/second floor was an issue (from a security guard!) and your info backs that up. This is why we keep checking in here to get at glimpse of the true story. Keep up the good work.