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Thursday, March 12, 2009

Now What?

All three of the original bidders for the Aqueduct racino expressed interest in the project in the wake of the collapse of the Delaware North deal. But chances are that they will be more restrained in their enthu$iasm at this point in time. Delware North tersely warned that the state had made a mistake.

"A prolonged re-bid of the project would ultimately cost the state even more in terms of added delays in construction and a missed opportunity to capitalize on a phased opening as contemplated by law without the assurance of a larger payment than Delaware North has offered." [Bloodhorse]
In a press release, SL Green, one of the losing bidders, said:
"We were fully capitalized and, if we had been given the go-ahead when originally scheduled, the VLT facility would already be up and running today and delivering revenue to the state."
That would mean that the racino would have been completed within five months; a highly dubious assertion which casts doubt on the veracity of the statement, including the 'we were fully capitalized' claim. Doesn't mean they would be now even if they were. Though the company said that their original proposal was "superior to the others," they plainly declined to commit to the same.
“We are still interested in developing the Aqueduct project and we look forward to seeing what the state has in mind if the project is to be re-bid." [Bloodhorse]
Mohegan Sun also expressed vague interest.
"We are confident that a Mohegan Sun managed facility will create much needed jobs and revenue for the Queens community, and we can develop Aqueduct as a world-class entertainment destination, generating millions of tax dollars for the State of New York." [DRF]
Karl O'Farrell of Mohegan Sun's partner Capital Play apparently didn't get the memo and was far more specific, saying that his group can meet its bid terms ­— $100 million up front and $400 million to build the facility. [Albany Times-Union]

Charles Hayward told David Grening of the Form that NYRA has $26 million of the $30 million it was given by the state as part of the new franchise agreement that went into effect last fall, and that "I think we'll be fine through the third quarter of next year."

Governor Paterson said that he wanted to make the decision last July, but political squabbles delayed that. But taking a look at my archives for that month, as late as July 21, Paterson said: "We now started to discuss a process by which we pick a winner." On July 24, a Paterson spokesman said "I wouldn't put a timetable on it." So this seems to me like another case of the governor not being forthcoming on this particular issue. At least Paterson didn't back down against the renegotiating demands of Delaware North, though fear of legal action by the losing bidders likely provided motivation for that.

I'm not even going to begin to try and guess what's going to happen now. Paterson and Senate Majority Leader Malcolm Smith promised a quick process, but how seriously are we possibly expected to take that?


Anonymous said...

Watchful Horseman

Likewise, wait & see, what exhals from the latest, 'new room of 3 or 2'.

Senate Majority Leader Malcolm Smith, does initially sound, as though he's after a quick fix,
but the system, may also, wear him down.

However, NYRA's survival, is now a major worry, as it will have a messy follow-on, to NY racing and any amiable, final solution, if they firstly, incur further, financial hassles, of any type.

Anonymous said...

Watchful Horseman.

But since having said that, in the last few minutes, I see NYRA head, has come out, with the following -
Jerry Bossert

..."While we need to constantly adjust to a changing economic situation, we feel we have the resources necessary to take us into the fall of 2010," said Charles Hayward, the President and Chief Executive Officer of the NYRA....

"it's the resources necessary", bit that worries me -
main weapon they've previously & perhaps righfully possessed, is aggressive litigation, against NY State.

Be construcive to many, if we knew more about those previous, pivotal agreements, between NY State & NYRA ?

Yes, this expensive game, goes on & on & on.

Sunny Jim said...

When all the dust settles, 4,500 sparkling new machines will be installed in the large spaces at Aqueduct Racetrack currently not in use by the 800 racing fans who show up each day. From the country's most concentrated urban population, hordes of new visitors will emerge - not seen since the days of P.T. Burnum's circus and dwarfing the racing fans in number - with bagloads of cash which will then be emptied into those machines.

Some will receive payout prizes, but most will go home with empty pockets (or bags). On average, at the end of day each machine will generate $275 in cash after said prizes are given out.

This will take place for 364 days a year, assuming the facility will be closed on Christmas Day (although you never know). Which comes to about $100,000 per machine per year, for an annual grand total of $450,000,000 in perpetuity, barring acts of God, massive theft or terrorist attack.

All in all, a pretty good haul.

SaratogaSpa said...

You said: ..."Paterson and Senate Majority Leader Malcolm Smith promised a quick process, but how seriously are we possibly expected to take that?"

....not seriously at all.

Anonymous said...

so, let the games begin AGAIN! What a joke. If Albany truly wants to see a racino at Aqueduct anytime soon, bring S.L. Green & Capital Play into a meeting, find out what they can do immediately, and get this thing built. Does that make too much sense in this NY state of confusion?

I wonder who the spokespersons were for Mohegan & S.L. Green, as it doesn't seem they were identified? Nice to hear from Capital Play's O'Farrell. I wondered where he went.

Anonymous said...

Sunny Jim
Just like Gulfstream.

Steve Zorn said...

d the best idea to begin with, but, really, could you expect the barons of Albany to give the contract to a combination of Injuns and furriners?

How much of a no-brainer could this be? $1 million a day for the state once the machine are up and running. Maybe there'd even be enough in there to subsidize the LIRR train to Belmont?

Meanwhile, most trainers are broke, backstretch workers are getting paid less as a result of the ill-informed State Labor Department investigation, and NY breeders are going out of business. Thanks, Albany.

Sunny Jim said...

RG - You may be exactly right - it may turn out like Gulfstream - no one knows for sure.

Then again, Philadelphia Park's average per machine has been $386, although it began in a much better economic climate a couple of years ago. This would exceeed by far the predicted $275 average for Aqueduct. (Gulfstream's average was about half that of Philly's.) Will Aqueduct come closer to Philly's model or Florida's?

Anonymous said...

That traffic jam on route 80 is 20%of the remaining NY resident in foal mares heading to PA.

Without the VLT agreement, does NYRA go directly back into bankruptcy court?

Any chance to get that valuable land back before they sell Big A to Port Authority?