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Monday, April 20, 2009

No Racing Overdose for Times

You might have noticed a photo of a thoroughbred race horse on page 1 of today's New York Times. Unfortunately, and as you might expect, it does not accompany a story which marks the run-up to the Kentucky Derby a week from this coming Saturday. Instead, it's a piece on a horse named Overdose, currently the rage in Hungary with a perfect 12-for-12 record. So, for horses, I guess you have to be either a hero in a depressed nation starving for one of any kind, or drop dead after the finish line of the Derby to get on the front page of the Paper of Record these days.

But the Overdose story illustrates one of my ongoing themes - that the love of horse racing is an inherent quality of us silly humans, no matter what the geography or politics may be. I do believe the time will come when a horse once again captures the imagination of the public at large in this country, and provides a major boost to the sport at large. It will be a certain animal with a certain story at a certain time. Don't know when that will be.....except that it apparently won't be around the classics this spring.

I also see that the Times is starting up its The Rail blog again....just around 12 days before the Derby, and certain to come to an end shortly after the Belmont as it did last year. The Times is even chintzy with its cyberspace when it comes to racing. Hockey, a sport which the paper has largely shunned in print since the lockout, has the year-round Slap Shot blog (excellent, by the way). But they can only spare less than two months for racing? For a blog to which I and many others donated their time and effort for absolutely no compensation last year?

- Excellent catch by this reader...as I've often said, this site is only as good as the feedback it generates from you guys. In this article from Black Enterprise dated March 19, R. Donohue Peebles, the CEO of Peebles Development Corp, which was to be Delaware North's construction partner on its scuttled Big A racino deal, discloses some information about the original $370 million down payment that I'd never read before.

"Delaware North was going to operate a casino there for slots and they were going to pay the state a licensing fee of $370 million. They were going to pay that licensing fee in four quarterly payments. And so in essence, it was an installment plan from day one and that was going to be about $92 million every quarter."
Peebles adds that Delaware North planned to borrow $270 million of that fee; but when the credit markets froze, it offered the state the $100 million up front, and to pay the balance off within three years.

So, a couple of points....As the reader pointed out, the quarterly payment plan which Peebles mentions is new to me, and seems contrary to the terms of the MOU, and to the notion that the money was going to be part of the fiscal year that ended on April 1. So, his/her suspicion of 'favoritism' towards Del North is certainly understandable. And secondly, at this point, how much better of a deal does the state think it's going to get than the $100 million up front and another $270 within three years that Del North offered, at least according to Peebles?

15 Comments:

Handride said...

I came over here for some great insight and the longshot that will win the derby, I didn't realize I showed up at talkingpointsmemo2
;-D

Ok hotshot, who's gonna bust up the derby Trifecta this year?

Anonymous said...

It sure looks like the process has been created to hand the vlt contract to Delaware North.

Paragraph 3.4 in the MOU posted on the Governor's web site provides that the selected Vendor and its member companies and affiliates shall not advertise, market or promote any competitive gaming venue in the New York City metropolitan area.

Let's see ... that eliminates all entities with Atlantic City interests and the two Connecticut tribes.

Hmmm.

Who's left?

Oh yeah, Delaware North.

Anonymous said...

I read paragraph 3.4 of the MOU. Does this mean because the Mohegan Sun advertises it's CT casino in NYC that it is disqualified from bidding on Aqueduct? How about the fact that it has a sports bar bearing its name at the new Yankee Stadium?

A MOU written to the benefit for the previous defaulting bidder, do Albany insiders really think they could pull this off?

Anonymous said...

The whole process involving the state procurement of a vendor/operator has been a sham. The evidence that your reader and you presented today about a "favorite" deal with this Donahue Peebles, outside the language of the original MOU relied upon by the other bidders, is incriminating. I want my elected officials to just start telling me ahead of time that they are not going to be honest, and that their intent is to enrich someone at the expense of those they screw!

Anonymous said...

Hey Handride,

Go home if it's not to your liking. Racing, NY politics, Alan lectures, all are a part of the game here. Best blog in town.

alan said...

Paragraph 3.4 says:


Vendor and its member companies and affiliates shall not operate, advise, invest in, or otherwise facilitate gaming operations within a fifty (50) mile radius of Aqueduct without the written consent of State;According to Google Maps, it's 107 miles from Aqueduct to Mohegan Sun, and 137 miles to Atlantic City. So I don't believe they would be prohibited from operating the racino. They would however be prohibited from running any marketing programs at Aqueduct for other locations - anywhere, "whether through transportation arrangements, discount programs, or other services or attractions." And they couldn't run ads in the NYC area for the other facilities.

Anonymous said...

Alan -

Not being permitted to "advertise, market or promote any competitive gaming venue in the New York City metropolitan area" means no mailings, no television, no radio.

It has the effect of eliminating all entities with Atlantic City interests and the two Connecticut tribes. While they're outside the protective zone, no adverstising in New York means no bid,

I understand the intent to be protectionist with the New York Lottery product, but it's at the expense of the largest companies with the ability to integrate their marketing programs with Aqueduct.

It's short sighted and has the effect of limiting the bidding market to Delaware North. Not a great idea. A pool of 'one' is plain bad business.

Anonymous said...

Exactly Alan, so the Mohegan Sun for instance, would have to pull all it's advertising for its CT location from within NYC limits. I'm sure they could do it and just make the Mohegan Sun Sports Bar at Yankeee Stadium point the customers towards Aqueduct.

Anonymous said...

Here's where I think the state, and whatever representatives from DelNorth helped write the current MOU, shot themselves in the foot on this issue. Presuming in fact it is meant to eliminate most others and favor DelNorth, Finger Lakes promotion in the NYC market must be eliminated and no cross marketing of that facility can be accomplished. Getting customers from NYC to tour the Lakes region and stop by Finger Lakes only makes good sense, as does making Finger Lakes a part of the NY racing circuit. Be damned if you live in NYC and make a trek to the Delaware North owned Finger Lakes Casino!

Anonymous said...

The more one read's the new Aqueduct MOU, the more you wonder who can pass muster this time.

In Schedule C, Definition of "Prohibited Persons" sction (ii) discusses associations with organized crime, felonies and crimes of moral terpitude. The notorious history of the Jacob's family owned Emprise Corp., the name used before it was changed to Delaware North, is easily questioned. The determination as to whether a Person or entity has any association with organized crime "shall be within the reasonable discretion of the State." I would have thought investigating something this serious would be an "either you're pregnant or you're not" type analysis?

How about section (v) any Person (or entity) that is in default in the payment to the City of any real estate taxes, sewer rents or water charges totalling more than Ten Thousand Dolars ($10,000.00), unless such default is being contested in good faith in accordance with the law. I can't even imagine that there exists a big time NYC real estae developer or property owner that isn't in some sort of default under this section.

The same logic follows for section (i) refering to persons or entities that must "not be in default or in breech, beyond any applicable grace period, of its obligations under any material written agreement with the City, the State, or ESDC, unless such breech has been waived."

Maybe those of us concerned about the outcome should just submit our own bid? Wouldn't that be a howl after all this time, the annoucement of LTG as winning bidder!

alan said...

>>How about section (v) any Person (or entity) that is in default in the payment to the City of any real estate taxes, sewer rents or water charges totalling more than Ten Thousand Dolars ($10,000.00), unless such default is being contested in good faith in accordance with the law.

Probably a good thing NYRA doesn't have to apply!

Anonymous said...

Well, I guess I will submit my bid since I certainly qualify under all those terms.

Anon Enterprises, Inc. will provide $100,000 up front, with Monthly payments of $100,000 until I reach $100Million.

That should do it.

Anonymous said...

Anon 10:48, the extended payment plan, that sounds like the way the State defined and DelNorth interpreted 'UP-FRONT" the last go round!

Put me in!

Anonymous said...

Watchful Horseman

u had all better firstly, settle down & read this mind boggling article, just in ;
GL Green - Delaware North lawsuit

www.observer.com/2009/real-estate/sl-green-lawsuit-alleges-rival-sabotaged-bid-queens-aqueduct

Anonymous said...

W.Horseman, yes it reads like DNC pulled the rug out from under its original partners. That's what BIG enetrprises with no moral standing usually do.