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Tuesday, August 04, 2009

Three of Them Across The Track

Crain's New York reports that there are three leaders in the Aqueduct racino race.

Of the six bids, three have generated the most buzz thanks to their local connections and name recognition. Insiders say the leading contenders so far are bids by Manhattan’s largest landlord, SL Green; the Aqueduct Entertainment Group, which includes The Navegante Group and other New York area builders; and casino mogul Steven Wynn.
Can't say I'm surprised that Delaware North isn't on that list. Can't imagine that the state would take their $100 million offer after they couldn't raise the $370 million. Besides, reports indicate that they're back to the slots-in-a-box offer which they were pressured to improve upon the first time around. Seems like they're just going through the motions. And what exactly was Penn National thinking with their token offer of $5 million? Maybe they just wanted to be in it in case all of the rest of them self-destruct? (Hardly an impossible prospect given the years of mishaps.)

But it has to be a big disappointment to developer R. Donahue Peebles if it's true that his bid with MGM Mirage has not made the cut. His reported bid of $150 million is twice that of Wynn's (at least before Wynn tried to raise his bid), and he has that cool website with all the pretty people too. I'd be a little disappointed as well, at least from the standpoint of having good stuff and idiotic quotes to blog about. The Crain's New York article says that the group claimed to have "received positive feedback from local representatives." So I'm not sure what's happening there.

If you missed it, this post on Capital Confidential has the little that is known about the financial aspects of the bids. The three companies reported to be leading have all basically offered $100 million up front and guaranteed (AEG threw in an extra $1 million), if, that is, Steve Wynn is allowed to increase his bid from $75 million, which he offered to do when making his presentation to the state last week.

SL Green/Hard Rock (along now with a company owned and controlled by Robert L. Johnson, the owner of Black Entertainment Television) provided some details of their plans in this press release. CEO Mark Holliday feels that the Hard Rock brand name gives it an edge.
..Holliday estimated the Hard Rock brand name will bring out more customers to Aqueduct to generate $4 billion in additional revenues – with 70% of that going to the state and racing interests, such as purses -- over the next 30 years compared to a non-brand name casino. [Bloodhorse]
Wynn apparently has more grandiose plans.
Racinos are grandstands with slot machines that are awful. I'm talking about entertainment and a place that's fun -- not Yonkers." [Times Union]
Hear that, harness guys? As far as Aqueduct Entertainment Group goes, the only specific I've seen about their proposal is that they'll have "Corona Italian ice and hotdog vendors like a New York City neighborhood, but not a six-star facility like Wynn proposes." Some cheap eats in case you have a bad night. [UPDATE: More details on the AEG plan here.]

AEG is said to have impressed the Queens Chamber of Commerce by guaranteeing local and minority jobs
AEG’s partners on its plans include the Rev. Floyd Flake’s Empowerment Development Corp. and Queens developer Levine Builders. While Mr. Wynn did not outline specific plans to use local vendors, he said he would be open to working with the community. Mr. Wynn acknowledged that he has made little effort to play Albany politics.

Meanwhile, SL Green, along with Hard Rock International, has divulged its plans to Community Board 10, which expressed its approval, said Marc Holliday, SL Green’s chief executive. [Crain's]
So, it would seem that the race is on, and perhaps these contenders have truly separated themselves from the rest of the pack. Of course, we don't really know anything for sure; and on Monday, the Daily News editorialized that the process is shaping up as one of the worst closed-door deals of all time.
The secrecy is unacceptable. Opening New York City to legalized gambling would be a momentous step, one that must not be taken in the dark. The demand for openness is only heightened by the millions of dollars that will be at stake every year. [NY Daily News]
A spokesperson for Governor Paterson told Crain's: "“Releasing specific information on the bids will impair the integrity of the evaluation process and hamper the state's ability to reach a timely decision based on a bidder’s first and most sincere offer." I'd be most curious to know exactly how it would impair the integrity of the process, considering that there hasn't much integrity in this entire affair since the Ad Hoc Committee conducted their transparent selection process so, so long ago.

10 Comments:

Anonymous said...

Cant believe I am going to type this but I agree with Mr. Wynn.

This is NYC, not oshkosh, and with all of its inherant competition you need to build something to attract customers.

Slots in a box is not going to maximize the long term potential of this operation.

IF this is truly judged by its long term merits, the Wynn proposal looks best to me, but when was the last time anything in Albany was judged on its long term merits?

And if true that Wynn has not played the Albany game then his bid is odds on to sputter down the stretch.

Anonymous said...

I see Trump just made a deal in bankruptcy court to regain control of the (3) Trump casinos in Atlantic City. Does this mean he will still be trying to kill any Aqueduct deal from moving forward per his promise?

Anonymous said...

no mention on the blog of the best horse in training right now or her freakish 116 beyer this weekend, wtf !!!???

alan said...

>>no mention on the blog of the best horse in training right now or her freakish 116 beyer this weekend, wtf !!!???

Nope.

Anonymous said...

Steve Wynn not playing the Albany game, huh? Kim Sinatra, Wynn's Sr VP and General Counsel, has been spotted all over NY state in all the critical offices, from Albany to Queens. Ms. Sinatra, formerly an in house lobbyist for Park Place/Caesars was a party to a dinner with Assembly Speaker Sheldon Silver at the Paris Las Vegas in 2002 during the time that Caesars Entertainment was lobbying NY State for their plans to build a casino with the St. Regis Mohawk tribe in the Catskills. According to then counsel for Caesars, James Featherstonhaugh, Caesars Entertainment agreed to pay $25,000in fines while they admitted no wrongdoing.

Mr. Wynn and Ms. Sinatra know the state capitol game better than anyone involved here, so why wouldn't they be playing NY politics at the highest levels?

Anonymous said...

Alan,

Nice work laying out all the releases and articles. Contrary to Crain's, I bet all the horses are still running and think they can win in this race!

The Florida Seminole Indian Tribe and their "Hard Rock" brand would surely be recognizable, but an out of state Indian tribe when so many in state tribes are lobbying for gaming rights? Wynn, Mr. Las Vegas & Macau, wants to do something extraordinary as only he knows how, but Wynn running a slots parlor at a racetrack? Aqueduct Entertainment Group, yes I say who are they?, but maybe the team being promoted as invested locals with community support have adequate plans for the facility? Penn National surely is sitting on CASH, waiting to pounce on an opportunity someplace in America, as Vegas and Ohio are on the company's radar screen as well. MGM/Peebles, well MGM surely knows the deal based on NYRA selecting it in 2003 to run the place for them, but with the Pansy Ho investigation in New Jersey, perhaps a risk for the state to cozy up to close? Delaware North, still in the game, even though in default on the prior round after Governor David Paterson refuses to renegotiate perecentages and market protections.

As many cons as pros for all the teams. Hopefully this Governor assembled Lottery/DOB/and others selection panel has found a way to best compare the pluses and minuses and we get on to the winner's circle.

Anonymous said...

Where is the dope from NC who said the Joker didn't want a single payer system. Your boy Obama is doing a awful job Alan. Where are the jobs? His healthcare plan is a disaster waiting to happen. He hates this country.

Anonymous said...

I found a website for the little know Aqueduct Entertainment Group, www.aqueductentertainment.com. Lots of design layouts, descriptions and team member information. Much more than "slots in box" sort of like "Wynn-lite." It does seem community outreach and local participation is a strength.

Easy to research the other bidders. Like the other posters question, why so many secrets?

Anonymous said...

What ever happened to the NY Government imposed deadline of Agust 1st for a decision on Aqueduct?

Anonymous said...

Since Community Board 10 has not had a meeting since early June it is hard to believe that Board expressed its approval as Marc Holliday said.