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Friday, January 15, 2010

Change of Tone

Almost two weeks after Governor Paterson said that he would take the initiative and pick an operator for the Big A racino himself in a week or so if a consensus amongst the three deciders, his spokesperson Morgan Hook told the Queens Chronicle:

“We have no announcement for today and have not offered a specific time for when an announcement will be made.....The governor cannot ‘declare a winning bidder.’ The winning bidder must be a consensus decision, selected by the governor, speaker and leader of the Senate.” [Queens Chronicle]
Well, that's a completely different tone, isn't it? I might speculate that perhaps he was advised that the talks were going particularly poorly, but that would be presuming that there were talks. One gets the feeling that the governor may presently be more concerned about his own cash issues.

However, while any outrage over the situation should be aimed directly at the state capitol, politicians there continue to use NYRA as their favorite whipping boy, a facile target with which to score points. Now, two state Senators are piling on and demanding financial records for their own little dog and pony show, in the form of a hearing in Elmont on Feb 3.
The letter to NYRA President Charles Hayward notes the senators’ surprise that NYRA needs money, given that it received $105 million from the state two years ago. [Capitol Confidential]
I wonder if the Senators are simply ignorant of the fact that, of that sum, $75 million was to pay creditors and just $30 million was for operating expenses to get NYRA through to slots time, or if they're merely and conveniently ignoring that fact. Look, I have no desire to become an apologist for NYRA, and it's up to them to demonstrate to their various inquisitors that they're barking up the wrong tree. And, being that these two members of the world's most dysfunctional legislative body want to probe "the ways in which the performance of our racing industry compares to the performance of similar enterprises in other states," maybe they'll learn a thing or two about the way that OTB has ravaged the industry here as in no other jurisdiction. However, this all reeks of political grandstanding and waste of taxpayers' money to me.

- A reader points out that Paterson's political advisor Bill Lynch, who, as we noted, is also a paid lobbyist for SL Green, was recently fined $10,000 for failing to disclose that his client Columbia University had increased its compensation by almost $400,000 (from $180,000 to $570,000) in 2007. And that's not all.
While in negotiations with the PIC over this infraction, Lynch.....revealed other discrepancies of which the commission had not previously been aware.

This, in turn, led the PIC to mandate that Lynch hire an outside monitor. [Daily Politics]
I wonder if the monitor is monitoring the obvious conflict between Lynch's role in the Paterson administration and his employment by SL Green.

- Here's NYC OTB's response to NYRA's objection to its bankruptcy (pdf file, via the Paulick Report). There will be a hearing on the matter on Jan 20. I have no further comment at this time; let the bankrupt organization's high-priced PR firm speak for themselves.


Anonymous said...

Surprise! Surprise!

Once again The Governor promised a date for his choice for the VLT operator and once again we are let down.

Anonymous said...

Alan thanks for pointing out the Liz Benjamin article in the Daily news about Bill Lynch being monitored by a fellow lobbyist as ordered by the Commission on Public Integrity. I suggest everyone read this article.

Amazingly Lynch forgot to report an additional $400,000 he received from Colombia University, so his sentence is to be monitored by a fellow lobbyist who also represents Colombia University. Seems like a very cozy arrangement to me and is basically BS.

Lets see if this monitor is doing his job because the incestous triangle that is:

Governor Paterson-Bill Lynch-SL Green

stinks and clearly does not pass the smell test.

Anonymous said...

Every time I suggest that NYRA is heading for bankruptcy because of excessive purse amounts, I am informed by commentators that the state dictates the purse distribution, that a specified percentage of takeout/signal fees must go to purses. Fine, but since takeout/signal fees have been in a horrendous decline for years, how is it that many purses are well into the six-figure range? Where is the money coming from, if not from the $105 million given to NYRA by the state. Hmm?

Anonymous said...

We now have
1. NY Comptrollers Office.
2. NY Senate
investigating NYRA, its financial records and even its e-mails.

So will we also see investigations launched by:
1. NY Assembly.
2. Oversight Board.
3. Racing & Wagering Board.
I am sure these organizations will not want to be left out.

Remember Getnick? Did he not receive a lucrative contract of some $125,000 per month for 5 years to monitor MYRA? What the hell is he doing for this money and how come he has allowed NYRA to get itself into this tangle with the State?

Can anyone shed a light on this? If nothing else it is worth discussing.

Anonymous said...

I have no specific information, but this piling onto NYRA by politicians could signal a more profound problem that may be bubbling under the surface and is about to break.

Another major scandal at NYRA!

What are the odds?

Anonymous said...

The state of NY tried to comply with the Franchise and State settlement agreements by selecting Delaware North, a NYRA favorite, to run the gaming back in October 2008, only one month after the NYRA bankruptcy case was closed. Delaware North chose to back out; perhaps it didn't want to pay as much as it bid, wanted to change the percentage splits, wanted to pay the bid amount over time instead of as promised, who knows but DelNorth created the potential problem that the NYRA faces without VLT's, not the state of NY.

Why the holdup since May 2009, when the new round of bids came in, that's another question. It may have something to do with the fact that in early 2009, shortly after Times Union journalist Jim Odato's FOIL request for the NYRA's 2009 proposed budget, the NYRA sued the State Budget office and Laura Anglin to prevent this information from being released publicly. This litigation and NYRA posturing may have refueled whatever hard feelings previously existed between the State and the NYRA, thereby letting politics and foot dragging get in the way. Just a guess based on this line of thinking.

Whatever, we are where we are now. As the NYRA complies with the various audits and investigations, maybe the three men make a decision to help stabilize an important industry to the state and worry less about the operator. If there is a problem when the investigation into the racing organization is complete, then you move them out and keep going. If not, mend your fences and we still move on.

Anonymous said...

Why do NYRA apologists attack when NYRA is asked to do the legal thing and have its financial records audited? This is the same organization (New NYRA is almost identical to Old NYRA), with the same management and controlling Board of Trustees, who stole money and were indicted in the past for fraudulent practices.

Past practices are a good indication of future behavior. Senators Adams and Johnson as well as Tom DiNapoli are right to assume NYRA cannot be trusted and continue to verify their claims by undertaking regular investigations and audits. I applaud you all for undertaking this task on behalf of all New Yorkers.

It is a pity these gentlemen were not around a few years ago to investigate why NYRA was granted a 25 year franchise extension when it was clearly guilty of massive corruption. No sensible person accepted that NYRA’s claim to the land would have survived in court if The Spitzer Administration had sought to have this adjudicated. A lot of people have wondered why Spitzer capitulated.

Hopefully one day the truth will emerge from the shadows.

Anonymous said...

Okay there is one guy who is going around posting comments on every website attacking the SL Green bid for the Aqueduct, even when Aqueduct is not mentioned in the blog post. It's quite obvious this person is working with one of the other bidders. Meanwhile Senate President Malcolm Smith has his own ties to one of the other bidders.

Anonymous said...

There are many parties, supporting SL Green, as part of our commercial tenancy agreements, but such monies have been escrowed in 'future REIT commercial contracts'.

We have been legally informed, if they win Aqueduct, an immediate upward bond trend, of 30-66% will then occur.

They are good people.

Anonymous said...

Queens Chamber of Commerce have rolled into the debate on Aqueduct with a letter to the Editor of the Queens Tribune:

Do It, Already

To The Editor:

Doomsday Budget. Suspended payments to hospitals and school districts. A $3.2 billion budget gap. It certainly looks like our State government is struggling with the most difficult economic times in many years. The Queens Chamber of Commerce seeks to find solutions. If a decision had been reached on the winning bidder for the re-development of Aqueduct Racetrack, New York State government would not have sacrificed nearly $350 million in 2009 or leave another $200 million check on the table. The Queens Chamber of Commerce, representing over 1,500 businesses and organizations doing business in our borough urges Albany to reach a decision now. In fact, it is a demand that all New Yorkers should be making.

For almost a decade, discussions have been held regarding the installation of Video Lottery Terminals (VLT) at Aqueduct Racetrack. In that time, eight other racetracks across New York State have installed VLT’s adding thousands of jobs to local economies and millions of dollars into New York State coffers. In 2008, we thought progress was being made when a bidder was selected, but alas, that bidder defaulted and the selection process came to a grinding halt. Now, several groups have re-introduced proposals that could make Aqueduct not only a revenue generating, job creating venue, but a destination point in our borough. Located only a mile from JFK International Airport, plans include restaurants, meeting space, entertainment venues and retail shops that all would add employment opportunities to our borough’s workforce and procurement prospects for Queen’s businesses.

It is time to select a vendor to re-build an under-achieving, outdated racetrack. Let us learn from our mistakes and select a vendor with close ties to the Queen’s community. Select a vendor who has an established presence and a demonstrated record of success hiring Queen’s workers and sub-contractors. Both SL Green/Hardrock and the Aqueduct Entertainment Group meet those criteria. The other bidders have either retreated back to Vegas or have already been given the opportunity and couldn’t produce. Both SL Green and AEG have laid out proposals that go far beyond slots-in-a-box, and include the type of economic generating businesses this borough needs and a destination point this borough sorely lacks. So let’s start 2010 on the right track. Don’t gamble with our children’s futures or our senior’s health. The smart money says pick a vendor with a winning record. Start collecting the nearly $1 million a day that VLT’s will generate in new revenue. Collect the $200 million that will help towards balancing a budget that is waiting to be paid from the winning bidder. The results will be a win for Queens and for New York State.

Jack Friedman,
Executive VP
Queens Chamber of Commerce

Anonymous said...

Lots of theories kick around on this site, so here's an interesting one from a thoroughbred bloger known as Power Cap:

"With New York racino operations having a drastic effect on Indian Casino operations in Connecticut would it be hard to imagine that casino interests in Connecticut and New Jersey are the primary forces blocking the Aqueduct racino? The Aqueduct racino is well into it's ninth calender of delays. On it's own nine years of delays are noteworthy, but the manner of hearings, false NYRA scandals and multiple selection processes have rendered the situation a complete farce. It is too bad the local investigative journalists have dropped the ball on this topic. Who are the fixers blocking the Aqueduct construction? How much is being kicked back to whom to keep this project on hold? It seems that blocking the Aqueduct racino has been a cash cow for the local politicians behind the scenes; a golden goose that they have been very reluctant to surrender. Thus the farce continues as casino business nosedives elsewhere."

This concept has been around since Donald Trump said, back when the NYRA chose MGM and not him to run the gaming at Aqueduct, something like, "If I don't get the deal then perhaps nobody will." So far, he was right!

Anonymous said...

Definitely there should be a thorough investigation of the whole New York racing and gaming franchise. Just some of the questions that need to be answered:

Why it taken 9 years to have VLT's fully operational at Aqueduct;

Why did Spitzer approve a 25 year racing deal for a corrupt organization;

Why did Delaware North win the franchise in October 2008 and fail to deliver when the State had already verified its funding was in place?

These any many other questions need to be investigated and any corruption exposed.

Anonymous said...

Alan, thanks for your continuing efforts to set the record straight on the NYRA shortfall. Racing continues to be a convenient whipping boy for the Albany pols....nothing ever seems to change there. Nero fiddles while Rome burns....pick the vlt franchisee, already! /S/greenmtnpunter

Anonymous said...

NY PML Sec 502 job openings?
No more than two members of the Board of Directors of Nassau OTB may be from the same political party. The Nassau County Legislature (and County Executive) now has a Republican Majority.

Will the new majority appoint new directors?
Will they ponder the revolutionary step of selecting one Director from the rank and file of the company?

Directors? What do they do?
Do they discharge a fiduciary duty?
Who are they?
The stuff of which fairy tales and law school examinations are made?

Ask Sandy Frucher?

Anonymous said...

A $23 million dollar Muni Bond case study and argument for why Sandy Frucher et al should not be allowed to bet $240 million Muni Style.

The Nassau County OTB Race Palace (and other stuff) was financed with a public bond offering. By sinking so much money into one location that does not produce much relative to its overhead the OTB bet the ranch on a hole that eats away at the whole. How many pieces of property could you buy in Nassau County with $6,000,000 to use as a branch? Many. The customer drives the business in part and not the Sandy Frucher?
The Nassau Bonds and issuing documents provide reasons to think that Frucher is not Stanley Ho in either people skills or business sense?

Anonymous said...

with all of these errand boys running around not one is available to see to it in Court that ALL of NY OTBs are open on Palm Sunday and Easter Sunday so that we can bet and the State et al can make money. And these guys pretend to have an interest in making money? You have to be kidding?