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Tuesday, January 26, 2010

Out Of Words

I really don't know what to say anymore about Aqueduct. I'm out of adjectives. At one time or another, I'm sure I've used words like stupid, ridiculous, ludicrous, absurd, idiotic, nonsensical, bizarre.... What else is there to say that's within the bounds of decency? Here we are, approaching the end of January, and there's just nothing going on at all. The grapevine is silent; we don't even see much in the way of those news stories which tell us that there's no news. The whole thing is just......well, you know. Dumb and dumber, how about that?

The only item I have seen in the press recently is James Odato's note the other day that Penn National wrote to the governor complaining that the unknown manner in which bids are being weighed fuels "rampant rumors and gossip;" any of which are totally fair game at this point. You wanna tell me that there's a conspiracy to shutter the place, sell it off to developers and move on to a casino at Belmont; or that gaming interests from neighboring states are making secret deals to forestall the project entirely; or that Obama wants the property to establish a sovereign socialist enclave from where he can carry out his evil government takeover of health care AND EVERYTHING YOU OWN with impunity...and who am I to argue?

And what about Penn National? No conflicts of interest (that we know of), a solid balance sheet, $301 million cash upfront, no busted real estate deals (read here about SL Green losing its entire $200 million investment in the collapsed Stuyvesant Town deal), a plan to open in 10 months. The community doesn't like its "slots in a box?" Does the community really know what it wants, or what is good for it? Would they rather have nothing? Or some grandiose complex totally inappropriate for a working class neighborhood which is impracticably located via mass transit for most of the city and its suburbs? I remain neutral and open-minded on this (mostly because we really have little idea about what exactly has been proposed in what has been a secretly fluid process); but doesn't Penn National provide an easy solution? If the governor and the legislative leaders aren't enthusiastic about them, isn't that a good thing?

As you may know, I've been a big supporter of the governor; but his floundering, lack of leadership, and broken promises on this matter are hard for me to look past. With all indications pointing to a primary challenge by Andrew Cuomo, Paterson better move quickly to clean up this mess if he wants an endorsement from this corner.

Back with the latest on NYC OTB soon.


Anonymous said...

New Yorkers stick with New Yorkers.
I dont see The Governor picking Penn National. The Leaders in Albany will pick either AEG or SL Green.

SaratogaSpa said...

On January 1st our NY Governor tells us a VLT operator will be chosen within a week or two, now yesterday, writer Odato of the Times Unions says: "A spokesman for Paterson said there is no time line for a decision and that all "eligible" bidders are under consideration." I mean...What is going on here???

Anonymous said...

I suspect there will be a VLT decision very soon primarily because of the requirement to collect the #200 million to plug this years budget which ends on March 31, 2010. My understanding is that the $200 million will not be paid until the agreement with the operator is signed and as far as we know the negotiations have not yet started. Remember Delaware North negotiated for 6 months before the State withdrew and opened the process again.

Anonymous said...

Alan, I read the link to the New York Times article. I suspect there is now a question mark over SL Green remaining financially viable.

God I hope we don't get The Hard Rock at Aqueduct.

Anonymous said...

to 3:36PM:
A decision soon on Aqueduct. Lets hope you are correct. We need it.

Anonymous said...

Bill Lynch-Governor Paterson-SL Green:

Paterson is a good man and definitely not politically suicidal. I therefore suspect he wont pick SL Green for the Aqueduct Casino.

He has rightfully taken the high road on ethics reform and so cannot allow his enemies in and out of the Legislature to throw corruption allegations at him because of the Bill Lynch/SL Green direct connection to him.

Anonymous said...

I too suspect the Aqueduct race is between SL Green and AEG. Lets hope the decision is soon.

steve in nc said...

Not that slots, or the health of racing for that matter, means anything at all to our country or the world, but, this is a sad microcosm.

We can't fix the big problems or the little ones, and the saddest thing is the paralysis. The only choices society seems capable of making now are those of inertia - continuing down paths already chosen, as in the war in Afghanistan and the drug prohibition war (Dumb and Dumber).

And whether it's dealing with climate change, state budget holes, or even picking a damned slots outfit, government at every level is so divided against itself it ends up doing absolutely nothing decisive for as long as possible.

Without some seriously strong but reasonable leadership (Earth to Obama! Earth to Obama!) the public will come to believe that democracy is an ineffectual waste. The public may be just a prologed streak of unemployment away from willingness to embrace the next charming despot willing to stoke their fears.

So Patterson, pick a damned slots outfit even if it's flawed. House of Reps, pass the Senate's damned health care bill. It is better than nothing even though it sucks (it is very much like the one the Republicans proposed in the 90s as an alternative to BillaryCare - pretty funny that Republicans now say it will be the end of us all).

And while you're at it, try to remember that the planet is getting warmer while millions who could be insulating attics, producing electric cars and solar technology remain unemployed. The Chinese aren't sitting on their hands.

Democratic politicians, please do something! They'll call you Hitler if you do and Hitler if you don't, (my Tea Party friends, I'm Jewish, so go ahead and make my day), so why not go for it?

When the building is burning and it's hard to see through the smoke, you certainly risk picking the wrong escape route, but is it really so prudent to sit there and roast?

El Angelo said...

Alan, you do a great job trying to report on the Aqueduct casino situation, but for me, it's becoming the racing version of the 2nd Avenue Subway. Wake me when it's up and running, and not a minute before.

alan said...

>>....but for me, it's becoming the racing version of the 2nd Avenue Subway.

Great analogy! But even that is at least underway.

Anonymous said...

Fred G. H.B.

Finger Lakes and Tioga Downs were up and running slots in 9 months..I remember passing Tioga one Thanksgiving visiting my son in Wayland and from the highway all you saw was a dilapidat ed grassy unused trotting course, the next Thanksgiving I stopped off at a first rate emporium [for that area]. There must be other interests at work in NYC for it to take this it animosity against a democratic stronghold? Or is it just greed by the politicians looking to better their own portfolios? As a conservative, I only agree with Alan when he talks about horses, but believe he is an honest person and we both seem to agree that this impasse has lasted long enough. Did Ycaza bust through his mayoral duties down there as he handled himself here, we need Ycazamania from our state reps.

Anonymous said...

The problem I see with slots in a box is it is perfectly positioned to fail long term.

Nine years ago it would have worked, initially. Now it risks being overlooked altogethar due to increased and superior competition in place and on its way.

The Finger Lakes model is flat out boring, even for the slots players. My friends that live up there went once or twice and never returned. They travel to Niagar when they want to gamble.

And all you have to do is look at the purse structure at Finger Lakes, and the lack of improvement to the racing infrastructure, to see it has been a failure for everyone but the operator, who set the bar low and achieved their target.

To compete in NYC, even in Ozone Park, you need more than slots in a box.

Anonymous said...

Slots in a box is definitely the wrong model for Aqueduct. This would be short term thinking. The Ozone Park community understands this and is opposed to Penn National's plan.

Penn National may be a good company with about 3/4 Billion in its bank account, however it is stretching this cash across many States including Kansas, Ohio, New York (Catskills), Maryland and others. This is a company which has grown rapidly and the corporate world is littered with many companies which grew and stretched resources (management and cash) too quickly.

After 8 years of stops and starts we cannot take a risk with any company which has a question mark over its ability to perform.

alan said...

I would agree with the sentiments expressed above regarding "slots in a box" at the Big A if not for what I see as the inevitability of a grander full-scale casino at Belmont, which is what I've always felt is a far more appropriate location. In the meantime, I think that the novelty of a VLT parlor of any nature in Queens will be more than sufficient. Just my opinion.

Anonymous said...

Either do a full scale slots facility now at Aqueduct anticipating space for full gaming in NY in order to remain competative with surrounding markets, or just throw a couple thousand machines on the wall at the Big A to hold things together until full gaming for Belmont Park is approved. Unfortunately, when the Belmont casino is complete, everything disappears at Aqueduct; the temporary facility, the grandstand/clubhouse, the backside, the horses and the racing. This "temporary" scenario isn't worth $200-300 million though unless the same entity or a partner of the gaming company gets to do the infill real estate development on the Aqueduct site, be it for the Port Authority or the state.

Anonymous said...

There is no guarantee that NYRA, Purses and Breeding Fund would receive a dime from a Casino at Belmont Park. In fact it is my understanding that NYRA gave up this right as part of its new 25 year franchise extension. I would like to be corrected if my information is wrong.

Anonymous said...

close anon 12:19.

Per section 2.8 of The Franchise Agreement, Operational Support Payments: "provided, however, that, in the event that legislation is passed providing for the installation of VLT's and the commencement of VLT Operations at a location at which New NYRA operates racing and pari-mutuel wagering other than Aqueduct, prior to the instalation thereof, the State and New NYRA shall negotiate in good faith to adjust the amount of Support Fee for the benefit of New NYRA."

Same language in section 2.9 Capital Expenditures.

Hard to imagine the New NYRA and the State negotiating in good faith about anything these days!

Anonymous said...

By the way, just looked again at the sections on Purses and Breeder money, there is NO language to suggest that if Belmont Park gets VLT's that anything will be required of the Stae or New NYRA to set aside money for these. One would assume purses and breeder funds would be negotiated just like capex and support payments, but it doesn't seem to be in memorialized in the document?

Perhaps horsemen and breeders beware if Belmont ever becomes the lead focus.

Anonymous said...

Alan, I hope you follow-up on the Peter M. Carlino letter to Governor David Paterson a little more. Mr. Carlino suggests that Penn National has been a lead bidder since the beginning, seemingly throughout the entire process, but this is clearly not the case.

In what was supposed to be "your best bid first" scenario, Penn put forth a measley $5 million with strings attached that might provide for more. When the bidders were all surprised with another round in August, Penn's second bid was again ranked last in dollar amount still containing the market protection and other contingencies. All of a sudden when Governor Paterson said "more money please" Penn steps up and promotes itself as King, without really even knowing if any of the other bidders bids were comparable or better for one reason or another. This is not exactly the way the letter reads, but what the heck, this is the Aqueduct VLT selction process!

Perhaps you can confirm or reject my recollection from your prior blog strings?

alan said...

>>Perhaps you can confirm or reject my recollection from your prior blog strings?

Yes, you are correct about their initial bid. Here's the post recounting them increasing their bid to $250 million. Don't recall exactly when it was raised to its present level. I got a copy of the letter and will be posting more about it a bit later on.

Anonymous said...

Peebles organizing his pals and endorsement. Given MGM has decided to run away from AC because of its ties to the Ho Family in Macau, I very much doubt that New York will agree to get into bed with a company with clear ties to the Chinese Mafia:

FROM THE OFFICE OFHON. LEROY COMRIECouncil Member– 27th District, Queens,
NYDeputy Majority Leader of The NYC CouncilChair, Committee on Land Use
posted by gov_wire Wed, 01/27/2010 - 2:08pm
For Immediate Release:

January 27, 2010

Rance E. Huff/CM Comrie Office: (212) 788-7084 Cell: (718) 207-1158

Southeast Queens Council Members Urge Selection of
Peebles/MGM Mirage to Operate Aqueduct Casino

NEW YORK, NY- The three New York City Council representatives of the Southeast Queens Community today weighed in regarding the prolonged decision on the operation of the proposed Video Lottery Terminal at Aqueduct Racetrack. Deputy Majority Leader and Land Use Committee chairman Leroy Comrie (D-27th District), Civil Service & Labor Committee chairman James Sanders Jr. (D-31st District) and Economic Development Committee chairman Thomas White Jr. (D-28th District) announced that they are in support of the bid submitted by the Peebles/MGM Mirage group.

“I was impressed with many of the presentations that were shown to us,” stated Council Member Comrie. “Today we are strongly recommending that Governor Paterson and the Legislative Leadership accept the bid led by The Peebles Corporation to be selected as the developer of the Aqueduct.

There are a myriad of reasons why we are recommending this bid, however, what stands out is their track record of quality development throughout the country, their focus on inclusion of minority and women-owned business in the development, their commitment on providing stable economic opportunities for our community. Additionally, their partnership with the world-renowned brand of MGM Mirage will deliver a strong gaming experience for New Yorkers and visitors of the site. They have also committed to opening up an office in the Southeast Queens
community that will be centered on providing jobs within this development.”

“Their presentation was extensive and included a commitment to establish a Project Labor Agreement that would target a 40% participate rate from qualified LBE and MWBE firms in the construction and operation of the facility” said Council Member Comrie........

........After an extensive interview process, Peebles/MGM Mirage, followed by S.L. Green seem to be the clear choice for New York City . This is based on how quickly the respondent can start and what is offered to the local communities. We thank all who were interviewed and look forward to working with them on other projects.”

“Despite S.L. Green’s impressive bid, my colleagues and I decided to endorse the Peebles/MGM Mirage bid due to the partnerships experience in operating urban casinos throughout the country,” stated Council Member White. “Their strong commitment and success in implementing MWBE programs with high rates of participation like the billion dollar City Center project in Las Vegas that provided 200 minority firms with over $700 million in contracts, and our belief that the partnerships long term vision and brand name will ultimately lead to the creation of destination gaming venue that will benefit the residents of Southeast Queens.”

.......Given this indecision, the three City legislators took it upon themselves to host presentations from four of the major bidders to learn more about their project details and make a recommendation to both Governor Paterson and the Senate/Assembly leadership......

Anonymous said...

Incredible!! R. Donaghue Peebles has never done anything like the Aqueduct project before. He's a conversion expert, hotel to condo. NO gaming experience, but he is a personal friend and key fund raiser for President Obama.

MGM is the NYRA's "guy" from the beginning. My guess is this is the NYRA's last "push" to get one of theirs in as gaming operator. The Pebles/MGM push tried hard last fall and failed so we'll see how it does this time round.

The financier in the Peebles bid, Harbinger Capital, may have just completed the acquisition of Terra Star Networks a company founded by and previously controlled by none other than Jared Abbruzzese. Just makes you wonder who's got a piece of what? Do recall that Obama had invested in one of Jared's tech companies prior to his presidential run when he was an influential Senator.

Don't tell me this whole thing comes down to that?

Anonymous said...

Rumor swirling around Albany is that they Leaders have reached an agreement and will announce their Aqueduct pick tomorrow.