With Penn National and SL Green DQ'd for submitting proposals that did not conform to requirements, one can now certainly picture the scenario in which this latest round of bidding for the Big A racino ends up like all the others which have preceded it - left at the gate. That's an outcome which at one time seemed to be out of the question, with the Lottery, and not the politicians, firmly in control, and a familiar and (mostly) dependable group of bidders back for another go. It was therefore assumed without a doubt that the $250 million loan to NYRA would soon be guaranteed by the designated operator.
Of course, it's entirely possible that Genting, the lone survivor, will sail through the full evaluation that it will be subjected to, prove to be 100% licensable and financially capable, and receive the Lottery's full endorsement when it makes it recommendation to Governor Paterson on August 3. After all, everything has always worked out for the best with this thing, right?
Even if it makes it through however, the legislative leaders who have to accede to the selection may feel more emboldened to challenge this particular company (though I still think that John Sampson and Malcolm Smith just want this whole thing to go away). This Malaysian conglomerate is a company with no local roots (at one time considered to be of paramount importance), and no relations with the local community nor unions that we know of. Will Community Board 10 approve? With Aqueduct located in a key swing district in the upcoming fall elections in the bitter battle for control of the State Senate, a local thumbs-down could have wide implications. What is Genting's commitment to minority and local hiring? Any questions of that nature could cause problems in the legislature. And wouldn't Genting's financial interest in Empire Resorts present a conflict should a racino at the Concord, the owner of which would retain more than twice the percentage of revenues as would the Big A, ever be built, a mere two hours from Ozone Park (at least when there's not construction on Route 17)?
Of course, all of this may just turn out to be fine...
The non-conforming aspects of the bids submitted by SL Green and Penn National contained some alterations which make perfect business sense; and others which give me a feeling that they really didn't have their hearts in it anymore.
Once believed to be a front-runner, SL Green, for example, wanted their minimum $300 million upfront fee to be held in escrow until their conditions were met by the state. The group also wanted the right to make ownership changes without the state’s consent, a cap on any increase in local property taxes at 3%, and a complete exemption of state and local sales taxes for the construction of the racino.
Penn National, meanwhile, wanted to be able to terminate its Aqueduct video lottery license any time it decides the casino has not been profitable for four straight quarters.
The group also wanted a guarantee that no other gaming facility would open within 50 miles of Aqeuduct, despite those who are eying Belmont in the future. [Daily Politics]