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Tuesday, October 14, 2014

Location Board Selections May Not Necessarily Be The Final Word

Interesting piece from over the weekend in the Finger Lakes Times that's worth a read.  It's based on an interview with Mark Gearan and Robert Williams, the Chairman and the Executive Director, respectively, of the Gaming Commission.

I'd never considered the point raised in the lede - that Gearan would either push for a casino in his native Finger Lakes region......or specifically not do so in the interest of avoiding the appearance of favoritism.  Writer Mike Cutillo goes on to note: 

The fact, though, is this: Wherever the state’s four new privately developed casinos will be, Gearan will have had absolutely no say in the matter.

As chair of the commission, Gearan had everything to do with naming the five volunteer members of the Gaming Facility Location Board. However, it’s that board alone — and not the Gaming Commission — which is in the process of determining the fate of the 16 projects vying for those four licenses, including Wilmorite’s Lago Casino & Resort. [Finger Lakes Times]
However,  I don't believe that this is entirely true. Yes, it is the case that, as Williams notes:
“The way the statute was constructed is that these five individuals would make a recommendation [emphasis mine] on location to the Gaming Commission....The commission does not have the ability to substitute out judgment that they think one project is better than the one that was recommended ... they don’t have an ability to determine that project ‘X’ is better than project ‘Y.’”
However, while the Gaming Commission cannot judge the applicants as to which is "better," it can indeed determine that an applicant that was selected by the Location Board is not licensable.  That's its job.  And we don't need to go very far back in history for an example of this.  In 2010, AEG was selected to build the racino at Aqueduct, by Governor Paterson himself (that as opposed to this year, when Governor Cuomo expects us to believe that he's "not playing a role in that") (hee hee).  However, AEG was officially eliminated (amidst all of the obvious corruption involved in the selection) when the Lottery Division declared that the group was not licensable.  Now that the Lottery Division has been folded into the Gaming Commission, it is the latter which needs to make that determination. 

So, unless the Location Board members have been consulting with the Commission as to the worthiness of the applicants from a licensability standpoint and is making their selections with that in mind - and given that we've been repeatedly told that they are considering 70% economic factors, 20% community support [or lack thereof], and 10% workforce enhancement factors, I don't know that that's the case - it will be up to the Gaming Commission to make that determination.  Thus, the time gap between fall, when the Location Board makes its "recommendations" - Williams' word - and early 2015, when the Gaming Commission issues licenses.

So, it's possible that the Location Board could make a selection that the Gaming Commission will not license because, say, the developer owes $72 million in taxes.  Or because the funding entity is part of a company which has supported a ruthless dictator.  Or because the company markets "social" gambling games to kids.  Or for the same suspected connection to an organized crime figure that disqualified one of the developers from consideration in Massachusetts.

Please correct me if I'm wrong, but I don't believe that the standards of licensability are carved in black and white, and are therefore subject to interpretation.  Point being that, even after the Location Board makes its recommendations, there is still an opportunity for a meddling governor to meddle in the process.  The Gaming Commission is his commission, after all.

 - When questioned by the reporter about the opposition in Tyre (the local area served by the newspaper), Williams noted:
“Opposition in Albany to one of the proposals there and in the Catskills to at least two proposals is perhaps even more vociferous than what you find in Tyre, but I don’t want to diminish the opposition in Tyre by suggesting they’re coming in third place. They’re very dedicated as I think Chairman Gearan will evidence ... he’s actually had visitations to his Gaming Commission meetings from individuals from Tyre.”
Williams is, of course, referring to East Greenbush in the Albany area.  I believe he's probably actually referring to the Orange County bids in Tuxedo and perhaps Woodbury rather than to the proposals in the actual Catskills, which don't have any significant opposition as far as I know.  In a humorous column today in the Albany Times-Union, Chris Churchill ranks East Greenbush as "dead in the water."
Pros: There must be a compelling reason why this relatively affluent town should benefit from a gambling expansion designed to help distressed communities. And that reason is ... Um, I'm going to need some help with this one. Anybody? Anybody? Hello?

 - Catching up a bit from the weekend, the Times had a piece on the lawsuit by the Harriman family against the Woodbury casino.  Since I mentioned it in this post, this situation has not gone away.  The problem is a deed restriction from the 1971 sale of the land by the family which prohibits the construction of a hotel on the site.  The developers - Caesars World and David Flaum - offered the family $2 million, but that bribe payment was rejected. They thought they'd found a way around the restriction by leasing an adjoining plot from Norfolk Southern Railroad; the plan was to put the hotel specifically on that land.  At first, the Harrimans claimed that the casino and hotel constituted a single building so that the restriction still applied.  But they subsequently discovered a weapon seemingly far less subject to judicial interpretation.
..After digging through property records, Mr. Sweeney discovered the Norfolk Southern property was also under a Harriman deed restriction.

E. H. Harriman’s wife, Mary, had granted an easement to the Erie Railroad in 1910. But the contract included a clause, Mr. Sweeney said, stating that the land would revert to the Harrimans if the railroad no longer needed the property for railroad purposes.  The Harrimans notified Norfolk Southern that a casino resort was not a railroad purpose, and therefore, wanted their land back. [NYT]
Oops.  Don't you hate when that happens?


Anonymous said...

Speaking of opposition to Sterling Forest Casino. One must wonder why the Tuxedo town board is holding a separate Town Board meeting today, with only an executive session on the agenda, to receive advise from counsel on the Sterling Forest Casino? Hmmm...the Town was supposed to receive a non-refundable $1.5 million payment at the later of time of submission of bid, or after legal counsel provides opinion that the Town has the authority to execute the Host Agreement. Wow, a do-over vote would be a very colorful meeting, I'm sure.

Figless said...

Nice to see the Harriman family had such foresight.