Officials Break Ground at Aqueduct: Construction Set to Begin at Ozone Park Racetrack

By Eric Yun

In roughly six months, Genting New York will open Resorts World New York at Aqueduct Racetrack in Ozone Park, marking the end of the drawn-out soap opera to open a racino. Genting officials and politicians gathered in the racetrack’s clubhouse on Thursday for a groundbreaking ceremony.

Genting is a subsidiary of Genting Malaysia Berhad, one of the world’s largest resorts and tourism companies. It owns Norwegian Cruise Lines and own Asia’s largest casino. This will be the company’s first venture in the United States, but Genting President Michael Speller vowed to make it a showcase.

Finding a vendor to operate the racino at Aqueduct was not an easy process, something Lottery Director Gordon Medenica acknowledged by kicking off the ceremony by quoting singer Jerry Garcia: “What a long strange trip it’s been.”

That trip started in 2001 when video lottery terminals were approved for Aqueduct and other New York racetracks. And the process was strange. In 2008 company Delaware North was selected but could not pay its promised $370 million upfront payment. It became worse the following year when Aqueduct Entertainment Group (AEG) was selected, which sparked cries of favoritism and corruption among state legislators. Inspector General Joseph Fisch recently released a scathing report about the selection of AEG.

But finally, under a new bidding process where Request for Proposals were administered and vetted by New York Lottery, Genting was selected and almost immediately paid its promised $380 million up- front payment.

Governor David Paterson said the new partnership will be a “complete revitalization for Aqueduct and also the community that surrounds it.” Paterson is confident that Aqueduct will create employment and business opportunities for the area and will provide the state revenue to replenish education funding.

Job creation was the biggest issue in the community concerning the Aqueduct project. “Within the last two months, we’ve done a lot of listening in this community,” Speller said, “and one issue has come up time and time again: Queens wants and needs jobs.” Now Genting can offer more than 1,300 construction jobs and more than 800 permanent jobs to the area. For those who feared the construction jobs would go to out of state and non-union workers, Genting signed a labor agreement with Gary LaBarbera, President of the Building and Construction Trades Council of Greater New York at the groundbreaking ceremony.

“This long-awaited project couldn’t come soon enough for the people of Queens, as it will create exactly the right kind of jobs—good-paying, stable and local—that are in such high demand throughout this neighborhood,” said State Senator Joe Addabbo (D- Howard Beach).

Assemblywoman Audrey Pheffer (D-Ozone Park), who vigorously worked to save Aqueduct and get the racino project started, is thrilled that the long journey is over, and she looks forward to working with Genting. “It’s been a long road, but it was one that is going to prove better, and better then we ever dreamed of,” she said.

City Councilman Eric Ulrich (R-Ozone Park) said he looks forward to working with the company to ensure that the tradition of horseracing continues in Ozone Park. “Today marks not only a groundbreaking for the new Aqueduct Racino, but also a new beginning for the community,” he said. “Genting’s redevelopment of this site will revitalize the area, create new jobs, and bring millions of dollars in tax revenue to both the city and state.”

Genting has cleared all environmental hurdles, meaning construction can begin “within a matter of days,” according to Medenica.

Aqueduct Could Feature Video Table Games

Aqueduct Race Track is creeping closer to receiving video lottery terminals, and perhaps, electronic table games. The state Senate and Assembly both agreed last week to approve Genting New York’s proposal to revitalize the Ozone Park venue.

The proposal, which included an upfront $380 million payment to the state, was well received by local leaders and community members. Genting’s original plans include more than 4,500 slot machines, but it now appears that electronic table games may enter the mix.

“The Lottery believes the inclusion of elec- tronic table games will allow our casinos to be more competitive with other casinos in Pennsylvania, Atlantic City and Connecticut,” said Jennifer Givner, spokeswoman for New York Lottery. Electronic versions of table games such as roulette and baccarat are expected to be installed at Saratoga Springs. If successful there, the games will be installed in other New York racinos including Aqueduct.

The New York Constitution prohibits casino table games, but New York Lottery contends electronic versions of some games constitute games of chance, which are legal.

Last year, New York Lottery unveiled its plans to include electronic table games without the approval from the state. At that time, Senator Frank Padavan, a fierce critic of gambling, wrote to Gordon Medenica, Director of New York Lottery, “It is clear to me not only would such a decision be ill conceived and certainly unconstitutional but evidence of a total disregard of prior court decisions.”

Medenica replied that New York Courts specify that electronic table games are legal as long as the game is predominantly decided by chance. In Dalton v. Pataki in 2005, the courts ruled a versions of casino games can be a video lottery if it obeyed five rules: “(1) a player must give a consideration to enter the game; (2) winning outcomes must be determined by chance; (3) a prize must be awarded for winning plays; (4) tickets must be used to represent the players’ wages; and (5) the game must be designed for multiple players.”

With this decision, Medenica believes New York Lottery can install table games without approval from the state, and it would be perfectly legal. Medenica asserted that an electronic version of roulette would be no different than lotto: “All bets are based on guesses of where a ball tumbling over a wheel will land, no different than balls tumbling in a drum in a Lotto game drawing.”

State Lottery Approves Genting's Aqueduct Proposal

Project Now Awaiting OK from Governor and Senate

By Eric Yun

After ten years, it appears that Aqueduct racetrack will finally receive a vendor to operate 4,500 video lottery terminals (VLTs). New York Lottery strongly recommended approval of lone remaining bidder Genting New York to Governor David Paterson on Tuesday.

Genting New York is a subsidiary of Genting Malyasia Berhad, which owns and operates some of Asia’s largest casinos and resorts. They just finished building a $4.4 billion Universal Studios resort and casino in Singapore.

“It is with genuine enthusiasm that the Committee unanimously recommends Genting New York as the winning vendor,” wrote Lottery Director Gordon Medenica to Governor Paterson. “Our strong recommendation, based on the merits of the proposal, was vastly reinforced by Genting’s financial offer of $380 million as an upfront licensing fee.”

In a statement, Genting New York said, “We hope the lottery’s recommendation will be endorsed by the Legislature so we can immediately get to work creating jobs, preventing layoffs and delivering more than $15 billion in economic benefits to New York over the next 30 years.”

New York Lottery was able to move forward with their recommendation when State Supreme Court Justice Barry Kramer dismissed the lawsuit from Aqueduct Entertainment Company (AEC) last Thursday.

AEC (formerly Aqueduct Entertainment Group) sued the state’s lottery division in June to reclaim the “racino” project at Aqueduct racetrack. The company was awarded the bid in January, but the state disqualified them after questions about the group and the bidding procedure. A temporary restraining order was placed, which prevented the state to award the bid to another company.

Representatives from Aqueduct Entertainment Company had unsuccessfully claimed the state changed rules midway through the process, and disqualified their company in an “arbitrary and capricious” manner. The judge saw things differently. Justice Kramer said the January selection of Aqueduct Entertainment Company was not legally binding because the company was still in the vetting process at the time.

With the Lottery’s recommendation, it is now up to Governor Paterson and the State Assembly and Senate to approve the bid.

There is strong support from local elected officials to move forward and approve Genting New York. Genting officials impressed many when they unveiled their plans to the community at a public hearing last month.

“I am very pleased that NY Lottery has unanimously selected a winning vendor for Aqueduct,” said City Councilman Eric Ulrich (R-Ozone Park). “This has been a long and drawn out process for the community, but I am happy that it is finally going to reach the finish line.”

Local State Assembly Members and Senators are urging their fellow members to move quickly to approve Genting’s proposal.
“I have already spoken with Speaker Silver and now strongly urge Governor Paterson and Senate Democratic Conference Leader Sampson to move quickly to approve Genting’s proposal,” said Assemblywoman Audrey Pheffer (D-Ozone Park). “Be assured, I will demand that community concerns and input continue to be included in all future planning. We must work diligently to bring the jobs, employment opportunities and economic stimulus that Aqueduct will provide to our local community and economy,” she added.

Assemblyman Mike Miller (D-Woodhaven) is excited about the possibility of additional jobs for his constituents. “Selecting a bidder for Aqueduct is an important step towards alleviating our high unemployment rate and our shortfall in state revenue,” Miller said. “I feel that Genting will prove to be a good choice because they are responsive to community concerns. They will make efforts to hire locally, and will cover their own security.”

If Genting is approved, it would provide more than 1,300 jobs to the community through the long-awaited revitalization of the Ozone Park racetrack. Senator Joe Addabbo (D-Howard Beach) is happy not only about the installation of VLTs, but the fact New York Racing Association will be able to continue horse races at the track.
“I look forward to working with Genting and the community as we move forward with building Queens’ newest tourist at- traction that will provide 1,300 construction and post-construction jobs, financial benefits to the state, and long-term benefits to my constituents,” Addabbo said. “I will also continue to stress those issues that need to be addressed by Genting, particu- larly traffic patterns and public safety.”

For many in the community, New York Lottery’s recommendation of Genting was met with optimism. But after the problems in previous rounds of bidding, including the disqualification of Aqueduct Entertainment Company and the previous failure of Delaware North to generate the promised upfront funds, the enthusiasm is tempered.

“Only when the ink is dry, I’ll believe it,” said Betty Braton, chairperson of Community Board 10. She looks forward to future interactions with Genting, and disseminating information to the community as she receives it. “It’s time to get this done,” she said.

Genting Unveils Racino Plans

By Eric Yun

A casino at Aqueduct racetrack designed and built by Genting New York would be more than just “slots in a box.”

That was the message representatives from Genting gave to community leaders and members last Thursday as they presented their plans for the “racino” project at the Ozone Park racetrack.

The meeting, held by Community Board 10, was originally intended to include SL Green and Penn National Gaming, two companies that also submitted bids for the project. However, New York Lottery disqualified the bids, leaving Genting New York as the sole bidder.

SL Green and Penn National Gaming’s disqualification was just another setback in the seemingly never-ending search to find a vendor for the Aqueduct casino. This is the fourth time New York Lottery has attempted to find a bidder for the project, and many are hoping it is the last.

“I think the time has come for us to stop split- ting hairs and approve a vendor for a racino at Aqueduct,” Assemblyman Michael Miller (D-Woodhaven) said in a statement before the presentation. “People have waited too long for this process to come to fruition.”

Complicating matters, however, is Aqueduct Entertainment Group’s (AEG) lawsuit against the state. AEG was awarded the rights to Aqueduct last year, but the state later rejected the group after a controversy arose about AEG’s finances and political favoritism. Last week, a judge granted a temporary restraining order on the Aqueduct process as AEG takes their motion to court.

Legal issues aside, Genting officials showed up to the meeting ready to show the community why they’re the best bet for the project. Genting had three set goals in their meeting: Inform the people who they were as a company, show off their plans for the casino, and listen to community questions.

Genting New York is a subsidiary of Genting Malaysia Berhad, the only casino company with an investment grade bond rating. They own and operate one of the world’s largest casinos in Malaysia and a Universals Studios resort in Singapore. JCJ Architecture, an award-winning firm for their work in casinos, which has previously designed the casino and raceway at Saratoga, created the designs. The building company is Tutor Perini, a company responsible for the recent $300 million JFK runway project and the Jamaica AirTrain station.

Genting’s proposal includes a state of the art facility with first-class amenities. The grand entrance will open up to a three-story atrium that features a digitized water show. Besides the 4,500 slot machines, they stressed that the project would have entertainment and dining for everyone. There will be a two-story food court, a 200-seat restaurant, and a high-end Chinese restaurant. There will also be lounges and bars throughout the casino.

“We want to create a great destination area,” Mike Speller, president of Genting New York, said. “We’ll be more than just slot machines.”

Jay Walker, spokesman for Genting, observed that there is gaming money available in New York City, but it escapes to casinos in Connecticut and Atlantic City. The company hopes to keep the money in the state by making the casino a tourist destination. The biggest hope is to create a working relation- ship with John F. Kennedy Airport to lure some of the 45 million people a year who travel there to make a stop at Aqueduct. Walker considers JFK their “biggest asset.”

“If we do it right, we’re just a subway ride away,” Walker said.

Genting also stressed the benefits the community would receive. Approximately 1,300 construction jobs and 800 permanent jobs would be created from the project. Furthermore, they promised to spend money in the neighborhood: more than $30 million dollars will be spent locally to buy goods and services needed for operations, and one percent of net profits will be donated to the community.

Genting representatives promised if they are awarded the bid, they will work quickly and efficiently to finish the project. “We’ll build it fast; we’ll build it right,” Speller told the crowd.

How fast? The tentative time schedule has Genting opening the doors to Aqueduct six months after acquiring the bid. Final construction will be completed within 18 months.

Genting left residents and community leaders impressed with their presentation.

“I thought the presentation was excellent,” Elaine Holland, a community board member said, “I think they explained themselves real well.”

Community leaders present echoed the sentiment. “I was very encouraged,” Assemblywoman Audrey Pheffer (D-Ozone Park) said. Pheffer noted most questions were answered, but she had some public safety concerns.

Genting did mention security concerns during the meeting. “Security is the first thing we talk about,” Walker said. “If patrons don’t feel safe, they don’t come.” However, Pheffer said more work has to be done, specifically, the working relationship Genting might have with the NYPD.

Senator Joe Addabbo (D-Howard Beach) also had public safety concerns. “It is the obligation of the vendor to ensure the security of patrons and the surrounding community,” he said. Addabbo wants more information on the personnel that will be used so the casino can refrain from depending on the 106th Precinct. Addabbo noted that from the beginning of the process, he and other leaders “reiterated the concerns of the community, which were public safety, traffic and jobs. Genting did a fine job in their first step” to address these issues.

Another major issue was Genting’s reliance on the MTA. “In light of the recent MTA service cuts, it is unclear whether or not Genting will be able to rely on an already overburdened public transit infrastructure,” Councilman Eric Ulrich (R-Ozone Park) said, “The A Train is already bursting at the seams and bus service is wholly inadequate. I’m concerned the MTA won’t be able to provide the level of service the company is counting on.”

Pheffer also had concerns about the MTA. “We would need to work with the MTA to make the Aqueduct station operational,” she said, “A little more should be done with other forms of transportation like express bus services.”
While there are still many things to be worked out, most people seem set to move forward with the process. New York Lottery hopes to send a recommendation to the Governor and state legislature by August 3.

“It’s about time we determine a vendor,” Miller said.

Review of Lone Aqueduct Bid Continues

By Eric Yun

Genting New York is continuing to move forward with plans to build and operate video lottery terminals (VLTs) at Aqueduct race track in Ozone Park, but still has many hurdles to clear.

Genting New York, a subsidiary of one of Asia's largest casino and resorts operators, is the only remaining bidder for the project. SL Green and Penn National Gaming also submitted bids in June, which were rejected by New York Lottery because the two companies attempted to renegotiate the terms to be more favorable.

As the lone bidder, Genting has begun to release their plans for the "racino" project. Besides the 4,500 VLTs, Genting has planned many amenities for the facility. These include a two-story food court, a spacious area that could be used for community and corporate events and shuttle busses to John F. Kennedy (JFK) Airport.

New York Lottery is reviewing Genting's bid, and will have a final recommendation for the state by August 3.

This is the fourth time companies have vied for the right to operate VLTs at Aqueduct. In two of the previous attempts, Delaware North was selected, but they were forced to withdraw after failing to raise the $370 million up front fee they promised to the state.

Most recently, in June 2009, Aqueduct Entertainment Group (AEG) was selected for the project. The deal fell apart, however, after an investigation by the state inspector general, which is still ongoing, and charges of political favoritism.

As state Inspecter General Joseph Fisch continues to probe for more information regarding AEG's controversial selection, the company is not sitting idly. Last week, AEG filed a motion in New York Supreme Court requesting the right to sue New York Lottery and Govenor David Paterson, Assembly Speaker Sheldon Silver, Senate Conference Leader John Sampson and Senate President Malcolm Smith.

In their motion filed in court, AEG claimed their rejection was "a result of the arbitrary, capricious, unauthorized and discriminatory actions taken against [us]."

Among their complaints is a claim that Assembly Speaker Silver demanded detailed financial information from passive investors who were not directly involved with the project, "nearly a year after the bidding process." They also claim the state did not "provide AEG adequate notice of important deadlines ... or afforded AEG an opportunity to be heard on Lottery's denial of its license application or the Governor's single-handed rescission of the Aqueduct contract."

"We seek a temporary restraining order until we have a hearing or trial," said Daryl Davis, one of the lawyers representing AEG, according to a report published in Crain's New York Business.

If a judge sides with AEG, the Aqueduct project may be put on hold again as the state deals with the litigation.

Another major concern for any bidders on the Aqueduct "racino" is the possibility of a casino from the Shinnecock Indians. They were granted federal recognition as a tribe after a 32-year battle, which paves the way for them to open a casino with video slots but no table games—on their land in the Hamptons.

However, The New York Times reported the state is hesitant to open a casino in the Hamptons because of already existing tourism traffic and are exploring sites in New York City. The Shinnecock Indians are hoping to gain land and permission to build a full casino with table games. Such a casino might be a deathblow to VLTs at Aqueduct.

As the process to create VLTs at Aqueduct race track drags on, there are some who question if VLTs are the best option for Aqueduct.

Undoubtedly, gambling at Aqueduct with VLTs would help revitalize Aqueduct and bring millions of dollars in revenue for the winning bidder and the state.

Hugh O'Neil, writing for Center for an Urban Future, argues that the 192 acres of land could be better utilized.

O'Neil believes New York would be better served by using the land to build an "airport city" that thrives because of its proximity to JFK Airport. He cites many cities such as Dallas-Fort Worth and Denver that have partnered with their airports to build commercial developments.

Other cities have much more available land, O'Neil acknowledges, but he believes the city and state could do better with what they have. New York City has begun developing areas around the Jamaica AirTran station. The Aqueduct property, with even more land, holds an opportunity for "low- to medium- density development (such as office buildings, distribution facilities, hotels or a conference center) and still have plenty of room left for community uses," according to O'Neil's report.

For now, New York Lottery and Genting are hoping that they will be able to operate VLTs at Aqueduct race track. Representa- tives from Genting will hold a public meeting with Community Board 10 on Thursday, July 16, at 6 P.M. to discuss their plans with the public.

Aqueduct Bidders Get Axed; One Remaining

By Eric Yun

The tumultuous quest to build and operate video lottery terminals at Aqueduct Racetrack took another turn this week when state Lottery Commission rejected SL Green and Penn National’s bids. This leaves Genting New York as the only remaining bidder for the “racino” project.

Neither SL Green nor Penn National is a stranger to Aqueduct’s bidding process. Both groups submitted bids last June when the Aqueduct Entertainment Group was selected to operate the casino. Aqueduct Entertainment Group’s bid was eventually dismissed after a political battle and charges of favoritism.

In a press release explaining its to reject the two bidders, the Lottery says SL Green and Penn National Gaming failed to comply with mandatory requirements in their proposals, which were submitted on May 11.

Both groups were uneasy about the possibility of the Shinnecock Indian Nation building a new casino within 50 miles of Aqueduct. SL Green asked for compensation if a new casino is given more favorable taxes. Penn National wanted a guarantee that no casino would open with 50 miles or com- pensation if one were to open.

The $300 million minimum payment for the project was another point of contention. Both groups requested the money be held in escrow until all conditions have been met. Penn National also requested a refund if there were unfavorable changes state laws.

Other changes requested by SL Green include the ability to award operation or management contracts to third parties. Penn National’s other changes include the ability to abandon the Aqueduct project if they operate at a loss for four consecutive quarters

“Most of SL Green’s and Penn National’s proposed changes were raised during the course of the Lottery’s three rounds of questions and answers,” Lottery Commission said in its statement. “It was made clear to all bidders that non-conforming bids would be disqualified.”

SL Green and Penn National will be refunded the $1 million payment made after submitting their bids back in May.

Originally, six bidders were interested in operating the casino at Aqueduct racetrack: SL Green, Penn National Gaming, Genting New York, Clairvest Group, Delaware North and Empire City Yonkers Raceway. Delaware North and Empire City dropped out before submitting a bid, and Clairvest joined SL Green in an attempt to strengthen their bid.

The state is still reviewing Genting New York’s proposal. Genting operates Asia’s largest casino, in Malaysia. If their bid is not approved, New York Lottery will be unsuccessful for the fourth time to find a group to operate the casino at Aqueduct racetrack. New York Lottery hopes to make a final recommendation by August 3.

Community Board 10 will hold a public hearing on July 15th at 6 p.m at Aqueduct Racetrack. Representatives from Genting will make a presentation of their proposal to operate the VLTs at that time.

Three Groups Submit Aqueduct Bids

The Forum Newsgroup

Three bidders have emerged in the latest bidding war to operate video lottery terminals (VLTs) at Aqueduct Racetrack.

After the Aqueduct Entertainment Group’s bid was denied in March, the New York Lottery opened up bidding again in June when six bidders met: SL Green Realty Group, Delaware North, Penn National, Empire City Casino Yonkers Raceway, Genting New York, and Clairvest Group.

The three groups that submitted bids on Tuesday were Genting New York, Penn National, and SL Green Realty with Hard Rock. The Clairvest Group ended up partnering with SL Green and Hard Rock’s group.Genting is the operator of Asia’s largest casino in Malaysia.Penn National operates over a dozen casinos and racetracks across the United States. SL Green is one of New York’s largest Realtors and is joined by Hard Rock, which operates restaurants and casinos across the world. Clairvest, once a part of Aqueduct Entertainment Group, is one of Canada’s
largest investment firms.

The Aqueduct racetrack is expected to generate over $1 million a day in tax revenue for New York and over $800 million a year for the winning bidder. Bidders are concerned about making a $300 million payment upfront and the possibility of a Shinnecock Indian casino outside the city in Suffolk county.

New York Lottery plans to recommend a winning bidder to Governor Patterson and state legislators by August 3.

Thousands Attend Job Fair Sponsored by Addabbo

By Patricia Adams

One of the larger crowds seen at Aqueduct in the recent past lined up on three floors of the raceway last Friday afternoon - none of them in attendance because of their racing interests.

Instead, more than 2,800 people were there for a job fair hosted and organized by Sen. Joe Addabbo. Thousands of people stood together in the ailing venue in hopes of finding a solution to their own struggles. The crowd, mixed among men and women, young and old, the experienced and the very willing to learn, all came together with the common goal of finding a job.

Vendors from more than 140 companies were on hand to screen the applicants, accept their resumes and discuss job potential. “I am delighted with the response that we got,” said Addabbo, “however the size of the crowd is indicative of just how serious the unemployment crisis we face is, and that is certainly quite upsetting.” In addition to the standard job fair offerings, attendees also had the opportunity to attend seminars offered by vendors and job counselors.

“We took this approach and included other components in the fair because such a diverse group of people does not have cut and dry needs,” the senator said. “What we are trying to do is to offer everyone a viable chance at finding work.”

And to the delight of those standing on long lines, it was well worth the wait. Kathy Vitello was born and raised in Richmond Hill and now lives in Kew Gardens. After working as a project manager in production and design for more than 23 years, the ad agency she worked for closed down last year.

“I have been searching since I am out of work but nothing has happened,” said Vitello. “What Joe Addabbo has done here today is amazing. I am both grateful and impressed.” Vitello said that her job hunting has proven to be fruitless and often frustrating, but she said, “today for some reason I feel hopeful. I am now willing to look at freelance opportunities to get something going.”

And many like Vitello were quick to offer praise and thanks for the senator and his staff. “This is a great opportunity,” said Jack Sampson. “I have had the chance to see companies here that would not even let me in their doors. We all owe this guy [Addabbo] big time for helping all these people like this.”

Another integral component to the job fair was the provisions made for one of the most rapidly growing unemployment faction’s today - seniors. “There is a tremendous need today for senior positions,” Addabbo stated. Because of the downturned economy and the rising cost of living, seniors find themselves faced with the unexpected—seeing their retirement funds run out long before the end of their lives. One group on hand to address the special needs of seniors was AARP.

There were also groups of professionals who were there to offer advice and the potential of jobs later down the line. Helmets to Hardhats, Dressing for Success and Vets Helping Vets, were just a few of the organizations present to discuss possibilities and plans of action for future employment opportunities. Candidates planning career changes also had many opportunities to discuss details with a variety of companies.

According to Sen. Addabbo, one of the most beneficial features of the fair is that the help available on Friday did not end with the close of the day. The senator’s office is in close contact with many of the vendors who maintain that they received a large quantity of quality resumes from the day. In addition, any candidates for employment that ran out of resumes or missed a particular vendor can still reach them through the senator’s office. “We will forward resumes for people that ran out of them or missed an employer that might have left for the day.

Aqueduct Project on Shaky Ground

By Patricia Adams

Although a casino operation is planned for development at Aqueduct Racetrack in Ozone Park, the continued drama surrounding the project is more of a circus than anything else.

Earlier this week, Rev. Floyd Flake announced that he would remove himself as an investor in the Aqueduct Entertainment Group (AEG), the consortium that was chosen to develop the long awaited video lottery terminals at the struggling raceway.

Insiders speculate that the Rev. Flake, as well as rapper Jay Z, had both dropped their investor positions with AEG due to a requirement by the State Lottery Division for the provision of extensive financial documentation from small investors.

Other sources maintain that Rev. Flake was under pressure from his congregants to exclude himself from any affiliation with a gambling venture. While Flake remained unavailable for comment, he did release a statement in which he said the Aqueduct project had caused him to be distracted from his many obligations at his church.

Still, officials at the State Lottery refused to comment on AEG’s status or if they had met the state filing requirements. If the deal with AEG does fall apart on or before the March 31 deadline, it would result in the state losing the promised upfront payment of $300 million. According to published reports, AEG “remains committed to obtaining state licensing of all investors by month’s end, and has access to the needed cash.”

On Tuesday afternoon at a press conference, Gov. David Paterson recused himself, on the advice of his attorneys, from all pending negotiations concerning Aqueduct.

When reporters pushed the governor about choosing AEG in the first place, Paterson responded that he “certainly thought it was right at the time,” adding “whether or not they are able to comply with the protocols is the same problem that one of the other companies was unable to do last year, and so we’ll just wait and see whether that application is valid.”

According to published reports in the Daily News, AEG could lose their rights to develop the project because they failed to meet state requirements. Reportedly, the Lottery Division informed Gov. Paterson’s staff by memo on Tuesday evening that AEG is “unlicensable” for numerous reasons.

Local officials remain concerned as to the fate of the project and there is no confirmation as to what will happen in the eventuality that AEG is bumped from the project. “It is sad that after eight years this questionable process has not resulted in a signed agreement to get the project underway,” said Betty Braton, Chair of Community Board 10.

In the meanwhile AEG says they are continuing with their plans for development and are hosting a job fair associated with the project at a middle school in the area on March 20.

Officials Have Differing Views on Aqueduct Redevelopment

Addabbo, Pheffer, Braton Call For End to Delays

By Conor Greene

Local officials and community leaders have mixed feelings on whether the Aqueduct redevelopment project should immediately move forward after the governor’s pick has been criticized as politically motivated.

The decision to pick Aqueduct Entertainment Group (AEG) to rebuild the Ozone Park racetrack into a racino featuring 4,500 video lottery terminals has come under fire over the past few weeks. Critics say AEG was chosen in part because of connections between Gov. David Paterson and several of the consortium’s key partners. There are also complaints that AEG was allowed to unfairly revise its bid to beat out the other competi- tors.

According to reports, the U.S attorney’s office has issued a subpoena to the state for all documents related to the bidding process, and federal investigators have been discussing the process with losing bidders.

This week, the Daily News reported that Assembly Speaker Sheldon Silver is waiting until the Inspector General completes his investigation before signing off on the deal. “I think everything should wait until that information is available,” the Manhattan Democrat told the paper. “I think what’s important is we know we’re signing on to something that’s appropriate, and if not, we’re not going to.”

The decision to choose the politically-connected AEG over other bidders with more experience in the casino industry has been widely criticized since it was announced. In an effort to quell the skepticism, Gov. Pater- son last week released certain documents related to the bidding process. However, a recent Siena poll revealed that only three percent of respondents view the deal with AEG as “fair and appropriate”.

However, local officials say, despite legitimate questions over the process, the time has come to move forward on the project, eight years after the state approved video lottery termi- nals at Aqueduct. In a joint statement, Senator Joseph Addabbo, Assemblywoman Audrey Pheffer and Community Board 10 Chairwoman Betty Braton argue that, “two governors later, VLTs are still not up and running at Aqueduct, a community is in a frus- trated limbo, and our cash-strapped state is still not realizing much-needed income.”

In the statement, Addabbo, Pheffer and Braton argue that the same selection process was used this year as last, when Delaware North was initially chosen but backed out after it was unable to provide the state with the promised upfront payment. “There was controversy then, as there is now, about the use of that previous process,” the officials wrote. “That selection was met in the local community with much skepticism... Yet no call for a special investigation or media attack was evident then.”

Now, according to the officials, “the media- driven firestorm now calling for details, criteria used and investigations, is to some, unfortunate and very late.”

Addabbo agreed that the selection process created a year ago is “flawed” due to its lack of transparency and objective criteria. “But what is not fair game is to scrap the entire project at this point... The potential jobs this racino project offers are needed now, not later,” he said in the statement. “The state has to deal with its budget now, not later.” He added that many area residents have been calling for this project to move forward for years.

Pheffer said it is “imperative” that the state moves quickly to finalize the contract with AEG and called the project “an economic engine that is vital to the future of the local economy.” She criticized the attacks on AEG at this point, as there has “been ample time for all the calls for documents from all bid- ders to be released and calls for scrutiny of all investors in each of the bids over the past year.”

While also agreeing that the process employed in Albany is “not the best way to make this kind of decision,” Braton also called for the project to move forward without delay. “Our criteria in looking at the information provided to us by all the bidders could be summed up by five questions,” she said. “Can they build it? Can they run it? Will this proposal mesh well with our community? Will the company be open to working with us to minimize any negative impacts? And will the state realize a big pot of money that will help ease the burden on New York taxpayers? The AEG selection meets our criteria and we can work with them.”

Questions Surround Gov's Aqueduct Pick

By Patricia Adams

The sigh of relief that came with last week’s award of the bid to redevelop Aqueduct Racetrack was followed this week by a sigh of contempt from local elected officials and residents alike.

The focus of local furor centers on allegations swirling rampantly about Albany that David Paterson is on the cusp of a possible resignation from the governorship -- and that the bid award was motivated by political agenda. The contract in question is for the installation of 4,500 video lottery terminals at the struggling Ozone Park venue.

On Friday afternoon Paterson’s lead counsel, Peter Kiernan, made statements admitting politics was a critical factor in choosing the Aqueduct Entertainment Group as the winner. Kiernan’s statements came on the heels of protestations from groups who lost out on the bid, citing a flawed process complicated by what they called political favoritism.

James Featherstonhaugh, a veteran Albany lobbyist who represented Delaware North in the bidding, called the process and its associ- ated delays, “bizarre,” adding that he “never witnessed anything like it in 40 years of experience in Albany.”

State Senator Joe Addabbo (D-Howard Beach) spoke out on Friday during an interview with NY1. “I have been a critic of it [the process] ever since I felt that we had the same number of bidders for the last eight months and we’ve had all their financial information for the last eight months. We could have made this decision some time in 2009,” said Addabbo, “it took us this long to make this decision and then when the decision is made, it’s questionable.”

Assemblywoman Audrey Pheffer has been involved from the inception of the Aqueduct proposal. “It’s a very serious issue that we have these potential complications,” Pheffer told The Forum. “The state needs this money by April 1 and we can only hope that everything will move forward. I assume they [AEG] are going to come up with the $300 million and if they can’t I trust that they’ll tell us so that we can move on.” Pheffer says she was particularly encouraged by the transparency AEG displayed throughout the process.

During an interview with The Forum, Community Board 10 Chair Betty Braton expressed confidence in the winning bidder. "AEG's proposal to develop the VLT facility is a solid one, the company has been communicating with us and has been forthcoming over the course of the past year with any information the Community Board requested,” she said. “The conditions set forth as part of the decision are certainly reasonable ones and AEG has indicated the company can meet them. We expect that it will.”

Braton indicated that she shares the dismay of both Addabbo and Pheffer over extended delays and agrees that the focus must be on progress. “It's time this project become a reality. We look forward to working with AEG and their NY and Queens partners: Levine Builders, Turner Construction, and Green- Star Services to create the VLT facility along with the thousands of much-needed jobs it will create.”

Jeffrey Levine, a partner in AEG, said his group “was selected by Governor Paterson, Senator Smith and Speaker Silver because our bid represents the best value for the taxpayers of New York and the best plan for the residents of Queens. We will pay the $300 million upfront licensing fee by March 31, 2010, and are working towards signing the MOU and breaking ground as soon as possible."

Andrew Frank, a spokesman for AEG said the consortium was “very pleased to have been selected. We understand that the other bidders are disappointed. Had we lost we would be [disappointed] too.” Frank expressed confidence in the future of Aqueduct project under AEG’s lead. “We put ourselves in a po- sition to have been selected and we’ll get through it. We are going to pay the state $300 million, provide the jobs we promised and build it.”

On Tuesday, Paterson called a press conference and struck what was defined by one observer as “an almost defiant pose” following an interview with the Albany bureau of the New York Times. Paterson maintained that he would not be leaving the governor’s mansion unless the decision was made “at the ballot box” by the voters. The only option for Paterson leaving office before his termwould be “in a box.”

Now the state and local community sur- rounding Aqueduct will wait to see if AEG can meet the conditions imposed by Assembly Speaker Sheldon Silver in order for the deal to be final and move through the Memorandum of Understanding (MOU) process.

As part of the agreement to accept AEG, Silver laid out four “non-negotiable” terms:

--AEG must pay a $300 million up-front licensing fee.

--Anyone with a felony conviction within the past 15 years is barred from being a partner in the deal.

--The project must be environmentally sound.

--Legislative leaders must have veto power over any subsequent changes to the plan.

Following the announcement by Silver, AEG announced that the Darman Group would step down as a key partner in the project because of a misdemeanor conviction against one of its leaders, Darryl Greene. Greene has closes ties to AEG partner former congressman Floyd Flake, and state Senate President Malcolm Smith.

AEG released a statement on Tuesday to address the situation regarding political affiliations. "We can unequivocally state that Senator Smith nor any government official involved in this process will ever be employed by Aqueduct Entertainment Group or any of its partners, investors or affiliates.”

Firm Finally Chosen to Develop Aqueduct Racino

AEG Will Have to Meet Further Conditions

By Patricia Adams

After eight months of delays, Gov. David Paterson announced Friday that he and legislative leaders have chosen the Aqueduct Entertainment Group (AEG) consortium that includes multiple builders and a former Las Vegas casino executive to construct and operate Video Lottery Terminals (VLT’s) at Aqueduct Racetrack in Queens.

“After an extensive review of the five remaining bids to operate the video lottery terminals at Aqueduct racetrack, I have chosen and the leaders (of the state Assembly and Senate) have agreed the organization that best fulfills our selection criteria,” Mr. Paterson said, in a press statement. “All of the groups have valid proposals, but AEG presented a comprehensive bid that enjoys community support and also offers strong marketing appeal.”

The selection of AEG is however, subject to conditions according to Assembly Speaker Sheldon Silver, who said he agreed with the governor’s choice. The award of the bid ends delayed construction at Aqueduct since it was first approved in 2001, and one big modification is the additional $100 million dollars AEG will have to add to its upfront payment to the state. Now the deal will include a boost to licensing fees--from $200 million to $300 million.

The increase comes as a result of matching the highest offer that had come from Penn National Gaming Inc. A series of other demands have also been imposed at the last minute to get final legislative approval, including a serious investigation of all individuals tied to AEG before a contract will be awarded.

The announcement of the winning bidder comes on the heels of recent pressures in Albany to make a choice. Paterson said AEG had financial viability and best fulfilled the selection criteria, though all five groups under consideration had valid proposals.

Lawmakers originally approved a plan to install as many as 4,500 VLT’s at the track more than eight years ago, with a percentage of revenues paid to the state. Paterson spokesman Morgan Hook said Friday that the administration hopes to have the memorandum of understanding signed within 30 days, with the upfront payment due then.

Jeffrey Levine, Founder and CEO of Levine Builders and partner in AEG spoke on behalf of the consortium. "Aqueduct Entertainment Group is honored to have been selected to operate the video lottery terminals at Aqueduct racetrack. As we have said since day one, Aqueduct Entertainment Group has the best team to design, develop and operate the facility. We know we will be a great partner with the state and the residents of Queens for years to come. We look forward to completing the memorandum of understanding and beginning construction."

Local lawmakers Senator Joe Addabbo (D-Howard Beach) and Assemblywoman Audrey Pheffer (D-Ozone Park) have both involved in the project since its inception.

“Months ago, AEG claimed that they can deliver the racino faster than their rivals, which would start an expected flow of $1 million a day to the state that much sooner,” said Sen. Addabbo. “AEG has strong New York partners, such as Turner Construction Company and Levine Builders. After many discussions with them, I am confident that my district office and I can work with AEG on creating an environment at Aqueduct that is beneficial to New York State, NYRA and the people of the surrounding communities.”

“The racino will bring welcomed economic growth to our community by providing jobs, both during the construction and also full-time permanent jobs for the operation of the facility,” said Pheffer. “This project will be a strong economic engine for the local economy by providing added revenue for New York State, increased educational funding and much needed employment.”

According to Pheffer, AEG has widespread support from local groups including Community Board #10, the Queens Chamber of Commerce and many community and civic organizations. “We have had many false starts in the past and I am thrilled that we will now begin to move forward with a successful project for Aqueduct,” stated Pheffer.

The partners in AEG, are the Navegante Group led by Larry Woolf, former chief executive of MGM Grand Hotels in Las Vegas; building contractor Greenstar Services Corp.; Turner Construction Co.; Levine Builders; the Darman Group Inc. and Empowerment Development Corp.; PS&S Design; Siemens; and merchant bank Clairvest Group Inc.

Addabbo to Paterson: "You're Not a Leader"

Senator Slams Governor Over Aqueduct

By Patricia Adams

“It’s an absolute embarrassment.” That is how Senator Joe Addabbo described Gov. David Paterson’s failure to deliver on a promise made three weeks ago to finally name a Video Lottery Terminal operator at Aqueduct Racetrack. “If we judge the governor by the leadership decisions he makes he will not be judged well.”

And then there are the indecisions. The senator says that there is no reason in the world that the decision has not yet been made and he says at this point other action must be taken. “David Paterson is clearly not a person of leadership or decision. He’s in true jeopardy. He is in the process of tossing away 200 million dollars. It’s absurd.”

Now after eight months of waiting and procrastination, Addabbo contends there must be an alternative plan of action. “We are investigating any and all possibilities to settle this matter outside the governor’s office.”

The extreme urgency of the situation is further compounded due to the impending close of the state’s fiscal year—it’s slated to include the $200 million upfront money from the chosen VLT bidder. “Can you imagine if this deficit has to be applied to next year—it’s a state disaster in the making.”

According to Addabbo the governor is not paying attention; the consequences of his “fence parking” are presenting a grave danger to the financial health of the state. Widespread concerns from civic and community leaders throughout the Aqueduct community are being expressed in the form of letters, e-mail and phone calls to elected officials.

“We have to take action to address this issue outside of the governor’s office,” Addabbo stated. The senator says he will again speak to the Democratic State Senate Leader John Sampson and Assembly Speaker Sheldon Silver. “They have to pressure the governor too—both sides of this decision have to force a decision.”

In the process to choose the vendor all necessary reports are in according to Larry Love, legal counsel to Assemblywoman Audrey Pheffer. “All the information on these bidders is in. Their financials are in. The only thing missing is a decision.”

Love says the governor has put off the decision long enough and has to pick someone. “To be losing that kind of money—how foolish.” Pheffer maintains that she and Addabbo have been struggling with this process for what seems an endless time.

“We don’t know for sure that the vendor chosen will be the absolute perfect choice. But what we do know is that without any choice we are losing at least $1 million per day,” said the senator. And if Addabbo’s figures are on the money, the delay has already cost the state and the local economy almost $250 million in desperately needed revenue, since the last stall in the process ensued.

The Aqueduct situation was introduced for discussion at civic meetings this week in Ozone Park and again in Woodhaven. “The people here want answers,” Joe Addabbo told The Forum. “They’re certainly not being unreasonable—they—we all have waited patiently for far too long.”

To that end Addabbo says he will take action and will likely be joined by his colleague in the assembly and many civic and community organizations. “We’re in the process of having discussions about some plan of action for the very near future, and it could very well come in the form of a rally to be held at Aqueduct.”

As part of the trickle down-effect of the stunted process, an already struggling New York Racing Association has recently been hit with pollution violations for dumping manure into Jamaica Bay. The racing operator is recorded as having more than a dozen violations which could amount to fines totaling hundreds of thousands of dollars.

The possible fines come on the heels of talk by NYRA about requesting a state bailout of about $30 million if a bidder is not chosen almost immediately to begin development of the property at Aqueduct.

Sen. Addabbo has stated that he is focusing on a tentative rally date no more than two weeks away.

Residents Warned to be Alert Following Burglaries

Following a rash of residential burglaries over the past month, Assemblyman Mike Miller is urging residents to take steps to ensure their homes aren’t easy targets for criminals.

Miller (D-Woodhaven) is reminding his constituents to take simple but important precautions such as leaving a light on when you’re not home, having your key ready as you approach your door, covering and locking windows and using a chain bolt when opening the door to strangers. While on vacation, residents should set automatic light timers and have mail and deliveries stopped.

“These tips are essential to protect you and your family,” said Miller. “By staying alert and implementing these simple suggestions, we can work together to make our community safer.”

The reminder comes after a number of home invasions were reported in December within the confines of the 106th Precinct, specifically in Ozone Park, South Ozone Park and South Richmond Hill. Officers of the Community Affairs Units of the 104th Precinct and 102nd Precinct, parts of which are within Miller’s district, say their areas have not seen a similar spike in homes invasions over the past month.

Among the reported burglaries were five incidents in the area stretching from Aqueduct Race Track to 130th Street and from Rockaway Boulevard to the North Conduit. In one case, a 123rd Street homeowner awoke to find two burglars inside his house. One fled the scene, but the other was arrested after the homeowner confronted him.

Later last month, it was reported that police have arrested nine individuals in connection with the burglaries. Arrests were made throughout the neighborhoods that were hit hardest by the burglaries.

Residents can have a crime prevention survey of their home conducted for free by contacting the precinct at (718) 845-2223.

Governor to Legislators: Let's Decide on Aqueduct Redevelopment

Paterson Vows Decision by Week’s End

By Patricia Adams

Gov. Paterson says he won’t wait beyond this week to choose an operator for the video gaming facility at Aqueduct Racetrack.

Paterson announced his intentions to reporters at a New Year’s open house at the Governor’s Mansion. "What I am probably going to do in the next week or so is to pick one myself and try to publicly persuade them to embrace this decision."

According to the proposal, Paterson and the leaders of the Assembly and Senate must all agree on a VLT operator. But the lawmakers have been in a stalemate for months over which of the bidders will be chosen to run the long anticipated Racino.

Paterson blames legislative leaders because they have not been able to reach a decision, while the lawmakers blame the governor for the stall in the process. Critics of the so-far failed project have much to hang their hats on. Beginning with a collapsed deal after making an initial selection of Delaware North back in October 2008, the state has continued to fall further into deficit. The expected revenue loss without a deal is $1 million per day.

Senator Joe Addabbo says he has made repeated requests to the governor’s office to make a choice. “Aqueduct is not a priority to this governor,” Addabbo said in an interview with The Forum. “There is no rational reason why a decision has not been made.” Addabbo says his criticism is based on the fact that lawmakers have had all the necessary information on bidders for six months. “We have every piece of information on the bidders to make a decision. We can’t get started without some type of decision.

Addabbo says he is frustrated over the fact that so much revenue has been lost during the standstill and that many jobs would have been created long ago to help the local economy. “The legislature must make a decision and move forward. Whoever the vendor is, we will work with them to provide the best plan for the state and most importantly for the community that surrounds Aqueduct.”

Sate Assemblywoman Audrey Pheffer shares some of the senator’s concerns. “His [Paterson’s] decision is what we’ve been waiting for.” Pheffer says that although the governor, the Assembly speaker and the senate president must agree on a choice, with a preference by the governor the three heads of state will have something concrete to talk about. “What this is really about,” said Pheffer, “is agreeing on a vendor and then working to make sure they are good neighbors to the community.

No matter where opinions weigh in on the decision, one thing is for sure — every day of delay costs the state a tremendous amount of revenue. With the governor’s promised deadline within days, those who have been involved in the process hope the end is in sight.

“After a decision is made,” said Addabbo, “The winning bidder will have up to 90 days before an actual payment to the state is made.” That amount of time says the senator is dangerously close to the end of this fiscal year. “We included the $200 million dollar upfront payment from the winner in the state’s deficit reduction plan we passed in December. We need that money before the end of this fiscal year.”

Concerns at NYRA continue to grow and the agency warned last month they may not have the capital to run the Belmont Stakes in the spring if they do not start receiving revenue from the VLTs. New York State Comptroller Tom DiNapoli has since launched an audit of NYRA whom official say they hope will comply.

Capital, Credentials and Creativity: Is Steve Wynn the Right Choice for Aqueduct?

By Patricia Adams

Kleenex. Tissues.
Clorox. Bleach.
Q-Tip. Cotton swab.
Bic. Ball point pen.
Hoover. Vacuum.
Jell-O. Gelatin.
Steve Wynn. Fun.

Many industries have seen tried and true products adapted as generic trademarks. The human example of the aforementioned bunch being Steve Wynn, an internationally recognized casino/resort/real estate developer, who likes to dress fun up and invite everyone in.

The billionaire gaming guru is often credited with orchestrating the dramatic comeback and expansion of the strip in Vegas during the 90’s. His companies are responsible for building or re-building some of the most widely recognized resorts in the world: The Golden Nugget, The Mirage, Treasure Island, Bellagio, Wynn and Encore.

Having established successful gaming and entertainment venues from Las Vegas to Macau, many community residents are questioning just how Steve Wynn, whom they see as synonymous with Las Vegas, will fit into the landscape of Ozone Park. After all, say local critics of the Wynn Project, the proposal totally strays from the character of the neighborhood; it simply is too grand.

Representatives from team Wynn recant the notion of such thoughts immediately. “It’s the philosophy of Steve Wynn that we should not underestimate what people want,” said Tom Breitling, senior vice-president of strategy & development Wynn/Encore. “Inherently people have good taste and they want to have fun. Our business is showing them a great time.”

And while we’re visiting the subject of fun on the local front, part of the Wynn plan is to make an investment that focuses on the glory days of old—when thoroughbred racing was a sport as rich as the colors of the jockey silks. Silks that will be represented by a line of colored flags along the facade of the Wynn design for Aqueduct. “We’re hoping to re-create the former excitement of racing; bring new, big stake races back to New York, to Aqueduct,” said Breitling.

But the focus on the racing component is just one part of Wynn’s concept for Aqueduct. Among the top four contenders for the bid, Wynn is the only one that will tackle the project with all new construction at the site. “The existing clubhouse is simply not conducive to comfort for patrons,” according to Kim Sinatra, senior vice president and general counsel for Wynn Resorts.

The existing structure of Aqueduct cannot adapt to more than one of the buzzwords in the Wynn plan. Convenience. Flow. Comfort. Their idea is to compartmentalize the gaming floor so that customers can feel totally comfortable and relaxed in more intimate surroundings. Signature Wynn is their attention to detail. “We look at it from A-Z,” said Breitling, “it’s the 1,000 little things that people most appreciate and look forward to.”

The project design will find guests able to enter through numerous points, either directly from a 2,500 parking garage, or from entrances for those travelling by train or bus. Once inside, patrons will be met with a floor plan that has continuous flow designed to maximize the experience. Another feature touted by Wynn Resorts is a staff to customer ratio that is the highest in the industry. Visitors can enjoy a race book room, a famous Wynn Buffet, and host of other eateries and retail outlets all while being catered to by a staff hired by a very serious Human Resource department. In fact according to statistics, getting a job with Wynn is much more like planning a career—this is a company where desk clerks and black jack dealers can work there way into high-level positions.

But perhaps the most integral part of the structure of the Wynn plan has more to do with brass tacks than aesthetics and fun. Wynn Resorts is prepared to deliver funds promised to the state immediately upon being chosen. One-hundred million at the announcement of the bid, followed by one-hundred million upon closing and another one-hundred million over the life of the 30 year contract with the state. Wynn Resorts will provide more than 6,000 jobs as a result of the project, hiring and training local residents as part of the employment program.

The money factor in this equation is one which state and local officials are considering very carefully. As a result of a failed bid by former and current bidder, Delaware North, the microscope of finance is over the heads of all bidders.

It appears that Wynn’s $300 million bid is the highest among the lead competitors, Aqueduct Entertainment Group, SL Green and Delaware North, the group who has returned in this round of bidding. A central concern to officials is whether or not the bidders can deliver the funds promised. Weighing the evidence says Wynn absolutely has the money, which is not contingent on future happenings. If chosen they have committed to the guaranteed sum of $300 million for New York State.

For the people of south Queens most directly impacted by the winning bidders, there are many factors to consider. And when they look beyond the glitz and glamour of that which is Wynn, perhaps they will also note the company’s foundation --clearly rooted in financial strength, industry experience and customer focus.

For the elected officials who will contribute to the decision of choosing the winning bidder, the onus is upon them to deliver the candidate who can absolutely guarantee the money promised the state without exception.

In summing up Wynn Resorts as the best partner for the community and for the state, Tom Breitling offered his explanation. With regard to the man who would re-define the current conception of a racino, Breitling says simply and with a smile, "With Mr. Wynn, there is a certainty of execution." In other words, with Steve Wynn behind the curtain, the show will go on.

This concludes The Forum series on the companies involved in the bidding process. A decision is expected to be made in the very near future with a possible announcement coming from Governor David Paterson on Labor Day from Saratoga Race Track.

Above: Steve Wynn at the entrance of the atrium at Encore Las Vegas. (Photo courtesy of Wynn Resorts.)

Aqueduct Bidder AEG May be Community Favorite

By Patricia Adams

As the state closes in on awarding the contracts for the construction and management of the proposed racino at Aqueduct Racetrack, bidders have been presenting their formal plans to the Albany powers that be. The Aqueduct Entertainment Group, LLC (AEG) has, according to some close to the bidding process, emerged as a lead contender for the coveted project.

Comprised of several partners, AEG was formed for the express purpose of bidding on, winning and building a world class gaming and entertainment destination. Included in the group are GreenStar Services Corporation, for development, construction and overall coordination; the Navegante Group, as the gaming developer and operator; the Darman Group, Inc. and Empowerment Development Corporation, as co-developers and minority and women-owned business coordinators; Siemens, as technology partner; PS&S, to lead the architectural, engineering and environmental effort; and CleanPower, an environmental firm, who will employ Green Building Strategies. Levine Builders will provide construction management services.

The company will be chaired by Richard Mays, a former Arkansas Supreme Court Justice and nationally known attorney. “The collective experience of our team and the offer that we have presented the State of New York, is one that we believe that no other bidder can top,” said Richard Mays.

Larry Roman who serves as Vice Chairman of Greenstar Services Corporation explained some of the projects details. “Our vision is to build a complex modeled after seven communities in New York. We’re going to build New York City, not “Sin” city.” Roman clearly stated, that while he has the utmost respect for other companies involved in the bid, it is AEG that has the local New York community the most to offer.

Citing the fact that his group has already secured all of their subcontractors, something other bidders haven’t even approached, Roman went on to say, “We are totally prepared for this project. We’re turning into the stretch while our competitors have not even gotten out of the gate.” Five Star Electric located in Ozone Park will serve as the electrical sub contractor. The local shop has access to more than 1,200 union electricians.

If AEG holds up to their promises, it may very well be that they are the group best suited to help the state rebound from the projected revenue lost in a collapsed deal with last round bid recipient Delaware North, back in March of this year.

Community leaders and residents agree that one attractive aspect of the AEG deal is the deadlines they say they’ll conform to upon getting the bid. Andrew Frank, the Managing New York partner for Kreab Gavin Anderson, the overall coordinator for AEG, explained its commitment to a timeline. “If this bid is awarded by mid September, AEG will have 1,200 machines up and running by April 1, 2010 and another 2000 machines by June 15th , at which point the second floor will be complete.” When all else is said and done the group say they will be in a position to provide revenue to the state by the upcoming April.

The construction partners in AEG have a track record for timely completion. According to those at the heart of this decision process, reliability and expeditious construction are extremely important. “We can’t afford another bad deal,” said Senator Joe Addabbo. “We’re really looking hard.” Addabbo did not say who his choice would be but he was definitive about one of the bidders. “Right now we are looking for the best developer. I don’t know yet who that is until we see everything. But what I do know is that we do not want Deleware North.”

State Assemblywoman Audrey Pheffer expressed her concerns over hundreds of millions of dollars the state has lost since the last bid failed and says that she and fellow legislators will scrutinize all bidders to make sure the community is protected. “Each bidder has a different plan for the VLT’s and for Aqueduct,” Pheffer said, adding, “now we’re making sure they can live up to their claims.”

The proposed Casino and Raceway plan from the Aqueduct Entertainment Group would feature a LEED Certified Sustainable Casino and Racetrack with 4,500 VLT’s in seven different “neighborhoods.” The project will also host quality retail shops and restaurants set among the theme of the seven different neighborhoods. One such themed neighborhood incorporated into the design plan is a section modeled after of the Lower East side of New York and will feature a famed Kosher Deli.

In addition the AEG plan includes the Aqueduct Racing Museum and community meeting space. Those who use public transportation will find an enclosed, elevated walkway from the subway station and a bus drop-off. A parking garage will house 2,400 cars. To finish off their proposal, AEG will build a 300-room destination hotel, a banquet and conference center and a 2,500-seat entertainment center.

Aqueduct Bids Move Forward; Senate Will Not Hamper Project

By Patricia Adams

In mid-April, Governor David Paterson, Senate Majority Leader Malcolm A. Smith and Assembly Speaker Sheldon Silver announced the reopening of a solicitation for proposals by interested entities seeking to be selected to build and operate the planned Video Lottery Terminal (VLT) facility at Aqueduct Racetrack in Queens.

The decision to reopen the bidding was a result of a collapsed deal with Delaware North Companies. Delaware had been selected by the State in October 2008 as the winning bidder and most observers felt Delaware's selection was predicated upon the company's proposed large “up front” payment which was due to the State at the end of March. Subsequently, Delaware was unable to come up with the money and the deal with the State fell apart.

The reopening of the bidding process required proposals to be submitted to the State by May 8th. Seven entities entered bids for the upcoming selection process. Below is a profile of the contenders for the bid which will be decided by August 1st. Governor Paterson has also announced that the facility must be fully operational by October 2011.

Aqueduct Entertainment Group, LLC is headed by Richard Mays, Sr. and proposes construction of three levels of gaming, a new parking structure, and a hotel. Its gaming partner is the Navegante Group which has developed casinos and gaming projects throughout the world. The company has a website which displays some renderings regarding the proposal at aqueductentertainment.com.

Aqueduct Gaming, LLC is Delaware North and its gaming partner, Saratoga Racing and Gaming. Its plan calls for construction of a VLT gaming facility with ancillary space for restaurants and the like and a parking garage.

Development Associates, LLC, a subsidiary of Wynn Resorts led by Steve Wynn, proposes to construct the VLT facility along with a new entrance lobby and related amenities and a parking facility.

Peebles Corporation & MGM Mirage is headed by Florida real estate developer R. Donahue Peebles who was involved in the prior Delaware North project. Both Peebles and Delaware have confirmed he is not affiliated with the current Delaware proposal. Peebles also has a website where additional information is available at www.TheAqueductCasino.com.

Penn National Gaming, Inc. operates casino properties in Pennsylvania and also operates racetracks and associated OTB facilities. SL Green Realty Corp. in partnership with Hard Rock International is proposing a VLT facility, parking facility and new entrance lobby. Further phases of development could include a hotel, retail, and entertainment uses.

The seventh proposal was from Mohegan Sun but was essentially an offer to operate a VLT facility if the State constructed it.

Further information was due to the State last week from the entities seeking the franchise to be the State's VLT developer at Aqueduct. At this point it is unknown whether all did so.

As with the prior selection of Delaware North, the decision is in the hands of Albany's “three men in a room”: the Governor, the Assembly Speaker, and the Senate President Pro Tem. Some fear that recent events occurring in the State Senate's leadership may impact on the decision-making process now underway, although bidders in the process do not seem to think that they will be affected.

A spokesperson for the Peebles group told The Forum, “We have no indication from the state that there will be any change in the time frame established. We are moving ahead exactly as planned.”

Marissa Shorenstein, a spokesperson for the governor, said there are no expected delays because of the unrest in the state Senate.

Another bidder, SL Green is also proceeding with their plans to capture the bid in August. Executive Vice President Edward Piccinich explained his company’s thought on the pending deal.

"We realize that a project such as this has to be completed in as seamless and functional way as possible. For nearly two years, we've been working closely with NYRA, the local Queens community, and the state in refining our development proposal for Aqueduct, in order to ensure that we meet this goal. When completed, the SL Green / Hard Rock plan will create an entertainment destination for New York state, city, and the local community."

The winning bidder will pay the full amount of their proposed upfront franchise fee no later than ten business days following the execution of the Memorandum of Understanding(MOU) with the State.

Personal income tax bonds will be issued by the state through the Empire State Development Corporation in the amount of $250 million to finance eligible VLT project costs. The net amount borrowed would then be advanced to the selected bidder to be used for project capital costs incurred in the construction of a VLT facility at Aqueduct.

The VLT facility will be constructed by the selected VLT Vendor, who will be responsible for its design and construction subject to the terms of the MOU and applicable laws and regulations. Neither ESDC nor the State will be responsible for construction or cost overruns.

The State will enter into an agreement with the winning bidder for a fixed period of 30 years, with a possible 10-year extension based on the attainment of reasonable benchmarks that ensure satisfactory performance.

NYRA Set to Auction 64 Ozone Park Lots

By Patricia Adams

Wednesday, June 10th will see 64 tax lots in the Centerville area, currently owned by the New York Racing Association, on the auction block. David R. Maltz & Co., Inc., Auctioneers/Real Estate Brokers will conduct the auction of the lots all of which are residentially zoned. The auction is scheduled to begin at 1:00 pm and will take place at Aqueduct Racetrack. Registration for the auction begins at 11:00 am.

The lots being offered by NYRA through the Maltz firm’s auction range in size and are being offered in assemblages from from 2,000 square feet to more than 75,000 square feet. Landlocked properties will not be offered individually.

According to the auctioneers, three scenarios will be utilized in the auction process. “In order to provide all investors, large or small, with the opportunity to buy property, the lots will be offered for sale in bulk, 22 assemblages and individually. The properties will be sold under whichever scenario realizes the highest or best offer.”

Some local residents whose properties abut NYRA-owned properties included in the auction have expressed interest in buying lots adjacent to theirs but are concerned that the offering of lots in assemblages may see them losing out on purchasing individual lots. Many local residents in the Centerville area had hoped that NYRA would engage in negotiated sales by offering lots first to adjacent property owners.

David R. Maltz & Co., Inc., is a full service auction company specializing in the timely sale of real estate with a reputation for doing so in a professional manner. The firm has conducted thousands of auctions on behalf of clients that, like NYRA, have been involved in actions before the United States Bankruptcy Courts. Substantial amounts of the funds to be generated by Wednesday’s auction will go towards paying down NYRA’s tax debt.

All properties will be sold free & clear of all monetary liens with closing required to occur within 45 days of the auction. A $7,500/lot deposit will be required in order to register to bid. For example, if there are 4 lots in an offering, a posting of a $30,000 deposit will be required. A $350,000 deposit will be required in order to bid on all 64 lots in bulk.

Within 48 hours following the auction the successful bidder must remit a total of 16%of the high bid at auction, a 10% deposit plus a 6% buyer's premium. All deposits are required to be in certified funds and made payable to "Certilman, Balin, Adler & Hyman LLP as Escrow Agent". All of the properties included in this auction will be sold on an “as is, where is” basis.

State Reopens Aqueduct Bidding Process

By Patricia Adams

Gov. David Paterson, along with Senate Majority Leader Malcolm Smith and Assembly Speaker Sheldon Silver, announced last week the re-opening of the solicitation process for the Video Lottery Terminal facility at Aqueduct racetrack. In the wake of the collapsed deal with Delaware North, officials are seeking developers in a new bidding process. Applications are due on Friday, May 8 by 5 p.m.

After defaulting on their $370 million deal, Delaware North President, William Bissett cited deteriorating credit and financial markets in the recession economy for the failed bid and maintains that his company will be back. “While we disagree with their conclusion that a re-bid is necessary,” said Bissett “we nonetheless remain interested in developing Aqueduct and look forward to continue work with the administration to achieve that goal.”

State Senator Joseph P. Addabbo, Jr. said: “I am more optimistic today about the future of Aqueduct and our surrounding communities now that the VLT solicitation process has begun. I intend to inform my residents and ensure their involvement in the process that pertains to protecting Aqueduct.”

Assemblywoman Audrey I. Pheffer said: “After countless delays and false starts, I am happy that VLT’s at Aqueduct are finally back on track. We will learn on May 8th, the companies that have a true and realistic plan for Aqueduct. I remain committed to ensuring that our community’s vision for the “new Aqueduct” becomes a reality.”

As with the original proposal, the selected operator will be chosen by a unanimous agreement between the Governor, Majority Leader of the State Senate and the Assembly Speaker. “Growing our economy through job creation and economic development projects such as the implementation of VLTs at Aqueduct will move our state toward the type of new economy New York needs to get back on track,” Senate Majority Leader Malcolm Smith said. “Though it is disappointing that the process has been slowed due to the struggling economy, I am confident that we can find a new partner to build Aqueduct into a gaming location that bolsters the local and state economy.”

Developers expected to bid in the second round will most likely match those from the first time around, and will probably include Delaware North, Capital Play and SL Green. According to a press release issued by the governor’s office the winning bidder would pay the full amount of their proposed up-front franchise fee no later than ten business days following the execution of the new Memorandum Of Understanding (MOU).

The State would issue personal income tax bonds through the Empire State Development Corporation in the amount of $250 million in order to finance eligible VLT project costs. The net amount borrowed would be advanced to the selected bidder to be used for project capital costs incurred in the construction of a VLT facility at Aqueduct. The VLT facility would be constructed by the VLT Vendor, which will be responsible for its design and construction subject to the terms of the MOU and applicable laws and regulations. Neither ESDC nor the State will be responsible for construction or cost overruns.

The State would enter into an agreement with the winning bidder for a fixed period of 30 years, with a possible 10-year extension based on the attainment of reasonable benchmarks that ensure satisfactory performance.

Vendors may propose modifications to this MOU as part of their bids. Their proposed changes will be considered by the Governor, Majority Leader, and Speaker in making their selection.

Along with Delaware North, Capital Play and SL Greene, are expected to enter bids in the new process. SL Green, thought to be the frontrunner in the last bid, this week filed a lawsuit against Delaware North. Lawyers for SL Green say that the Buffalo based firm teamed up with them in the first round to get inside information and essentially used trade secrets for their own purposes.

According to published reports, this lawsuit alleges Delaware North “agreed to non-competition, confidentiality, and exclusivity restrictions” when it joined with SL Green in 2006. Although Delaware North ultimately did not remain with the SL Green effort, the suit alleges that prior to Delaware North’s departure "SL Green gave DNC access to confidential and proprietary business information... " It goes on to allege that since at least October 2007, Delaware North improperly competed with SL Green for the video lottery terminal rights at Aqueduct.

As has been the case throughout the lengthy process to establish a racino at Aqueduct, rumors continue. Delaware North partnered with R. Donahue Peebles and his development company in their quest to win the bid last year. Among the current batch of rumors is one that indicates Peebles is exploring forming a new team to bid on the project now. If true, that has the potential to further muddy the waters as another similar lawsuit could loom depending on what the terms of Peebles’ partnering with Delaware North involved.

The Governor’s announcement of the reopening of bidding for the VLT rights at Aqueduct and the lawsuit are the latest developments in what has been a long process to redevelop the racetrack. “We thought the VLT development would finally get underway when Delaware North was selected back in October. It took years to get to that selection in a process that began in the early part of this decade.

Community Board 10 Chairperson Betty Braton said, “Although we preferred the proposals put forth by others, with Delaware’s selection in the fall we thought that finally all the delays were over, and we were willing to accept them despite our misgivings due to the State’s pressing financial situation. We’re concerned that apparently Delaware will be allowed to participate in this new bidding process. This time around, the Community Board’s opinion is simply: ‘not Delaware North’ – and we have expressed that to Senator Addabbo and Assemblywoman Pheffer.”