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.

Genting Gets Green Light for Aqueduct Redevelopment

By Eric Yun

Finally. After more twists and turns than a daytime soap opera, Aqueduct racetrack finally has a vendor to develop and operate video lottery terminals (VLT) at the facility. State Comptroller Thomas DiNapoli approved Genting New York’s proposal on Monday, paving the way for construction to begin at the Ozone Park facility.

“This is one of the most important vendor contracts New York has ever signed,” DiNapoli said in a statement. “The VLT contract involves hundreds of millions of dollars. It’s a 30-year license that carries the future of New York’s racing industry on its back.”

The contract will do much more than help the New York Racing Association (NYRA). Genting New York’s proposal calls for the creation of approximately 1,300 construction jobs and 800 permanent jobs. Furthermore, in a meeting with Community Board 10 in July, the company promised to spend over $30 million in local goods and services, and they plan to donate one percent of net profits to community groups.

Jobs were definitely on the community’s mind as the proposal was being discussed. “We look forward to working with Genting to bring much needed jobs to our community and ensuring the casino project is a successful one that enhances the whole com- munity” said Betty Braton, Chair of CB 10.

Genting New York is a subsidiary of Genting Berhad, one of the world’s largest resort and casino companies. They currently operate Asia’s largest casino in Malaysia. This will be Genting’s first foray in America, but their management and construction team has years of experience with Foxwoods Resort in Connecticut and the casino at Saratoga Springs.

Genting’s plans include approximately 4,500 slot machines, a 200-seat restaurant, a high-
end Chinese restaurant and other entertainment amenities. The proposal also included a $380 million upfront payment to the state. Once construction begins, Genting hopes to be able to open within six months and completely finish construction in 18 months.

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.”

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.