2009-08-28 / Top Stories

Companies Make Final Push On Aqueduct Racino

By Howard Schwach

In May, seven companies submitted bids to develop a casino and hotel complex at the Aqueduct horse racing track in nearby Howard Beach.

It's the second time that the contract to build an entertainment "racino" has been bid. An initial deal collapsed amid the recession and restricted credit markets.

Governor David Paterson set the deadline to bid again at May 8, and seven high-rollers submitted bids, including Delaware North, the company that won the previous bid, but dropped out when it could not meet its financial obligation to the state in the form of millions of dollars in front money. However, Delaware North has reportedly rescinded its current bid, as well.

And, once again, the vital decision on which development group will get the project will be made by three men: Governor David Paterson, Senate Majority Leader Pedro Espada and Assembly Speaker Sheldon Silver.

Morgan Hook, a spokesman for Paterson, said there is no deadline for picking the winning bid. Hook said all parties involved "expect to evaluate these proposals over the coming weeks."

Insiders, however, say that the decision will probably be made before Labor Day.

The bidders still in the race are:

• SL Green Realty Corp, that plans to build a "Hard Rock Café" and casino, including a 425-seat restaurant and food court.

• Mohegan Sun, that plans for a "younger" crowd, including entertainment venues for concerts and a hotel.

• Penn National Gaming, that plans to promote "responsible gaming," but its plans are sketchy.

• Development Associates, a subsidiary of Wynn Resorts Ltd., the firm of Las Vegas casino titan Steve Wynn, that plans a casino atmosphere that will rival his Las Vegas and Atlantic City properties.

• The Peebles Corporation promises a MGM Grand Casino, including a 350-room hotel and 4,500 video gaming terminals.

•Aqueduct entertainment Group, which promises a 300-room hotel, a 1,200-seat stadium and a 2,500-seat concert venue.

The facility will still have horse racing, which will be managed by the New York Racing Association, as well as 4,500 video lottery terminals (VLTs) and various shopping and entertainment facilities. The VLTs are basically video game machines that pay out money using a random number generator - roughly analogous to electronic scratch-off lottery tickets or video slot machines.

New York State will tax the proceeds at a rate of 70 percent. The state will kick in $250 million to the winner for construction costs.

The companies bidding for the facility have all promised to bring jobs and economic development to the area, while also generating hundreds of millions of dollars in revenue for the State.

While the racino, which will house several hundred video gambling terminals, as well as other amenities, depending on the proposal, will be miles away from Rockaway, many locals believe that it will impact Rockaway residents, especially in terms of traffic.

"We're really worried about what the racino will do to the traffic on Cross Bay Boulevard," said Community Board 14 District Manager Jonathan Gaska. "Many residents use that road to get to and from work and to shop. Any major tie-ups on Cross Bay would negatively impact Rockaway."

Gaska says his board will back the choice of Community Board 10, which has responsibility for that area.

"Last time around, the Governor asked the community board who it did not want to see get the project, and he gave it to the developer that they least wanted," Gaska said. "Something like that will probably happen again."'

Last week, some of the development teams seeking the project placed fullpage ads in Queens community newspapers.

Each of them promises to keep the community in the loop and to supply what the community wants in the facility.

The Aqueduct Development Group has brought a local political power broker, the Reverend Floyd Flake, on board. Flake is the pastor of the giant Allen AME Church in Jamaica.

When Flake was a congressman, State Senator Malcolm Smith, who is now the President of the Senate, was his aide.

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