6 Groups Finish Aqueduct Casino Presentations
by Tom Precious
Date Posted: 7/31/2009 3:57:05 PM
Last Updated: 8/2/2009 2:12:37 PM

Six bidding groups vying to run a lucrative casino at Aqueduct racetrack have wrapped up their face-to-face presentations with senior aides to New York Gov. David Paterson and legislative leaders.

“Six great companies are vying for this,’’ said Larry J. Woolf, a longtime casino executive and founder of Navegante Group, a Las Vegas-based company that has teamed up with several construction, development, engineering and financial entities.

“Our offer, I believe, is so compelling and detailed that if this decision is made on the merits then I believe we will certainly win,’’ countered Marc Holliday, chief executive officer of SL Green, a major Manhattan real estate development company whose partners in the Aqueduct project include Hard Rock Entertainment.

Both groups presented their bids to state officials July 31, following appearances at the state Capitol earlier this week by others, including Las Vegas casino mogul Steve Wynn, MGM Mirage, Penn National Gaming, and Delaware North.

The Navegante-led bid includes $151 million in cash payments to the state -- $101 million upon the signing of the deal and another $50 million when the VLT casino is complete, said Woolf, whose career has included head of MGM Grand Hotels in Las Vegas.

The bidding group is estimating it can, if the deal is awarded soon, complete enough work by April 1 to get 1,200 VLT devices running, with the remaining 3,330 slots operating within 12 months of the signing of the contract with the state, according to John Thomann, vice president of Turner Construction Co., which would build the facility, along with a parking garage, a hotel, restaurants and retail space.

Navegante is part of the bidding entity Aqueduct Entertainment Group, whose other partners include GreenStar Services Corp., a New York contractor; Turner Construction, whose high-profile projects include the new Yankee Stadium; and The Darman Group, a consulting and real estate company working in a joint venture with Empowerment Development Corp., which was created by Rev. Floyd Flake, a former congressman and political mentor to Senate President Malcolm Smith, who must sign off on the Aqueduct contract.

“The timetable is important to all of us because it produces cash,’’ Woolf said. Besides the upfront payment, the group believes it can deliver $225 million more in payments to the state next year than the $145 million it is estimating because its quick timetable for opening the facility will lead to faster payments to the state, along with horsemen and breeders in the form of revenue-sharing.

The money for Albany will be a lure; Gov. David Paterson on July 30 said the state is facing a $2.1-billion deficit in its current fiscal year, which only began on April 1. Paterson is intent on not repeating what happened late last year when Delaware North, which previously had won the Aqueduct contract, could not raise the $370 million it had promised in an upfront payment. Delaware North is again bidding, though it has offered less than one-third of that amount in an up-front payment, sources said.

“The people who write the checks were in the room,’’ Woolf said of the financiers of his group who attended the meeting with state officials at the Capitol.

“If we are selected, funding of the project is not a consideration,’’ added Holliday, who joined his bidding group’s session with state officials. He noted his real estate firm has over $700 million of “liquid cash’’ on hand and Hard Rock’s assets are valued at over $4 billion. “I don’t think there’s any other bidder who, in the aggregate, has the financial capacity our team brings to the table,’’ he added.

The SL Green/Hard Rock bid includes $250 million for the state, $100 million of which is guaranteed up front. The remainder comes over the next 10 years if certain benchmarks are met.

In addition, Holliday estimated the Hard Rock brand name will bring out more customers to Aqueduct to generate $4 billion in additional revenues – with 70% of that going to the state and racing interests, such as purses -- over the next 30 years compared to a non-brand name casino.

Beyond claiming more than adequate financing and no financial ties to any competition in neighboring Connecticut, New Jersey, and Pennsylvania, both the SL Green and Navegante bidders insist their competing bids will lead to the fastest construction of the facility and be the most in keeping with the desires of the Queens neighborhood.

Navegante said its bid also envisions 275 slots placed outside the casino in and around the track facility, along with flat-screen televisions inside the casino broadcasting Aqueduct races, to better incorporate the casino with the track.

“We are committed to working out an integrated approach with the track,’’ Woolf said.

 



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