Paterson: Aqueduct VLT Operator Decision Near

Paterson: Aqueduct VLT Operator Decision Near
Photo: AP Photo
New York Gov. David Paterson

Frustrated by the delay in picking an Aqueduct casino operator, New York Gov. David Paterson said he is moving to publicly name his choice in hopes of putting pressure on legislative leaders to make a decision from the five remaining bidding groups.

The tactic is a variation of a 2008 move by Paterson when he joined with Assembly Speaker Sheldon Silver in naming Delaware North as the Aqueduct casino operator – a decision later rescinded when the Buffalo company failed to come up with a timely $370 million franchise fee payment to the state.

But with the state facing a potential $9 billion gap in the next year in its budget, the governor is looking for all forms of cash to help close the gap. The Aqueduct casino, first approved as a casino site in the fall of 2001, would be worth $1 million or so a day to the state in revenue sharing payments.

“If the two leaders cannot come to a conclusion and a decision about which group should be the sponsoring organization then I think I’ll be forced, as I did last year, to announce my group and hope to persuade the two other leaders,’’ Paterson said in a brief New Year’s Day session with reporters at the governor’s mansion.

The Paterson administration originally told bidders to expect a decision in August. But Paterson, Silver and Senate Democratic Conference Leader John Sampson have been at odds over which operator would be best for the contract, which runs for the next three decades.

Paterson has not identified his first choice, though for months his negotiators have made clear in private meetings with legislators that the administration is leaning to a consortium led by SL Green, a real estate developer, and Hard Rock Entertainment.

Asked why he had not already put out his preference to prod the legislative leaders, Paterson said that he has “tried to respect’’ the process – which entails a unanimous, three-way decision between the governor and legislative leaders.

“But what I’m going to do in the next week or so is pick one myself and then try to publicly persuade them to embrace this decision,’’ he said.

Growing concerns have been voiced among some officials involved in the negotiations that the way the process has been run – numerous changes in the bid requirements followed by offers to let bidders amend their offers after all sides thought the process had been closed – will invite litigation from one or more entities that don’t win the contract.

While Paterson has been warm to the SL Green offer, sources involved in the talks say there have been concerns that the Seminole Indian tribe, which owns Hard Rock Entertainment, has been having battles over gambling operations with the state of Florida.

Much money is at stake. Besides the future revenue-sharing proceeds from the 4,500 VLTs that will go to the state, purses, a Throughbred breeding fund and the New York Racing Association, operators have also been asked to provide an upfront payment to the cash-starved state in the form of a franchise fee. Penn National Gaming has, at slightly more than $300 million, offered the largest upfront payment.

Paterson hedged a bit on how quickly he might make a decision. “I would think so,’’ he said when pressed whether he will make his choice for an operator known next week. The governor has a busy agenda next week: he delivers his annual State of the State message to the legislature, an important speech for a governor who many Democrats believe does not have the political capital to run for election this year, especially with Democratic Attorney General Andrew Cuomo sharpening the swords for a potential challenge to the Democratic governor.

Asked what the problem is with Aqueduct, given that both he and the legislative leaders are Democrats, Paterson said, “It’s not that they’re Democrats. It’s that they have different ideas about it.’’

Austin Shafran, a spokesman for the Senate Democrats, declined comment on the governor's latest threatened move.

“We have been waiting months for the governor to make a decision regarding Aqueduct,’’ said Dan Weiller, a spokesman for Silver, the Assembly leader. “And we’re pleased to hear that he’s close to making that decision.’’

 

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