Squabbling Continues Over Aqueduct Casino

Getting a casino at Aqueduct could be delayed further by political in-fighting.

The governor of New York is firing back at a legislative leader raising red flags over the selection of Aqueduct Entertainment Group to run a new casino at Aqueduct racetrack.

A day after Assembly Speaker Sheldon Silver released a blunt letter about conditions AEG must meet to secure a final deal for the casino contract, Gov. David Paterson issued his own statement—reminding the world that Silver was one of the three votes needed, and gotten, by AEG to win the award.

Paterson said he along with Silver and Senate Democratic Conference Leader John Sampson each had “equal statutory authority, equal responsibility, and is equally accountable in this selection” of AEG.

The governor, who sources said originally favored a bid led by SL Green and Hard Rock Entertainment, last week sided with AEG—a consortium of gambling, construction and politically-connected interests—over the other four remaining bidders. In a radio interview Feb. 4, Paterson acknowledged he had a different choice in mind than AEG—he did not name the group—but could not get the required consensus from Silver and Sampson.

The Paterson administration is perplex why Silver came out with a statement a day ago re-asserting the four conditions he insisted upon—and which were put into the deal—if AEG was selected. They note Silver at any time could have killed the AEG bid by saying no.

The governor defended the selection. “AEG has both the financial viability and ability to pay the required upfront licensing fee,” he said in a statement, referring to a higher, $300-million payment AEG has agreed to make to the state by March 31—the close of the current fiscal year.

Paterson said AEG satisfied issues about its ability to get licensed to run the casino and that its financial offer for the state in the short- and long-term “put it near the top or at the top compared to other bidders.”

The governor said the group’s gaming operator, Navegante, a Las Vegas firm, is already an established casino operator, and that its casino plan “fits well within the very diverse and middle-class community” around the Queens track, and that its minority workforce hiring promises were another key reason for choosing AEG.

“All information about the bidders and their bids was presented to all involved parties as we weighed this selection,” Paterson said of details provided to Silver and Sampson. “After a lengthy evaluation process, I can only assume that the other leaders made their decision, as I did, because AEG offered the bid that received both unanimous support and is good for New York.”

Representatives of losing bidders say AEG was tapped because of its connections to Rev. Floyd Flake, an influential black Democrat from Queens who Paterson hopes will support his uphill run for election in what is shaping up to be a nasty primary fight against Attorney General Andrew Cuomo. Flake, AEG sources say, has about a one-half of 1% stake in the casino project.

The tit-for-tat between Paterson and Silver suggest the process still has a long way to go. The state and AEG now have to sign a memorandum of understanding with AEG, supposedly before March 31 so its promise of $300 million can be paid before the fiscal year ends. Plenty of people involved in the process believe—or hope, in the case of some losing bidders—that AEG will be unable to meet the new terms demanded upon them by Silver, such as strict environmental oversight, no changes to the terms of its deal and a clean criminal background check for anyone involved in its team.

But Paterson has said AEG officials have assured the state that it can meet all of Silver’s new conditions, including the $300 million payment.