New York Gov. David Paterson

New York Gov. David Paterson

AP Photo

NY Gov. Meets on Aqueduct Casino Project

Project has been delayed for years.

Gov. David Paterson and New York legislative leaders met behind closed doors Oct. 29 in Manhattan to try to resolve the selection of an operator for the long-stalled Aqueduct video lottery terminal casino project.

No announcement came immediately after the session broke up. The evening of Oct. 29, a source said no final deals were made in the meeting. The meeting, several government sources said, occurred just after Paterson and legislative leaders held a public session to discuss ways to resolve the state’s $3.2-billion deficit.

The governor has included in his deficit-reduction package $200 million he believes the state will at least receive from the winning bidder of the Aqueduct project before the state’s fiscal year ends March 31, 2010.

The talks came on the day of the eighth anniversary of the signing of legislation authorizing most New York racetracks to operate VLTs. The measure, in the month after the 2001 terrorist attacks, was seen as a way to bring the state’s faltering budget new cash sources.

Aqueduct has permission to operate 4,500 machines, but various political, legal and financial problems over the years kept a final operator from being selected to open the casino.

Handicapping the possible casino bidding winner at the state Capitol has been as furious as pari-mutuel wagering at Aqueduct itself. A month ago, the state appeared to narrow the list to two serious contenders – Las Vegas casino executive Steve Wynn and a group led by Manhattan developer SL Green. Delaware North, which won the casino rights last year but could not raise the $370 million it promised the state in upfront payments, was also in the top list.

But then state officials began looking again at Penn National Gaming Inc. and its top upfront offer of a $250-million franchise payment for the cash-starved state. PNGI won an agreement with a key labor group for certain work projects if it wins the bid.

Also back in the running has been Aqueduct Entertainment Group, whose partners include Navegante Group, Turner Construction, and an organization tied to Rev. Floyd Flake, a politically connected Queens Democrat.

On Oct. 29, word spread that state officials were raising concerns about Wynn’s bid after he lamented the casino industry’s financial woes in a conference call the day before with investors. Meanwhile, some of the governor’s advisors have been pushing the bid by SL Green, whose partners also include Hard Rock Entertainment, Tishman Construction, and companies tied to billionaire Black Entertainment Television founder Robert Johnson, while Paterson has shown some softness for the Aqueduct Entertainment Group offer.

The topic of the Aqueduct bid was not mentioned once in the public meeting with the three men who are driving the project’s fate: Paterson, Assembly Speaker Sheldon Silver, and Senate Democratic Conference Leader John Sampson. But immediately after the session broke up, the three men took to the governor’s suite at his mid-town Manhattan office to discuss finally resolving the selection process.

Sources said the Assembly had recently raised new questions about some of the bids, and wanted far more details than had previously been provided about individuals who may be connected in some financial ways to some of the bidders. One of the bidding groups said the information was due to the Assembly by today.

Some of the contenders have been waging an intense public relations campaign -- illustrating how close some of them believe the bidding process is coming down to at the end. In the latest offering, the SL Green group this week released a list of minority and women-owned businesses they claim are supporting its bid.