After years of false starts, state officials in New York have given final approval to Delaware North to build and operate a casino at Aqueduct Racetrack — making it the only legal casino in New York City.
Delaware North, which is headquartered in Buffalo and owns Finger Lakes Racetrack, won the rights after two weeks of partisan battles at the state Capitol. Gov. David Paterson and Assembly Speaker Sheldon Silver, both Democrats, recently settled on the company’s bid — and its offer of $370 million in up-front payments to the state. But Senate Republicans balked, saying the firm’s development plans were not ambitious enough to make Aqueduct into a destination resort.
Senate officials tonight announced they are now embracing the company’s bid, after a Queens Republican who represents the track, Sen. Serphin Maltese, said he is endorsing its plans. Maltese is in a close re-election battle, and the casino became a political football between Democrats and Republicans in both Queens and Buffalo.
The casino will feature 4,500 video lottery terminals. Delaware North recently indicated it is also interested in building other amenities on the site, including a hotel. The casino contract is for 25 years, and officials say the facility could be open within about 15 months.
The casino will bring the state upwards of $1 million a day in VLT revenues. Estimates vary, but the New York Racing Association, purses and Thoroughbred breeding programs will also share potentially tens of millions of dollars a year in the VLT revenues.
Delaware North beat out two other bidding teams: New York City developer SL Green and its partners, led by Hard Rock Entertainment, which offered the state $250 million in up-front payments, and Capital Play, whose partners include Mohegan Sun casino, which put $100 million on the table. Delaware North’s competitors had said they would generate far more money in the long run than Delaware North’s plan.
Delaware North already runs racetrack casinos in three states, including three facilities in New York: at its Finger Lakes facility and at harness tracks in Saratoga Springs and outside Buffalo. The new deal positions the Buffalo firm as a major player in the nation’s racetrack casino industry.
The casino at Aqueduct will cost more than $250 million to build.
Democrats had accused Republicans of using the Aqueduct issue for political gain. For Maltese, the delay let him be the one announcing that the Senate would be backing a plan that offers to bring 1,200 jobs to Queens.
"Delaware North responded to the concerns voice by Queens community residents and has provided more detailed information and a commitment to develop the area surrounding the track to ensure that Aqueduct becomes a destination venue with quality retail, business, hotel, conference and entertainment facilities," Maltese said in a statement. "With this commitment in hand, the Senate will agree to the selection of Delaware North so this important project can go forward."
Racetrack VLT casinos were approved in the weeks after the 2001 terrorist attacks by state officials who saw them as cash cows for the state budget. All of the other approved facilities have been built. The Aqueduct facility, however, became bogged down in a series of legal and financial troubles that hit its operator, the New York Racing Association, as well as partisan fights and gubernatorial turnover in Albany.
A couple weeks ago, Skelos said that Delaware North’s plan "does not include an economic development proposal that would be a greater benefit in the long run." Skelos met with company officials and urged them to work with officials in Queens to resolve any questions.
While Delaware North indicated a willingness to build additional projects at Aqueduct, it was also quick to caution that it was not amending its original bid. To do so publicly, anyway, would invite possible litigation by the other bidders who could say the terms of the contract were changed after the bidding process ended. The company did, however, in recent weeks bring on a Florida real estate development company to partner with it in possible future ventures at the track.
Though it will feature only VLTs, the Aqueduct casino is expected to capture some of the gambling business that now heads from the New York City metropolitan area to casinos in Atlantic City and Connecticut.
NYRA’s other two tracks — Saratoga and Belmont — are not permitted to have casinos. But Skelos, who represents a district on Long Island near Belmont, is pushing to get authority to bring a casino to that track.
Delaware North officials could not immediately be reached for comment.
