Senate leader slams VLT decision

Only one drum is still spinning and so far, it’s two cherries for Delaware North’s bid to operate Video Lottery Terminals (VLT) at Aqueduct Race Track in Ozone Park.
Governor David Paterson and Assembly Speaker Sheldon Silver have endorsed the Buffalo-based company’s bid to run the 4,500-machine VLT operation - but it looks like Senate Majority Leader Dean Skelos of Long Island is balking.
“It appears that in an effort to close the budget deficit, Governor Paterson has made a choice that may not be in the best long-term interests of the state or for the communities that surround Aqueduct,” Skelos said shortly after the announcement, on Friday, October 10.
The plan has been languishing since it was first authorized, during the economic aftershocks of the 9/11 attacks. Once final approval comes, construction is expected to take from 12 to 15 months.
Nevertheless, this year’s budget, which expires on March 31, includes some $250 million in VLT revenue.
“It is shocking that Senator Skelos, who claims to understand the importance of this revenue stream and who has repeatedly and publicly called on the governor to award this contract, has now decided to stall a significant economic development project,” Paterson spokeswoman Rita Heller fired back in a press statement.
“Delaware North presents the strongest financial proposal,” she said. The $2 billion-a-year, privately-held company offered the largest upfront payment in its bid - $370 million.
A group headed by SL Green and Hard Rock Entertainment offered $250 million, while partners Capital Play and Mohegan Sun offered $100 million.
Both of the latter bidders’ proposals included plans for large-scale entertainment and retail complexes; their bids also proposed such additions as a hotel and a convention center as part of their proposals.
“It is our belief that unless we make Aqueduct a true destination venue, this project will not generate the largest possible benefit.” Skelos said, declaring that much of his objection was over a lack of economic development planned around the track.
Delaware North President William Bissett said on Sunday, October 12, that the Delaware North proposal includes far more than just a casino.
“We’ve always viewed this project as one of staged development,” he said. The other developments would be undertaken once the casino succeeds, he promised.
Bissett suggested that nothing guaranteed the hotel, retail and entertainment space proposed by competitors would actually get built, and he questioned their 30-year revenue estimates.
Mitchell Grossinger Etess, CEO of Mohegan Sun, dismissed the doubts. “Mohegan Sun has a million member database that will allow for marketing from day one,” he said. “No one else can touch that. No one else can bring the jobs and money into the local community that we proposed,” he challenged.
The project, with a projected price tag of more than $250 million, could add as many as 50 executive jobs in Buffalo and 1,200 in Queens according to Bissett, who said it would be a “very large boost” to Delaware North’s gambling subsidiary.
The company runs VLT’s in Saratoga Spa State Park in Saratoga Springs, Finger Lakes Race Track, a thoroughbred venue near Rochester and a VLT operation and harness racing track at Buffalo Raceway.
“They have a proven successful track record in New York State,” said Sisa Moyo, a spokesperson for Silver. “The governor selected them and we’re comfortable with that decision,” she said.
Etess took exception to the raves for Delaware North.
“The fundamental difference between us is that (we) want to build a total destination location at Aqueduct from the beginning,” he said adding, “That’s what the community wants, but Delaware North wants to see how the casino does before they build anything more.”
Delaware North’s Buffalo VLT/track operation opened in March of 2004. According to figures, it earned $1 million in its first six days. Earnings reportedly dropped significantly afterwards, according to reports.
In late September, it was reported that the company is calling for a $23 million reconstruction of the VLT facility, yet reduce the number of machines from 940 to 883. The proposal is under legislative review.
The general consensus is that it will require unanimous consent of “the three men in the room,” the majority leaders of both houses of the Legislature and the Governor, to award the contract to operate VLT’s in the New York City venue.
“We support the governor’s choice,” Moyo said. “We understand there are some community concerns, and we will work with the governor to encourage all parties to work together to address the concerns.”