Court documents filed by SL Green and its wholly-owned subsidiary, Aqueduct Development Partners LLC allege that DNC engaged in "unlawful conduct in misappropriating for its own benefit the rights to operate wagering and other facilities." The complaint goes on to say SL Green now seeks to "recover its damages, as well as the damages inflicted on its former affiliate Empire Racing Associates, LLC caused by DNC's unlawful scheme."
A spokesperson for SL Green says in a statement that "Delaware North's actions as outlined in the complaint, damaged SL Green and Empire Racing Associates shareholders significantly." The same statement adds "they also harmed the people of New York, given the VLT's at Aqueduct otherwise could have been up and running by now and would be delivering revenue to the state at a time the state sorely needs it."
Reacting to the news, Delaware North president William J. Bisset says in his own statement that DNC was made aware of the litigation yesterday, but as of today, had not been officially served papers. He added that "based on what we have read in the press reports, it appears to be a desperate attempt by SL Green to try to enhance their standing in the re-bid process."
For its part, SL Green says that yes, it is in fact still interested in developing the project and is now reviewing the state's instructions released last week in anticipation of the new proposal
"We are in the best position to move forward with the project right away, especially given that we already have been fully vetted," says SL Green in a statement. "If given the go-ahead, we could be producing revenue for New York's taxpayers within six months."
But like real estate deja-vu, SL Green will once again be bidding against Delaware North for the deal in Queens. "Our sole focus is on the re-bid process and ensuring that we put forward the best possible proposal to the State," says DNC's Bisset in a statement. He adds that the re-bid process allows all bidders 'opportunity to address the changing economic climate.'
SL Green's legal action extends back to the original bidding process that took place in the days before the October 28, 2008 selection of DNC to operate the video lottery terminals at Aqueduct Racetrack. According to an October statement from New York State Governor Patterson's office announcing the Delaware North choice, each day without a deal at the track was costing New York about $1 million in revenue. The statement stressed that "the deal will provide a critical revenue stream."
Citing DNC's 'successful track record as a partner at Saratoga Gaming, Finger Lakes Gaming and Fairgrounds Gaming,' the New York state release went on to say that "Delaware North presented the strongest financial proposal with an upfront payment at $370 million."
But, on March 11--citing problems in lining up financing--the Buffalo-based Delaware North said it would miss the deadline on a $370 million upfront payment to the state which led to the scratching of the deal.
Delaware North now says that although it has been widely reported that it had withdrawn from the project, "nothing could be further from the truth." "Our issue was solely based on timing and changing conditions as we finalized the legal operating agreements. In fact, even with the changes, our proposal would have had the VLTs up and running faster than any other bidders," the same Delaware North statement says.Still yesterday, as GlobeSt.com reported, the state is once again seeking new proposals to build and operate the 328,000-square-foot video lottery terminal facility at Aqueduct Racetrack in Queens.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
