Friday's decision by Gov. David Paterson comes 11 months after an Aqueduct development deal with Delaware North Cos. collapsed. Known as the Aqueduct Entertainment Group, the winning consortium must complete a memorandum of understanding with the state before work on the 328,000-square-foot VLT facility can begin. Terms of the memorandum include an increase in the up-front licensing fee from $200 million to $300 million, according to a release from Assembly Speaker Sheldon Silver.
The earlier deal with Delaware North foundered on the casino operator's reported inability to come up with the up-front fee. In Paterson's view, the fee hike apparently won't be a problem for the newly selected racino developer. "AEG has both the financial viability and ability to pay the required upfront licensing fee," the governor says in a statement. "AEG complied with every request made during the review process and addressed satisfactorily all matters related to licensing ability. All of the groups have valid proposals, but AEG presented a comprehensive bid that enjoys community support and also offers strong marketing appeal."
The AEG consortium, which also includes locally-based GreenStar Services Corp. and Levine Builders, Las Vegas-based Navegante Group Inc. and Toronto-based Clairvest, edged out Penn National Gaming, a Delaware North-led consortium, R. Donahue Peebles/MGM Mirage and a partnership that included S.L. Green Realty Corp. "As we have said since day one, Aqueduct Entertainment Group has the best team to design, develop and operate the facility," Levine Builders founder Jeffrey Levine says in a statement. "We know we will be a great partner with the state and the residents of Queens for years to come."
S.L. Green issued a statement of its own, expressing disappointment with Paterson's decision. "We clearly have presented the state with the superior proposal backed by a team that is best equipped to deliver on its promises to the community and to New York's taxpayers," the company says, adding that the partnership stands ready "to re-engage state officials" should AEG fail to meet the conditions outlined by Silver.
Along with an increase in the licensing fee, Silver stipulates using the existing approved footprint for the racino as the basis for the project's State Environmental Quality Review Act approval. "Any future development would be subject to the normal SEQRA process," according to Silver's statement. "No waiver requests or requests for expedited approval will be permitted."
In addition, the memorandum requires a state lottery license for "all investors at any level, partners, directors, managers, contract holders and principal and other selected employees." The state Division of the Lottery also must sign off on any changes to the AEG proposal made during the course of the approval process.
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.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
