NEW YORK CITY-It looks like a one-horse race for the contract todevelop a video lottery casino at Aqueduct Racetrack in Queens,with the New York Lottery saying late Tuesday afternoon that it haddisqualified two of the three bids submitted on June 29. Thedisqualification of bids submitted by Penn National Gaming and aconsortium of SL Green Realty Corp., Hard Rock International andClairvest Group—both on grounds that the bidders attempted tonegotiate for more favorable terms than those allowed by theRFP—narrows the field to the US-based arm of Malaysian gamingcompany Genting.

|

If Genting’s proposal is not approved, the contract to develop a328,000-square-foot video lottery terminal facility at Aqueductwill be bid out for the sixth time in three years. Should thatoccur, however, neither SL Green nor Penn National would beeligible for reconsideration, the lottery says.

|

Both the SL Green-led consortium and Penn National submittedwhat an SL Green spokesman calls “a suggested list of amendments”along with their proposals. In the case of the SL Green group,these included the right to terminate the memorandum ofunderstanding if all conditions were not met by Dec. 31 of thisyear, compensation for any VLT facility granted “more favorable taxtreatment” within 50 miles of Aqueduct and the right to sublease aportion of the facility.

|

According to the lottery, Penn National would not agree toadvance funds to the New York Racing Association, as required bythe MOU, if construction of the Aqueduct casino were to be delayedby more than 30 days. Penn National also wanted to be able toterminate the Aqueduct racino license at any time the companydetermined that the casino was not profitable to it for fourconsecutive quarters, and to be able to change the MOU to protectits profits “in light of tax rates and other material factors,”according to the lottery.

|

“The SL Green/Hard Rock team was willing to move forward, butonly with terms that made economic sense,” SL Green’s spokesmantells GlobeSt.com. He adds that in attempting to rectify the issueswith previous RFPs for the project, “the state created some newproblems.” These were pointed out but not addressed, says thespokesman, and the detailed list of amendments to the MOU wereintended as a "good faith" move to correct the memorandum'spitfalls for would-be developers. Calls to a Penn Nationalspokesman were not returned by deadline.

|

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 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.