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Delaware North deal for casino collapses State Senate GOP adds yet another delay

Confusion reigned Friday as state officials thought they had a deal awarding Buffalo's Delaware North Cos. a contract to run a big, new casino at a downstate racetrack, only to see the agreement fall apart amid a partisan dispute.

Gov. David A. Paterson and Assembly Speaker Sheldon Silver signaled Friday that they favor Delaware North's getting the lucrative and long-delayed contract to build and operate a casino at Aqueduct racetrack in Queens.

But Senate Republican leaders late Friday afternoon put the brakes on a final deal, saying more needs to be done by the company before it signs off on an agreement. The move led to a pointed counter-charge by Paterson that the Senate leader is delaying an economic development project that also will help the state's finances.

The on-again, off-again maneuvering is just the latest in a long line of political, legal and financial delays that have blocked an operator from taking over the proposed sprawling casino that was first approved weeks after the 2001 terrorist attacks as a way to raise revenues for the state.

For Delaware North, it would mean hundreds of new jobs, including about 50 at its Buffalo headquarters, and a major addition to its growing gambling venture.

Paterson has been joined in his support for Delaware North by Assembly Speaker Sheldon Silver, a Manhattan Democrat, Assembly officials said. The casino calls for 4,500 slot-like machines, known as video lottery terminals, and would give Delaware North its fourth casino operation in the state.

In a statement Friday night, the Paterson administration said the Delaware North plan offered the best set of financial terms from a company experienced in running racetrack casinos and seeks a plan to expand development in Queens.

"This is the best deal for all New Yorkers," said Risa Heller, a Paterson spokeswoman.

"It is shocking that [Senate Majority Leader Dean] 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. Equally troubling is that he has refused to state what proposal he supports and why," Heller said. The selection of Delaware North, which officials had been preparing to announce Friday afternoon, was put on hold when the Republican-led Senate raised questions about its proposal. By law, Paterson, Silver and Skelos must all approve the casino operator for the project to go forward.

John McArdle, a spokesman for Skelos, said, "We have said that they're must be an economic development component for Aqueduct, which is what the community wants and what our intention was all along. And since there is no component, we cannot support the Delaware North bid as it was proposed."

McArdle said that Delaware North's two bidding competitors proposed more sweeping economic development efforts for the site, including hotel, entertainment and retail space. The Delaware North bid featured mainly just the casino, though with a future option to expand.

In a statement, Skelos said Delaware North's plan "does not include an economic development proposal that would be a greater benefit in the long run." He said the firm's recent addition of a Florida developer to its team, Donahue Peebles, has not yet been reviewed or vetted by the state or local groups in Queens.

"It appears that in an effort to close the budget deficit, Gov. 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. It is our belief that unless we make Aqueduct a true destination venue, this project will not generate the largest possible benefit," Skelos said.

If it gets the final deal, Delaware North -- which already runs casino operations at racetracks in Hamburg, Saratoga Springs and its own facility, Finger Lakes Racetrack -- would see its biggest, and potentially most lucrative, opportunity with the New York City facility. The casino is expected to draw bettors who now head to Atlantic City and Connecticut casinos.

While its overall development plans were far less ambitious in terms of amenities and other related projects at the track, Delaware North offered the most -- $370 million -- in the way of upfront payment to the state in return for the operating rights.

New York City developer SL Green and its partners, led by Hard Rock Entertainment, offered $250 million, while Capital Play, whose partners include Mohegan Sun casino, offered the state $100 million.

Delaware North's competitors had said they would generate far more money over the long term to the state than the Buffalo company and have offered plans to bring more vitality to the neighboring community.


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