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Delaware North deal formally announced Company will pay $370 million upfront

Seven years after launching their bid to build and run a casino at the Aqueduct Racetrack in Queens, Delaware North Cos. executives finally got the chance to bask in their moment in the winner's circle Monday.

With Gov. David Paterson on hand to formally announce a deal that had been widely reported late last week, Delaware North executives called the Aqueduct project a "great shot in the arm for the company" that will bring about 50 new jobs to the Buffalo Niagara region.

"Today there is an end, and we're grateful for the opportunity," said William Bissett, the president of Delaware North Cos. Gaming and Entertainment.

The complex will be the only legal casino in New York City, and Delaware North executives believe the long-awaited project will become a major economic development project that can build on the estimated 10,000 visitors that the gaming complex is expected to attract.

The project will have its own subway stop, which will make it easily accessible for the millions of residents in the New York City area, Bissett said.

"This business is not recession-proof," Bissett said. But the vast New York City population base makes the Queens site a prime spot for gaming, and the only legal casino in the New York metro area.

"We've always viewed gaming as an opportunistic component of our business plan," Bissett said, noting that the company's major foray into New York City gaming does not signal a shift away from its far-flung foodservice and concessions operations.

"We're going to have a huge presence in New York City going forward," Bissett said.

While the company plans to oversee the New York City gaming operations from its Buffalo headquarters, Delaware North hasn't ruled out the possibility that it may need to open a downstate office to handle some of that work.

"We think we can run it all from here," he said. About 350 people now work at Delaware North's downtown headquarters in Fountain Plaza.

The ongoing financial crisis and the resulting credit crunch also won't
be a significant hurdle for the project, Bissett said. "If need be, we can finance this without the credit markets," he said.

Paterson said casino will generate nearly $31 billion for the state's education programs over the next 30 years, including $4.4 million for the Buffalo Public Schools and almost $12 million for Erie County schools during the first year.

The casino is expected to generate about $1 million a day in revenues to the state from a share in proceeds from the 4,500 slot machines it plans to operate at the race track. The project is expected to create more than 1,000 jobs construction jobs.

Delaware North will make $370 million in upfront payments for the exclusive casino deal. The company already operates racetrack casinos at Hamburg, Saratoga Springs and its own Finger Lakes Racetrack.

The first phase of the project calls for a 328,000-square-foot gambling facility, a 2,000-space parking garage and restaurants. Over the following five years, Delaware North expects to begin work on ancillary developments, including a hotel with as many as 500 rooms and 30,000 square feet of retail space.

The gaming facility is expected to take about 14 months to build. Asked how long it will take for the project to open, Paterson said, "I guarantee you it will take less than seven years."

The Aqueduct project also could be impacted by a proposal pushed by Paterson and state Senate leaders to install video slot machines at the Belmont race track, which is about a 10 minute ride away.

State Assembly Speaker Sheldon Silver on Monday said Monday he doesn't favor the Belmont proposal.

Building a video slot center at the historic track on Long Island would compete with Aqueduct's video slot machines, so revenue to the state and racing industry would simply be split, not increased, Silver said.

"I don't think it makes sense," the Democratic leader told The Associated Press at a groundbreaking ceremony at the University of Rochester.


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