Posted on January 10, 2012 at 3:58 pm by Casey Seiler,
Capitol bureau chief
Less than a week after making it the top item on his 2012
to-do list, Gov. Andrew Cuomo has sent a letter to Senate Majority Leader Dean
Skelos and Assembly Speaker Sheldon Silver regarding his proposal to allow the
gaming giant Genting to build North America’s biggest convention center complex
at Aqueduct with $4 billion or more of its own money.
The nut of Cuomo’s
” … Any transaction that the state makes with Genting or any
modifications to the current state agreement will be submitted to the
legislature for full review and action before becoming binding. Given the past
history, while I may have the legal authority to proceed unilaterally, I choose
to only proceed in full public view and with support of the legislature in a
spirit of cooperation.”
In other words: This
train is leaving the station — it would be great to have you on it. Cuomo also
notes, however, that an expansion of the VLT facility at the site would need
legislative approval. He concludes the letter by hoping all parties can meet
with representatives of the gaming giant Genting in the weeks ahead.
Here’s the full
Dear Majority Leader
Skelos and Speaker Silver:
In my State of the
State message last week, I spoke about a comprehensive program to foster
economic development across the state. As the state’s resources are limited,
our task will be to leverage private sector activity without significant
funding from the state; no small challenge. Two projects I discussed were
development of a convention center complex at the Aqueduct site in Southeastern
Queens and the redevelopment of the Javits Center. As you will recall Genting
New York LLC was granted in September 2010, the only franchise in New York City
to operate a video lottery terminal (VLT) facility under a 30 year lease on 67
acres at Aqueduct. Genting has proceeded with the project, which from all
perspectives, has gone exceedingly well.
In the past selection
of gaming operators, race track issues, VLT designations have raised serious
ethical and legal issues for the state. To be sure, the state’s current gaming
arrangements are varied and controversial. I look forward to the opportunity to
bring a logic and strategy to gaming operations in the state over the next two
years through development of casino legislation and regulations.
In the interim, any
transaction that the state makes with Genting or any modifications to the
current state agreement will be submitted to the legislature for full review
and action before becoming binding. Given the past history, while I may have
the legal authority to proceed unilaterally, I choose to only proceed in full
public view and with support of the legislature in a spirit of cooperation.
Genting has proposed
further development of the site which includes the creation of a destination
location of international potential. The destination location will include
gaming, hotel rooms, entertainment, exhibition and convention center
facilities. The economic impact of the project would be enormous, estimated to
create thousands of construction and private sector jobs. The state investment
would be minimal with potentially the greatest number of jobs produced in the
state in many, many years. As you know, in each of the VLT racinos across the
state, the state has, through legislation, negotiated a revenue sharing
agreement and such an agreement would need to be negotiated here. Importantly,
the new agreement would be binding only upon the new VLT terminal revenue which
would be granted to the Aqueduct facility; while the terms and conditions of
our original agreement remain in place. Hence, there is only the possibility of
additional revenue for the state as our current revenue stream would be untouched.
While the discussions are preliminary and conceptual, at
this point the first phase would include construction of 1,000 hotel rooms,
theater and entertainment components, approximately 3 million square feet of
convention and exhibition space, expansion of VLT gaming space and a parking
facility. Importantly, Genting has the exclusive lease on all the land
anticipated to be used in phase one and is the only legislatively approved VLT
operator in New York City.
The second phase would require additional land beyond the 67
acres currently under lease to Genting. The Port Authority controls an
adjoining 22 acres which Genting is considering for an additional 2,000 hotel
rooms and approximately a half million more square feet of convention and
Genting is prepared to work with the relevant labor unions
and execute a project labor agreement. They will also work with the local
communities and local governments on zoning, and meet or exceed all state MWBE
Transportation to the site is an issue that needs to be
addressed and we have been discussing the feasibility of MTA service from
Manhattan to Aqueduct, with Genting paying the cost of such service.
There is also an
issue as to how this racino expansion at Aqueduct would affect operations at
the nearby Belmont race track.
The Aqueduct project
is linked to the Javits Center redevelopment as the New York Metropolitan area
needs a convention site and if we do not plan to develop one as an alternative
to Javits, then Javits would need to continue to operate. As I stated in my
State of the State message, the Javits Convention Center is too small to be a
competitive exhibition facility, and redevelopment of the current Javits site
has exciting possibilities for the West Side of Manhattan and beyond. I also
believe the redevelopment of Javits will render significant economic benefit to
the State of New York which is essential during these challenging fiscal times.
I will also ask the legislature to consider passing language
authorizing a Constitutional Amendment to allow casino gaming in the State of
New York. That referendum would be at best two years from now – if ever – and
should be considered as a separate issue from these current proposals. We would
hope that the Aqueduct project could be finalized within one year on an
expedited time frame.
Opponents to the project point out that many conventions
centers lose money. That is a true point. Most governments weigh the issue of
building a convention center with public money as a “loss leader” for the net
economic gain of additional tourism dollars, etc. That is a debatable
proposition. However, that is not the case here. The state is not building
anything. We are not spending public money on a convention center. Genting, a
private entity, will take the risk of economic success. I have never been a
casino or racino proponent, but we are here now and the question is how to best
maximize the economics and protect our citizens.
As you know, we are
working aggressively to attract business investment to New York State. It would
be ironic to say the least if New York did not seize an opportunity of this
scale when presented with it.
The bottom line is
that this is a low risk, high reward business opportunity for the state. The
Genting organization already controls the land under phase one and already is
the only legislatively approved operator for VLTs in New York City. Our only
“cost” is noneconomic: the issuance of additional gaming machines at a
preexisting gaming facility. The reward is approximately 10,000 construction
jobs, 10,000 permanent jobs and $4 billion investment in the state. This
investment would be one of the largest in the state’s history at no cost to the
A new convention center also frees the Javits site for redevelopment.
I think the merits are clear.
I would appreciate
your respective staff’s attention to engage in these conversations on a joint
basis to see if they can be brought to fruition.
I also think it would
be advisable for us to meet together with Genting officials in the coming weeks
to discuss the proposal in person.
Governor Andrew M.