By FREDRIC U. DICKER and BRENDAN SCOTT
ALBANY — Capping a flawed selection process, Gov. Paterson yesterday picked a business consortium tied to friend and former Democratic Rep. Floyd Flake to build a slot-machine casino at the Aqueduct Racecourse in Queens.
But Assembly Speaker Sheldon Silver said he had attached four "conditions" to the decision to give the contract to Aqueduct Entertainment Group, or AEG.
Lobbyists for another bidder predicted the conditions would kill the agreement in a matter of weeks.
The decision, which has been in the works for several years — spanning the tenure of three governors — is designed to provide the cash-strapped state with as much as $300 million in immediate revenue and hundreds of millions of more in the years to come.
The bidding process has been widely slammed by critics who say it was tilted by Paterson toward his favored firm — AEG.
Recently, Las Vegas casino mogul Steve Wynn suddenly withdrew his bid after Paterson changed the rules in midstream and told bidders they would have to cough up $200 million for the state almost immediately if they were tapped for the project.
The Aqueduct "racino" is also meant to rejuvenate the economically struggling New York Racing Association, the financially hard-pressed horse race industry, and the tattered and decaying Aqueduct building itself.
Paterson and Senate Democratic Conference leader John Sampson (D-Brooklyn) agreed on the selection of the AEG over the past few days and, as a final step, Silver (D-Manhattan) gave his approval late yesterday.
But Silver, who was believed to have favored another of the bidders, insisted that four conditions be met, including a requirement that no investor associated with AEG could have a criminal record.
Assembly sources said that’s a "potential problem" for at least two smaller AEG investors, including Darryl Greene, an associate of Flake’s firm and onetime business partner with Senate President Malcolm Smith (D-Queens). Greene was convicted in 1999 of stealing $500,000 from city agencies and private firms that paid him for affirmative-action hiring services.
Flake was a congressman from Queens from 1987 to 1997 and remains pastor of an influential black church in the Jamaica section.
Paterson called AEG "the organization that best fulfills our selection criteria," and said the company has the "financial viability and ability to pay the required upfront licensing fee.
"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."
AEG’s partners include ex-MGM executive Larry Woolf, the Flake-connected Darmin Group, a minority-owned consulting firm, and several construction companies.