By JAMES M. ODATO
ALBANY — Gov. Andrew Cuomo may be colliding with state laws
controlling competitive bidding with his plan to create a $4 billion convention
center in Queens.
A state board is charged with deciding the fate of
development at Aqueduct Race Track, not the governor, and only after an open competition.
The key players in the deal, including the governor’s
office, declined to answer questions Thursday about the legal requirements of
authorizing the project.
Yet in his State of the State speech, Cuomo announced
Wednesday that he had struck a deal with the Malaysian-based Genting Group in
which the gaming and resorts company agreed to build a 3.8 million square-foot
conference complex using $4 billion in private funds at Aqueduct Race Track.
The project would be next to the massive racino Genting won the rights to
build. The racino is doing better than anticipated business since it opened in
October. Even before it greeted its first customer, Genting had already begun
lobbying for the operation to become a full-fledged casino to increase its market.
The law creating the state board that keeps an eye on the
New York Racing Association, however, spells out a process for such expansion.
The Franchise Oversight Board, the law says, is responsible for representing
the interests of the state in "all real estate developments proposed for
"Any such real estate development shall only be
undertaken pursuant to a competitive process approved by the board, after
consultation with the applicable local advisory boards and consideration of
local zoning and planning regulation," the law continues.
None of that happened.
Asked about the issue, a spokesman for state Budget Director
Robert Megna, chairman of the oversight board, said he could not answer
questions raised by the law and the governor’s major economic development
announcement in Wednesday’s speech.
A Genting spokesman also would not discuss the matter, but
said the company holds a lease on 67 acres at Aqueduct and needs another parcel
of land controlled by the New York and New Jersey Port Authority to develop the
proposed convention center and hotel complex.
Cuomo spokesman Josh Vlasto said terms of the deal are still
under negotiation. He released the governor’s letter of commitment to Genting,
which describes the arrangement as "non-binding" and that terms are
being worked out with Empire State Development Corp.
"Negotiations are ongoing and the public will be
updated as we go along," Vlasto said.
Former state Sen. Michael Hoblock, who served on the state
Racing and Wagering Board until four years ago, said Cuomo’s deal
"obviously raises a lot of questions on the authority and action of the
oversight board in this process." While chairman of the racing board,
Hoblock, now working as a private attorney in East Greenbush, objected to NYRA
entering into a contract with MGM to build a racino at Aqueduct in a deal that
never was consummated.
Assembly Racing Committee Chairman Gary Pretlow, D-Mount
Vernon, added that Cuomo surprised him by naming Genting as a partner in a
convention center at the state-owned track without seeking requests for
proposal. "Generally you do that with an RFP," he said.
On Thursday Genting showed how far along it had come with
its intentions for the site, releasing artist renderings of its "New York
International Convention and Exhibition Center." It estimated 10,000
construction jobs and 10,000 permanent jobs associated with the center and
3,000 hotel rooms.
The local community board in Queens has not been given a
briefing on the plan and is unsure if the project can be supported, said Betty
Bratton, chairwoman of the Community Board 10. "Until I have a better
grasp and significantly more detail on what they intend to do I can’t answer
that," she said. "Right now we are proceeding with an open mind. It
could be an economic engine and we believe there should be appropriate
community input and review as we move forward."
Genting is pushing for changing laws in New York and Florida
to allow for casinos and is spending millions of dollars on lobbying. In a news
release on Thursday, the company said it would erect 2.6 million square feet of
convention center space by November 2014.
State officials say they expect the company to ask for a
reduction on the amount of video lottery terminal revenues it must give up to
the Division of Lottery. Don Reese, a spokesman for Las Vegas Sands, which competes
with Genting in Singapore, said he is aware Genting is paying a high rate to
the Division of Lottery.
Reese said his company weighs many things before spending
billions of dollars on an integrated resort with a convention center, including
the taxes or fees paid to the authorities to run gambling operations. He said
his company would need an assurance of being allowed to run a casino with table
games to make such an investment.