Documents reveal how five bidders predict the value of Aqueduct VLTs
|By Casey Seiler, State editor
|ALBANY — Gov. David Paterson attempted to dispel some of the bad odor surrounding the recent selection of Aqueduct Entertainment Group as the winner in the Aqueduct VLT competition by releasing hundreds of pages of documents submitted by the final five bidders.
The document dump also includes correspondence with state officials and an analysis prepared by Public Financial Management, which was charged with weighing the pros and con of each offer.
Paterson and state Senate President Malcolm Smith have faced criticism for the selection of AEG, a consortium that includes the Rev. Floyd Flake, a Queens religious leader and business development figure, among its investors. A former congressman, Flake is one of Smith’s political mentors; following the naming of AEG as the winner, Flake met with Paterson to discuss issues including the 2010 elections.
The stakes are high for the state as well as the companies and politicians involved: New York is counting on an upfront payment of $300 million from AEG to help close a yawning budget gap.
Public Financial Management’s Sept. 16 analysis of six of the bids gives a sense of the criteria used by the leaders with approval power — Paterson and Smith, as well as Assembly Speaker Sheldon Silver — to weigh the various offers. (Smith has said that he recused himself from the selection process, handing his role off to Senate Democratic Conference Leader John Sampson.)
Of particular interest in the report are bidders’ varying projections of the proposed Aqueduct racino’s "win per day" (WPD) amount, or the average sum per machine generated from players each day.
The dollar amounts ranged from a conservative and "readily attainable" $240 from Penn National to $467 from SL Greene, a number the report found to be hard to attain and out of line with the take at similar facilities. The middle ground was occupied by Delaware North at $372, and $350 apiece from AEG and Peebles Development. (A consortium that included Las Vegas casino mogul Steve Wynn promised a WPD of $400; Wynn’s group subsequently pulled out of the running.)
On Tuesday, the governor’s press office said "some small items in the documents have been redacted upon request of the bidder if the information was determined to be proprietary." Also, private information such as Social Security numbers, tax returns or bank account information was not included.
AEG, however, got out ahead of Paterson’s release by putting out what it described as its complete and unredacted bid documents hours before the governor’s office posted the pages on its Web page.
The Division of Lottery is preparing its "pre-qualification reviews" of the bidders, as well as associated entities and individuals, in response to a subpoena from the U.S. Attorney’s office.
Paterson has ordered the release of that material — with similar redactions of personal information — after Lottery has handed the complete package off to federal investigators.
State Inspector General Joseph Fisch announced late last week that his office would open its own probe into the selection of AEG.