09/27/2010 5:22PM

Aqueduct casino operator makes $380M payment

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A drawing shows Genting New York’s plans for facade improvements at Aqueduct.

The Aqueduct grandstand is about to get a $1.3 billion facelift.

On Friday, Genting New York, the Malaysian company that will build and operate a casino at Aqueduct, wired $380 million to the New York State Lottery, fulfilling a provision in its 30-year contract to operate the casino. Next up: getting the permits for the construction of a $350 million project to build a two-story casino out of the Aqueduct grandstand which also will include the construction of a new facade that will transform the aging racetrack’s appearance.

Completely rebuilt in the late 1950s at a cost of $35 million, Aqueduct was once considered state of the art, but over the years the grandstand has been neglected under the slow, steady slide of the sport’s popularity and the financial health of its operator, the New York Racing Association. Except for a few days each year, its cavernous interior spaces are largely empty, along with the thousands of seats that line the stretch.

While the casino is hardly expected to draw huge crowds back to racing, Genting has allocated $1.3 billion toward construction of the casino and accompanying projects at the track, including a new pedestrian walkway from the adjacent subway stop, three hotels, retail and restaurant spaces, and a 2,100-space parking garage on the far end of the grandstand, near the top of the stretch.

“We’re planning to make this an impressive entertainment destination for all of New York,” said Genting’s president, Michael Speller, during a press conference Monday at the lottery’s headquarters in Schenectady.

Speller reiterated that construction of the first phase of the project will begin once regulators complete a review to determine whether it is in compliance with the state Environmental Quality Review Act, a process that typically takes one to two months. Six months after construction begins, Genting will bring 1,600 of the project’s allotment of 4,500 slot machines online, with the full casino opening one year after the project is started.

Speller is a former president at Foxwoods Resort Casino in Connecticut; Genting’s parent company had provided the start-up financing for Foxwoods in the 1990s. That casino now operates the largest number of slot machines at any facility in the United States, at 7,200 machines.

Genting’s bid to build and operate the casino was approved by state lottery and legislative leaders in the past two months. The Aqueduct casino was first authorized by legislation in 2001, but political and financial considerations have delayed the construction of the casino since then.

In its bid, Genting said that Tutor Perini Corp. will build the casino, using an array of subcontractors. Tutor Perini has overseen the construction of Foxwoods, Mohegan Sun at Pocono Downs in Pennsylvania, and the casino at Saratoga Gaming and Raceway in Saratoga Springs. Tutor Perini also built the AirTrain terminal at adjacent JFK airport.

The lottery’s recommendation of Genting included statements that praised the company’s bid for “very detailed construction plans down to specific materials to be utilized.” However, the recommendation also said that Genting’s six-month timetable for opening the first phase of the casino “may be overly ambitious,” citing unexpected delays that frequently affect large construction projects.

The casino will have two main gaming floors, according to the bid. The first floor will be the main casino floor, while the second floor will comprise a private space for high rollers that overlooks Aqueduct’s winner’s circle, the company said. An outdoor terrace that can accommodate 10,000 people will eventually connect the upper floor of the casino to the racetrack grandstand, Genting said.

Initially, the company will focus almost entirely on getting the casino up and running, so many of the architectural flourishes, such as the remade facade and a gigantic fountain at the main entrance, will take more than 2 1/2 years to complete, Speller said. One of the aesthetic goals of the project, Speller said, is to draw attention to Aqueduct from international travelers at JFK, where final approach for one of the runways lies directly over the racetrack.