01/29/2010 12:00AM

Aqueduct casino operator named


Government leaders including Gov. David Paterson have selected a wide-ranging partnership that calls itself Aqueduct Entertainment Group to operate a slot-machine casino at Aqueduct racetrack in Ozone Park, N.Y., according to a statement released by Paterson late on Friday.

The selection of Aqueduct Entertainment Group could end a drawn-out selection process that has proceeded in fits and starts over the past several years because of economic and political considerations. The casino was first legalized for Aqueduct late in 2001, and though Delaware North, a casino operator, was selected late in 2008 to operate the casino, the deal fell apart early in 2009 after the company could not make good on promises it had made with the state in its operating agreement.

Aqueduct Entertainment Group includes the Navegante Group, a casino developer headed by Larry J. Woolf, the former chief executive of MGM Grand Hotels; GreenStar Services Corporation, a New York-based construction company; Turner Construction Company, also based in New York; Levine Builders, a New York construction company; the Darman Group, a construction consulting company that bills itself as a "wholly minority-owned firm"; PS&S Design, a construction consulting company; Siemens, the electrical engineering company; and Clairvest Group, a Canadian merchant bank.

Morgan Hook, a spokesperson for Paterson, said the governor's office hopes to hammer out a contract in the next 30 days with AEG covering the obligations for the operation of the casino. After that, construction on the casino could begin, Hook said.

On its website, AEG contends that it can have a casino up and running at Aqueduct "within six months" of executing the operating contract, which is also called a memorandum of understanding. The casino has been authorized for 4,500 slot machines, and many gambling analysts expect the facility to be one of the highest-grossing casinos on the East Coast because of its location in the New York metropolitan area and local subway service.

The racing industry has been impatiently waiting for the selection of the casino because of the promise of receiving tens of millions of dollars in subsidies annually from slot-machine revenue. Under state law, NYRA will receive 7 percent of the gross gambling revenues from the casino, with 4 percent earmarked for capital improvements and 3 percent for its operations. Horsemen will receive 6.5 percent, at least initially. Both percentages grow marginally over time.

NYRA has recently said that the association will run out of money this summer if the company does not receive an infusion of cash from the state legislature. The association had included estimated revenues from the casino in its 2010 budget, and officials have said the state promised to keep NYRA afloat if it ran into cash problems after March 1, 2009, and the casino was not yet up and running. It was not clear late on Friday whether the deal with Aqueduct Entertainment Group envisions any upfront payments to NYRA.

Aqueduct Entertainment Group did not immediately respond to requests for comment.

The company said on its website that it had promised the state a $200 million upfront payment, payable on March 31. The casino would be located in Aqueduct's grandstand. In addition, the company plans to build a 2,500-seat "entertainment venue" on the property and a 300-room hotel, according to plans on the website.

Aqueduct is currently conducting a live race meet that ends on April 25. After that, racing moves to Belmont Park on Long Island before shifting to Saratoga Race Course for late summer and then back to Belmont until late fall, leaving ample time for construction on the track's grounds near JFK airport.