03/09/2010 12:00AM

Investor leaves Aqueduct casino group


Rev. Floyd Flake, a politically connected community leader from Queens, N.Y., has relinquished a 0.55 percent share in a sprawling partnership that was selected in February to operate a long-stalled casino at Aqueduct, according to a statement distributed by the group, Aqueduct Entertainment.

"I have a continuing obligation to my community and the various projects I created and developed," Flake said in the statement. "Unfortunately, my ongoing participation in Aqueduct Entertainment has become a distraction that has taken me and my attention away from the community projects I created and nurtured."

Flake is relinquishing his share in the group at a time when the state's inspector general is conducting a probe into the process by which the group was selected. The probe was requested by Rep. Sheldon Silver, the Speaker of the New York Assembly, who was one of three legislative leaders in the state to make the selection of AEG in February among five groups bidding for the contract.

The selection of the group has drawn fire from losing bidders and Republican politicians. Flake, whose endorsement is valuable to political candidates, was singled out for some of the criticism because he met privately with Gov. David Paterson three days after the selection. Earlier, Flake had endorsed the gubernatorial candidacy of Andrew Cuomo, the state's current attorney general.

Since that meeting, Paterson has announced that he will not run for re-election, in large part due to several scandals currently affecting his administration that are unrelated, so far, to the Aqueduct casino project.

Jeffrey Levine, whose company, Levine Builders, is a partner in AEG, said that Floyd's resignation would have no bearing on the group's negotiations with the state on a memorandum of understanding that would govern the administration of the casino. AEG is required to pay the state a $300 million upfront fee as part of the contract.

"Aqueduct Entertainment Group is continuing to move forward to complete the [memorandum of understanding," Levine said.