05/11/2010 11:00PM

Lottery seeks Aqueduct casino bids


The New York Lottery plans to recommend an operator for a casino at Aqueduct by Aug. 3, the lottery said, under a new request for proposals that was issued Tuesday night.

The request for proposals restarts a process that has advanced and receded in fits and starts for nearly nine years with little result aside from generating hostilities among bidders, the racing industry, and politicians. Under the revised schedule, a casino could be up and running at Aqueduct by mid-2011, 10 years after slot machines were legalized at the track.

By law, the governor and legislative leaders of the state Senate and Assembly have the right to select the casino operator. In the RFP, the lottery said that Gov. David Paterson "intends to accept the lottery's recommendation of a selected vendor" and that Paterson intends to recommend that legislative leaders accept the recommendation as well.

Although officials for Paterson and Malcolm Smith, the Senate's temporary president, did not return phone calls Wednesday, Dan Weiller, a spokesman for Speaker of the House Sheldon Silver, said that Silver supported the new process. However, Weiller said he could not immediately answer whether Silver would automatically accept the lottery's recommendation.

Under the RFP, bidders will be required to guarantee an upfront payment of at least $300 million to the state. All principals in the bidding groups will be required to submit to background checks to determine their suitability to hold a gambling license.

In a news release, the lottery said that the "evaluation of the bidders" will be "based on predetermined and public criteria." The evaluation will be performed by a committee of lottery officials headed by director Gordon Medenica that also includes a representative of Paterson's budget office.

The RFP said that bids will be evaluated on the basis of the group's management and experience with casinos and construction projects; the group's marketing plan; the ability of the group to move forward quickly on the project; the amount of spending that the group will devote to the casino; the group's financing plan; the group's commitment to using women- and minority-owned firms; and the size of the upfront payment.

Under the lottery's schedule, the deadline for bids will be June 29. Prior to that deadline, bidders will be allowed to submit questions regarding the RFP and the process on two occasions. In addition, any bidders who are interested in submitting a proposal for the casino contract must attend a public meeting scheduled for June 10 at Aqueduct, according to the RFP.

Jennifer Givner, a lottery spokeswoman, said the state would not release any of the proposals to the public prior to the committee making its recommendation. The lottery also will not release any of the materials related to the scoring of the proposals, Givner said. In both cases, she cited the need for the lottery to make a decision "within a compressed timeframe."

On Wednesday, Daily Racing Form submitted a request under the state's Freedom of Information Law to review any materials related to the selection as they are submitted or produced, but Michelle Barbetta, the lottery's records access officer, said that the request was premature "until the announcement of the winning proposal has been made."

Most gambling-industry analysts expect the Aqueduct casino's 4,500 slot machines to produce net revenue of at least $600 million a year. The operator's cut of that revenue is estimated at $250 million, when including a marketing allowance. The racing industry will receive approximately 13 percent of the revenue.

Earlier this year, Paterson and Democratic leaders of the Senate and Assembly selected Aqueduct Entertainment Group, a sprawling politically connected partnership, to operate the casino. The selection was scuttled after it drew intense criticism as politically motivated.

In addition to Aqueduct Entertainment Group, five other companies placed bids on the 30-year contract to operate the casino. They included Delaware North Cos.; a partnership of SL Green and Hard Rock Casinos; a partnership of Peebles Development and MGM Grand; and Penn National Inc.

Delaware North was selected to operate the casino under similar procedures in 2008, but the company reneged on a promise to pay the state $370 million, and the deal was scrapped.

Rick Matthews, a spokesman for the SL Green partnership, said Wednesday that "we're looking at the RFP, and we're considering our options."

Glen White, a spokesman for Delaware North, refused to comment on whether the company would submit another bid for the project, citing a section of the RFP that prohibits any bidder from issuing a "new release" pertaining to the request for proposals without lottery approval.

Representatives of the other bidding groups did not return phone calls Wednesday or declined to speak on the record.