07/27/2007 12:00AM

Spa gaming still a hot-button issue

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A buxom blonde in a black dress appears in TV and Internet ads telling viewers to whisper it: "Vapor."

Vapor is the Saratoga Gaming and Raceway's new nightclub, and the club delivers on the sexy theme of its commercials.

The club opened on May 25 with a menu of "Perfect '10'" cocktails, $100 bottle service, and sushi - that's right, sushi at a harness track. Club organizers announced a summer concert lineup that included the likes of the disco era KC and the Sunshine Band and rock group the Gin Blossoms.

With velvet rope VIP sections, the two-floor club would seem a better fit in Las Vegas or Atlantic City than next door to a half-mile racetrack in upstate New York.

Nevertheless, about 50,000 people visit the raceway each week, the vast majority of them to play the 1,762 slot machines that dot the gaming area. It's a remarkable success for the raceway, which opened in 1941 and whose future was in jeopardy after years of dwindling attendance.

In 2001, the state passed a gambling expansion measure calling for video lottery terminals, or slot machines, at nine racing tracks to help the struggling industry. Eight racino venues have since been built.

The Saratoga raceway's future brightened in January 2004, when it opened a gaming area with more than 1,300 slot machines. Two years later, the racino unveiled plans to increase the size of its 55,000-square-foot gaming floor to 90,000 square feet, including Vapor, a new buffet restaurant, and 400 additional machines.

But the expansion has not been universally welcomed. City leaders were frustrated when they were left out of the planning process, which was overseen by the New York State Division of Lottery. The resulting tension underscores the problems that can accompany conflicting private and public agendas: racino officials, who want to expand their customer base; lottery officials, who want to increase gambling revenue for the state; and city officials, who want to protect Saratoga Springs as a thriving year-round real estate market and vacation destination with boutique shopping and upscale restaurants.

Depending on whom you talk to, the city has had a love-hate relationship with the racino from the start. Some people feel the gaming facility was forced upon the city, bringing problems of increased competition for existing merchants and more traffic congestion. Others feel tax revenue and the 650 jobs generated by the first racino in the state are a welcome addition.

City leaders fought for the right to review the expansion project in 2006. Municipal planning boards typically review development projects to gauge what impact a proposal will have on surrounding streets, homes, and the environment.

However, New York lottery and Saratoga Gaming and Raceway contended the expansion fell under the state's review because new slot machines were involved. The lottery division led the project's environmental review, leaving neighbors and some city officials to ask: What does the lottery know about building a night club and restaurant?

The city of Saratoga Springs planning board voted 6-0 to ask the city council to support a legal challenge to the state-led review, but the council never took a vote on the resolution.

"My primary concern there was that there was no planning board involvement," Mayor Valerie Keehn said.

The council and planning board members agreed to meet with racino executives and attorneys on Aug. 8, 2006, to avoid a lawsuit. Three of the five council members were present. After opening remarks, Keehn asked members of the public, including the press, to leave so the two parties could discuss potential litigation.

Robert Freeman, New York's expert on the state Open Meeting Law, later said the closed-door session violated the statute.

The city kept no official record of the meeting, but information about what was discussed came out at an Aug. 15 council meeting.

During the closed meeting, the city asked if the racino was willing to compromise on its expansion plans, according to minutes of the Aug. 15 meeting. Dan Gerrity, president of Saratoga Gaming and Raceway, said he was not willing to pull anything off the table.

Gerrity, through a spokeswoman, would not comment for this article.

According to the city council record, a planning board member said during the closed meeting that future amenities at the racino should not include a convention center or hotel.

"The Racino officials disagreed," the council record says, "and indicated that such amenities enhance the amount of gambling done at a facility, and although there are currently no amenities at race tracks in the State of New York, there will be in the future and they would bring additional income into the Racino."

Keehn defended her reasons for closing the meeting, saying there would not have been an open dialogue if not for the executive session. Still, she contends that the law allowing the racino to circumvent local site plan review needs to be changed.

"If the state had been willing to sit down with us, partner with us, and listen to our concerns - that would have meant a great deal to us," Keehn said.

John Charlson, a spokesman for the New York lottery, said that even though the expansion was not reviewed by the city planning board, raceway and lottery officials met with the board and corresponded with the mayor and followed the environmental assessment rules set by the state Office of General Services.

Gavin Landry, who was Saratoga Convention and Tourism Bureau president at the time, said the slot machines have helped make Saratoga a year-round destination.

[Landry made his comments in June, a few weeks before becoming senior vice president for sales and market development of the New York Racing Association, which conducts Thoroughbred racing across the street from the harness track.]

In 2006, the Saratoga racino machines netted nearly $119 million. This summer, Keehn said, the city will receive its first revenue sharing payment, about $3.7 million. Saratoga County will receive about $1.2 million.

The lottery reports that Saratoga gaming has provided $194 million to state education since 2004.

To local harness horsemen, the machines have breathed life into their sport and business.

"If [the harness track] didn't have the machines, there's no doubt in my mind that it would have closed down," said George Karam, a trainer and president of the Saratoga Harness Horsepersons Association.

Harness purse totals before the slots were about $2.7 million over 129 race days in 2003, Karam said. The number of race days increased by more than a third in 2005, and purses swelled to about $12 million in 2006, he said.

Although the racino could draw business away from downtown merchants, Dawn Oesch, president of the Saratoga Springs Downtown Business Association, said she thinks competition is good for the city. She said it was the job of downtown businesses to promote the full "Saratoga experience."

"We want people to remember where the city's center, or nexus of Saratoga, is - it's downtown," Oesch said.

When the racino opened a new Garden Buffet restaurant to complement its Fortunes restaurant, the eatery was joining an already crowded field.

There are about 100 restaurant licenses in Saratoga, Landry said.

"For a city with 27,000 residents, that's a remarkable number of restaurants," he said, adding that the racino offers a much different experience than a Broadway eatery.

"I don't think it's a threat to the restaurants on Broadway," he said.

Others worry about the racino's impact in less specific ways.

Janette Kaddo Marino, a member of the Trackside Neighborhood Association, said the racino never considered neighbors' concerns regarding the expansion, especially the increased traffic.

Last March, the raceway's reputation got a black eye when a Saratoga County Grand Jury returned indictments alleging five horsemen at the track drugged horses with a painkiller found in cobra venom and Epogen - a blood-doping substance that helps to increase endurance.

Racino spokeswoman Sarah Cappelletti said racino officials were committed to being a "good neighbor."

"Some of our efforts include building a sidewalk and adding additional lighting on Jefferson Street, and moving our party tent indoors with the creation of Vapor," she said. "Having our concerts and dancing indoors will alleviate any noise the party tent may have created."

She noted that the racino has donated $450,000 to local charities since 2004, including Saratoga Hospital, the YMCA, Franklin Community Center, and the Double H Ranch founded by local philanthropist Charles Wood and the actor Paul Newman.

Kristine Bellino of the Jefferson Street Neighborhood Association said the racino did "butt heads" with neighbors and the city in the past but is now working to be part of the community.

"I think that the Saratoga Gaming and Raceway is doing a little bit more to give back to the community," Bellino said. "You don't hear as many derogatory comments from neighbors as you once did."