Selection day coming this fall
New York gaming regulators will award Class III casino licenses to four of 16 bidders in the coming weeks. As the clock counts down to the big day, the development groups?all of whom are hoping to build in the economically challenged upstate?are busy with some last-minute lobbying.
Bryan Capelli, COO of Capelli Enterprises and part of the team that hopes to develop Mohegan Sun at the Concord, told the site selection committee if it chooses the team’s project, “You will be walking into a world-class resort in 18 months. We guarantee it.” Capelli said the development would be “a true comeback” for the Hudson Valley/Catskill Mountains area.
Representatives for Empire Resorts, the developers planning a $1 billion destination resort called Montreign in the Catskills, promised their casino would be “a game-changer for Sullivan County,” where residents have been the “victim of empty promises for decades.”
The developers of the proposed $640 million Nevele Resort, Casino & Spa in Ellenville presented a less glitzy, more family-friendly pitch to the commissioners, according to the Hudson Valley Times Herald-Record.
“This is polishing an old antique and making it beautiful again,” said Steven Kelly, head of Ellenville Hospital during a presentation that included community supporters.
The team behind the proposed Lago Resort & Casino, planned for Tyre, Seneca County, promise a $425 million investment that will mean $90 million in annual payments to state and local governments and 1,800 permanent jobs, according to the Finger Lakes Times.
When it comes to the Capital View Casino and Resort, a $300-million hilltop resort proposed for East Greenbush, representatives are talking up the pedigree of the development partners: Saratoga Raceway and Churchill Downs. “A $1.7-billion diversified gaming, online and racing entertainment company,” said Churchill Downs spokesman Austin Miller.
A casino planned for Rensselaer also emphasized the expertise of its developers. Hard Rock International is the driving force behind the $280 million riverfront resort plan. “The Hard Rock brand is something that is truly legendary,” said Jim Allen, HRI chairman, who dropped some famous names in hopes of dazzling the commissioners. “Whether it’s Shakira, whether it’s Ringo Starr, whether it’s Bono, whether it’s Bruce, the list goes on and on.”
Howe Caverns says its $450 million proposal would revitalize an entire region in Schoharie County. But some on the siting board were convinced about the wisdom of a plan that includes a kids waterpark, an underground cave attraction, and a resort.
“I don’t get the synergy between the natural resource of Howe Caverns, and a waterpark, and a casino,” said Stu Rabinowitz from the casino siting board.
The would-be developers of Schenectady’s Rivers Casino?the Galesi Group and Rush Gaming?say their $300 million harborfront casino along the Mohawk River would be part of a larger planned development.
“We felt we gave a very thorough proposal, and addressed every bit of criteria that the gaming act required, whether it’s problem gambling, minority hiring,” said David Buicko, the Galesi Group COO. “All that’s left is to wait.”
The Grand Hudson Resort and Casino in New Windsor is a project of Alabama racino operator Greenetrack. Though its location near Stewart Airport, Greenetrack has clashed with its home-state government over alleged illegal bingo operations.
In the community of Tuxedo, Orange County, the Genting Group plans what the New York Times called “an eye-popping complex with 1,000 hotel rooms and over-the-top entertainment for every taste and season: theaters, restaurants, ski runs, formal gardens, zip lines—even a refurbished Renaissance village.”
“How can you say no to that?” said Chad C. Beynon, a gambling analyst at Macquarie Securities Group. “How can you honestly pick someone else?”
But Jeff Gural, who is bidding on a license for his Tioga Downs racino, says it’s unfair to consider Genting when the Malaysian company already operates the successful Resorts World in Queens. “How many licenses are they going to give to one company?” said Gural.
Genting has responded by trying to outspend its rivals: the company has committed to invest at least $1.5 billion in its development, the Times reported. It has offered the state a license fee of $450 million, more than six times the $70 million requirement. It has promised to build a $30 million highway interchange. It says it will generate $400 million a year in state and local taxes.
In the community of Tuxedo, Genting Group plans what the New York Times called “an eye-popping complex with 1,000 hotel rooms and over-the-top entertainment for every taste and season: theaters, restaurants, ski runs, formal gardens, zip lines—even a refurbished Renaissance village.”
Casino giant Caesars hopes to build in Woodbury, Orange County. But Caesars financial problems could become an obstacle during the site selection process.
And Mitchell Etess, chairman and CEO of Mohegan Sun and part of the Concord project, warned that no Catskills resort could maximize its potential if the state chooses to license an Orange County casino.
“It would cut off the primary market of Sullivan,” he said. With an Orange casino, “the revitalization of the Catskills is over.”
At the same time, developers are facing questions about possible saturation of the marketplace, and whether gaming halls can deliver on the promise of economic stimulus. There has been a lot of talk about Atlantic City, which has closed three casinos this year and may see two more close before the end of 2014. The story of the shore resort has tamped the enthusiasm of some industry observers.
“Our primary focus is on picking the best locations in the state,” Kevin Law, the panel’s chairman, told Bloomberg News. “We have to look at economics as well, because we don’t want to do a disservice to residents of this state as the entire gaming industry is going through some type of retrenching.”
New Jersey’s casino revenue has fallen from $5.2 billion in 2006 to $2.86 billion in 2013. With the closures, 6,000 jobs have been lost. It’s also important for New York developers to weigh the possibility that New Jersey will open a casino at the Meadowlands or another location close to the Empire State.
“Soon one of the casinos we’ll all have to face is one in northern New Jersey,” said David Cordish, CEO of the Cordish Companies, who is proposing a resort in South Blooming Grove, also in Orange County. “I don’t have that kind of crystal ball, but I think most experts would be shocked if sooner or later there isn’t a northern New Jersey casino or two.”
Despite the free-fall in Atlantic City, New Jersey could still be the wild card when it comes to New York’s selection process, Law said.
“We can’t make a decision in a vacuum. If we were just making the decision in New York and we were our own country and we didn’t have neighboring jurisdictions, the decision would be easier. But we need to take into consideration what’s happening in other states, especially in Atlantic City,” Law said.
