The waiting is finally over in New York State.
Last Wednesday, the state’s Gaming Facility Location Board, a five-member panel charged with choosing up to four new Class III casino licensees, announced the winning bidders. The panel recommended licenses for just three of the 16 bidders: the Montreign Resort Casino in Thompson, Sullivan County; Rivers Casino & Resort at Mohawk Harbor in Schenectady; and the Lago Resort & Casino in the town of Tyre, Seneca County.
Each community will host Las Vegas-style casinos expected to generate millions of dollars in annual tax revenues and provide thousands of new jobs.
The referendum to expand casino gaming in the state, pushed by Governor Andrew Cuomo and passed by voters in 2013, called for up to seven casino resorts across the state: four to open in Phase I of the expansion, and three more to open seven years later. During the initial phase, three regions in upstate New York were selected to get at least one casino license: the Catskills/Hudson Valley region; the Capital region; and the Southern Tier/Finger Lakes area. All are considered in special need of an economic boost.
The mood was jubilant in the town of Thompson, future site of the Montreign. The property will be developed by Empire Resorts, operator of the nearby Monticello Casino & Raceway. The planned $630 million project, which will include an 18-story hotel, “means rebirth,” said local casino supporter Randy Resnick. “Basically, it’s our shot. This is our time.”
“I’ve been waiting to hear those words for a long, long time,” 60-year-old resident Steve Levine told the Associated Press. Levine recalls the heyday of the Catskills, from the 1940s through the ’60s, when vacationers flocked to Borscht Belt hotels like Grossinger’s, the Concord and the Nevele. When those days ended, so did the region’s economic prosperity.
The Rivers Casino & Resort at Mohawk Harbor in Schenectady will help to transform a rundown riverfront site, the AP reported. The $300 million development, set on 60 acres across the Hudson River from Albany, will include a hotel and a casino with more than 1,100 slot machines.
The Galesi Group and Rush Street Gaming will develop the resort. “I just knew it was the right site,” said Greg Carlin, CEO of Rush Street, which operates Rivers-branded casinos in Pittsburgh and Des Plaines, Illinois as well as SugarHouse, on the Delaware River in Philadelphia, will operate the casino. “It felt like our other sites and we’ve had great success in those markets.”
“I think the entire Capital Region will see impact from this project,” Ann Thane, mayor of nearby Amsterdam, told TWC News.
The third and largest project recommended by the panel is the Lago Resort & Casino. The $425 million resort, which will include a 94,000-square-foot casino with 2,000 slot machines and 85 gaming tables, will be built by Rochester-area mall developer Wilmorite. Tom Wilmot Sr., the founder of Wilmorite, told WBNG News his blood pressure “dropped about a hundred points” when the winning names were handed down. Lago will offer more than 200 hotel rooms and a number of restaurants and lounges.
For all the hoopla surrounding the announcements, all the panel’s choices must be vetted and approved by the state’s Gaming Commission. If all three projects move ahead as planned, they are projected to support more than 3,200 full-time jobs and generate $265 million in annual taxes for the state, along with $136 million in licensing fees.
“It’s going to be huge,” exulted Thompson real estate agent Pamela Pesante. “Jobs! People! Homes can get sold! It’s exactly what we need to boost our economy and our spirits.”
Four of the 16 bidders were in the Capital region and nine in the Catskills and Hudson Valley region. Six in Orange County were bypassed in favor of locations farther upstate. And some of the biggest names in gaming?including Hard Rock, Genting, Mohegan Sun and Caesars Entertainment?were passed over in favor of smaller developers.
The losers were outspoken. Jeff Gural, owner of Tioga Downs in Nichols, slammed the panel’s decision to choose Lago over his bid. “Anyone who understands the casino industry would call this a joke,” Gural told Syracuse.com. Gural invested hundreds of thousands of dollars in a campaign to expand casino gaming in New York. The casino referendum “was funded by the people who didn’t get a license, including me,” said Gural, who had planned to turn Tioga Downs into a full-fledged casino.
“I just feel bad for the people,” Gural said. The state “just guaranteed they are going to stay depressed. These people just got totally screwed by the governor.”
Stephen Donnelly, spokesman for the $212 million Traditions project in Johnson City in the Southern Tier, said the development team was disappointed by the outcome.
“The only reason why we got involved with this to begin with is that all the criteria set forth in the bill stated that we will get the license,” he told TWC News. “And based on all the things that were in there, we felt we have the most competitive advantage.”
Lou Santoni, president of the Binghamton Chamber of Commerce, said, “The Lago resort is nowhere near the Southern Tier, I don’t care how you draw the map. The restaurants, the hotels, the employees that would have been hired, the list goes on and on. All in all it was a pretty big hit for our community.”
Mitchell Etess, CEO of the Mohegan Tribal Gaming Authority, also expressed his disappointment in the results.
“The Facilities Location Board has chosen to overlook Mohegan Sun’s long track record of success in the Northeast, high level of brand recognition, unique outward-facing business model, and speed-to-market advantage among the bidders for a casino license,” Etess said in a statement released to the Hartford Courant.
A native of Liberty, New York and a member of the Grossinger family of Catskill hoteliers, Etess had been prepared to leave his position with the MTGA to oversee development of the proposed Mohegan Sun at the Concord.
“Most of all, we’re disappointed that we have not been recommended to play a role in an endeavor so close to our hearts: the revitalization of the Catskills and returning jobs and economic growth to this historic region,” he said.
Siting board Chairman Kevin Law defended the choices, saying, “We have sought to select those proposals that will maximize prospects for sustained success and be in the best overall interest of the state of New York.”
The Cordish Companies issued a statement saying a facility in Orange County, which is significantly closer to the New York City population base, “would have yielded a substantially higher and more sustainable revenue and job base for the state.” That said, the Baltimore developer continued, “We understand the commission’s decision to award the license to provide an economic engine to the depressed Sullivan County/Catskills economy.”
Though many hoped the panel would award two licenses in the Catskills, news about market saturation in the northeastern United States?including alarming headlines about casino closures in Atlantic City?caused the members to be more prudent. Keith Foley, analyst and senior vice president for Moody’s Investors Service, told U.S. News and World Report that oversupply in the area is a big concern.
“Are all of the sudden people going to just say, ‘Oh wow, we can go to Monticello!’? I don’t know,” he said. “I wouldn’t suggest it’s not going to be successful to some degree, but it’s definitely not as certain as it was in the old days when you built a casino and people came.”
Steve Norton, a longtime casino executive and consultant, said the board made a mistake not siting any casino in Orange County, inadvertently benefiting future competitors.
“The New York selection committee has made an egregious mistake in denying a casino to Orange County,” said Norton, “The decision is certainly an effort to help the Catskills, but there are better ways to accomplish this, by providing jobs at Orange County casinos and sharing new tax revenues with Sullivan and Ulster Counties. A Catskill casino is still further from the major population of North Jersey and New York City than existing casinos in the Poconos or Bethlehem, Pennsylvania; and there will probably be full casinos in Manhattan and North Jersey in the near future, totally obviating the benefit of Catskills gaming.
“Recent expansions of casino gaming have proved that the gaming customer will generally choose a casino closer to home, and only occasionally visit a more complete gaming experience, like Las Vegas or Atlantic City. Gaming expansion in Philadelphia, New York City and more recently Baltimore, have taken over 50 percent of casino win from Atlantic City casinos. There is no question that casinos would add a meaningful attraction for Catskills resorts, but won’t draw much additional visitation, now that casinos are much nearer the population centers in New York and New Jersey.”
Background checks and environmental reviews must be completed before the licenses are formally awarded. Here’s a complete list of the losing bids:
• Sterling Forest Resort, Orange County. The $1.5 billion plan from Genting was hotly contested by environmentalists. Genting operates Resorts World Casino New York City, a successful racino at Aqueduct.
• Caesars New York, Orange County. The $880 million Caesars Entertainment project in Woodbury, just off the New York Thruway some 50 miles from New York City, would have included a 300-room luxury hotel.
• Resorts World Hudson Valley, Orange County. Another Genting Americas project, the $830 million resort in Montgomery was positioned to siphon off customers who patronize Connecticut and Atlantic City.
• The $750 million Live! Hotel and Casino in South Blooming Grove, Orange County was a partnership of the Cordish Companies and Penn National Gaming. They planned a 12-story hotel and a gaming floor with 3,200 slot machines.
• The Hudson Valley Casino & Resort in Newburgh, Orange County, was proposed by Saratoga Casino and Raceway and Rush Street Gaming. They would have invested $670 million in a resort with a 300-room hotel.
• The proposed $640 million Nevele Resort, Casino & Spa was Ulster County’s only casino proposal. It was a popular and perhaps a sentimental choice at the site of the historic Nevele Hotel in Wawarsing.
• Mohegan Sun at the Concord, Sullivan County. The $550 million proposed casino in Thompson also had nostalgic appeal, as it was located on the grounds of the old Concord Hotel. Mohegan Sun and developer Louis Cappelli planned a 252-room hotel and 52,000-square-foot casino.
• Grand Hudson Resort & Casino, Orange County. Greenetrack, an Alabama bingo hall operator, hoped to build a $400 million resort in New Windsor near Stewart International Airport. The casino would have included 3,000 slot machines and 100 table games.
• Howe Caverns Resort & Casino, Schoharie County. By Howe Caves Development. This long-shot proposal would have constructed a $330 million-plus gaming hall at Howe Caverns, a natural tourist attraction. The proposal included a hotel, up to 1,500 slot machines, a waterpark and, according to one report, “an animatronic dinosaur attraction.”
• Capital View Casino & Resort, Rensselaer County. Saratoga Casino and Raceway and Churchill Downs proposed this $300 million investment in East Greenbush, off Interstate 90 east of Albany. The project called for a 100-room hotel, an entertainment center and a casino with 1,500 slot machines and more than 50 table games.
• Hard Rock, Rensselaer County. Hard Rock International promised that its global brand would have brought people to this $280 million destination in Rensselaer, across the Hudson River from Albany. The project included a Hard Rock Cafe and a boardwalk.
• Traditions Resort & Casino, Broome County. This proposal would have expanded the existing Traditions Resort and Conference Center.
• Tioga Downs Casino, Tioga County. Owner Jeff Gural would have spent $187 million to expand the existing racino in the Southern Tier. His plan included 1,000 slot machines, 50 table games and a new hotel and event center.
The bidders and their supporters spent more than $11 million on lobbying and campaign donations in 2012 and 2013, according to the New York Public Interest Research Group.
