October 23, 2008 / 7:24 PM / 11 years ago

UPDATE 2-NY in $370 mln deal to expand Aqueduct Raceway

(Recasts, adds governor’s comments, background)

NEW YORK, Oct 23 (Reuters) - New York state on Thursday said it selected privately held Delaware North to expand the Aqueduct Raceway track, including the addition of video lottery terminals, and will receive a $370 million upfront payment.

Delaware North, which is based in Buffalo, New York, will also add a hotel, conference center, spa and retail space at Aqueduct, which is located in the New York City borough of Queens.

The deal for Aqueduct is expected to give New York state, whose budget gap could top $9 billion in 2009, a total of $10.3 billion for education over 30 years, officials said.

The selection of Delaware North came after the Republican-led Senate, which hopes to keep or expand a one-seat majority in the November elections, had moved to block the deal. The Senate said the plan lacked the elements needed to turn the horse track into a destination resort.

But a spokesman for Gov. David Paterson, who with fellow Democrat Speaker Sheldon Silver had agreed to select Delaware North over rivals, said no changes had been made in the deal.

“Delaware North’s bid was not changed,” the spokesman said. Allowing one company to modify its bid could have led to court challenges.

Paterson, in a statement, said: “Each day without a deal costs New York about $1 million in revenue.”

The governor has repeatedly warned that Wall Street’s historic losing streak will cost the state budget dearly because New York gets one out of every five tax dollars from securities companies.

Paterson and Silver selected Delaware North over rivals that included SL Green Corp (SLG.N) and Capital Play.

Republican state Senator Serphin Maltese, whose district includes the race track, said the company “responded with detailed plans for economic development and neighborhood improvements” and will consult more with local groups.

Delaware North is working with one of the nation’s most prominent minority developers, The Peebles Corporation of Coral Gables, Florida. One of the lobbyists working on the project was Patricia Lynch, the Speaker’s former spokeswoman.

Other losers had included the Seminole tribe, which was expected to partner with SL Green along with the Hard Rock Casinos, and the Mohegan Tribal Gaming Authority and Victoria Racing Club, which were working with Capital Play. (Reporting by Joan Gralla; Editing by Leslie Adler)

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