Cuomo writes state legislature on Aqueduct agreement
Tuesday, January 10, 2012 - 04:28 PM
Governor Andrew Cuomo sent a letter to the heads of the State Assembly and Senate today, declaring his desire to work with them "in a spirit of cooperation" on the details of the development of a convention center in Queens.
"Given the past history, while I may have the legal authority to proceed unilaterally, I choose to only proceed in full public view and with support of the legislature in a spirit of cooperation," the Governor wrote.
Cuomo hits on a number of contentious points critics of the plan have pounced on--transportation to the site, labor agreements, competition with the Belmont site, whether or not the city needs a new site, specifically in Queens--in an attempt, certainly, to help smooth the process his office has committed the state to, in a non-binding agreement.
"The state is not building anything. We are not spending public money on a convention center," the Governor wrote. "The bottom line is that this is a low risk, high reward business opportunity for the state."
The Governor also again stated his desire for the legislature to take up the legalization of gambling this session.
"I will also ask the legislature to consider passing language authorizing a Constitutional Amendment to allow casino gaming in the State of New York. That referendum would be at best two years from now – if ever – and should be considered as a separate issue from these current proposals," he said, and went on to state that he hoped the Aqueduct deal would be finished well ahead of the gambling legalization.
The full text is below, after the jump.
Dear Majority Leader Skelos and Speaker Silver:
In my State of the State message last week, I spoke about a comprehensive program to foster economic development across the state. As the state’s resources are limited, our task will be to leverage private sector activity without significant funding from the state; no small challenge. Two projects I discussed were development of a convention center complex at the Aqueduct site in Southeastern Queens and the redevelopment of the Javits Center. As you will recall Genting New York LLC was granted in September 2010, the only franchise in New York City to operate a video lottery terminal (VLT) facility under a 30 year lease on 67 acres at Aqueduct. Genting has proceeded with the project, which from all perspectives, has gone exceedingly well.
In the past selection of gaming operators, race track issues, VLT designations have raised serious ethical and legal issues for the state. To be sure, the state’s current gaming arrangements are varied and controversial. I look forward to the opportunity to bring a logic and strategy to gaming operations in the state over the next two years through development of casino legislation and regulations.
In the interim, any transaction that the state makes with Genting or any modifications to the current state agreement will be submitted to the legislature for full review and action before becoming binding. Given the past history, while I may have the legal authority to proceed unilaterally, I choose to only proceed in full public view and with support of the legislature in a spirit of cooperation.
Genting has proposed further development of the site which includes the creation of a destination location of international potential. The destination location will include gaming, hotel rooms, entertainment, exhibition and convention center facilities. The economic impact of the project would be enormous, estimated to create thousands of construction and private sector jobs. The state investment would be minimal with potentially the greatest number of jobs produced in the state in many, many years. As you know, in each of the VLT racinos across the state, the state has, through legislation, negotiated a revenue sharing agreement and such an agreement would need to be negotiated here. Importantly, the new agreement would be binding only upon the new VLT terminal revenue which would be granted to the Aqueduct facility; while the terms and conditions of our original agreement remain in place. Hence, there is only the possibility of additional revenue for the state as our current revenue stream would be untouched.
While the discussions are preliminary and conceptual, at this point the first phase would include construction of 1,000 hotel rooms, theater and entertainment components, approximately 3 million square feet of convention and exhibition space, expansion of VLT gaming space and a parking facility. Importantly, Genting has the exclusive lease on all the land anticipated to be used in phase one and is the only legislatively approved VLT operator in New York City.
The second phase would require additional land beyond the 67 acres currently under lease to Genting. The Port Authority controls an adjoining 22 acres which Genting is considering for an additional 2,000 hotel rooms and approximately a half million more square feet of convention and meeting space.
Genting is prepared to work with the relevant labor unions and execute a project labor agreement. They will also work with the local communities and local governments on zoning, and meet or exceed all state MWBE requirements.
Transportation to the site is an issue that needs to be addressed and we have been discussing the feasibility of MTA service from Manhattan to Aqueduct, with Genting paying the cost of such service.
There is also an issue as to how this racino expansion at Aqueduct would affect operations at the nearby Belmont race track.
The Aqueduct project is linked to the Javits Center redevelopment as the New York Metropolitan area needs a convention site and if we do not plan to develop one as an alternative to Javits, then Javits would need to continue to operate. As I stated in my State of the State message, the Javits Convention Center is too small to be a competitive exhibition facility, and redevelopment of the current Javits site has exciting possibilities for the West Side of Manhattan and beyond. I also believe the redevelopment of Javits will render significant economic benefit to the State of New York which is essential during these challenging fiscal times.
I will also ask the legislature to consider passing language authorizing a Constitutional Amendment to allow casino gaming in the State of New York. That referendum would be at best two years from now – if ever – and should be considered as a separate issue from these current proposals. We would hope that the Aqueduct project could be finalized within one year on an expedited time frame.
Opponents to the project point out that many conventions centers lose money. That is a true point. Most governments weigh the issue of building a convention center with public money as a “loss leader” for the net economic gain of additional tourism dollars, etc. That is a debatable proposition. However, that is not the case here. The state is not building anything. We are not spending public money on a convention center. Genting, a private entity, will take the risk of economic success. I have never been a casino or racino proponent, but we are here now and the question is how to best maximize the economics and protect our citizens.
As you know, we are working aggressively to attract business investment to New York State. It would be ironic to say the least if New York did not seize an opportunity of this scale when presented with it.
The bottom line is that this is a low risk, high reward business opportunity for the state. The Genting organization already controls the land under phase one and already is the only legislatively approved operator for VLTs in New York City. Our only “cost” is noneconomic: the issuance of additional gaming machines at a preexisting gaming facility. The reward is approximately 10,000 construction jobs, 10,000 permanent jobs and $4 billion investment in the state. This investment would be one of the largest in the state’s history at no cost to the state.
A new convention center also frees the Javits site for redevelopment. I think the merits are clear.
I would appreciate your respective staff’s attention to engage in these conversations on a joint basis to see if they can be brought to fruition.
I also think it would be advisable for us to meet together with Genting officials in the coming weeks to discuss the proposal in person.
Governor Andrew M. Cuomo