by Paul Post

New York Racing Association President Charles Hayward said on Monday that he would prefer Delaware North Companies or SL Green Realty Trust to get the contract for Aqueduct’s proposed video lottery terminal facility.

State officials are in the process of reviewing bids from both groups and Capital Play Inc., whose partners include Mohegan Sun of Connecticut, one of the nation’s most successful casinos.

Capital Play was one of three entities that challenged NYRA for the state’s next 25-year racing franchise, which the legislature awarded to NYRA on February 13.

“Unfortunately, they haven’t come to us,” Hayward said of Capital Play at a Monday conference previewing the 2008 Saratoga Race Course meeting that opens July 23. “The phone hasn’t rung.”

Hayward said that NYRA has made its wishes known to state officials that it would rather partner with Delaware North or SL Green, which is partnered with Hard Rock Entertainment.

Hayward questioned why Capital Play offered the state the lowest up-front payment for an Aqueduct racino, $100-million, after saying it would put up the most money when bidding on the racing side of the franchise. Delaware North and SL Green have offered gaming franchise fees of $370-million and $250-million, respectively.

Capital Play Chief Executive Officer Karl O’Farrell said that his team made two site visits to Aqueduct late this winter. More recently, within the past six weeks, he said that he called NYRA Chairman C. Steven Duncker.

 “I’ve spoken to Mr. Duncker. He said there was no need to meet. We did attempt to meet with them. Maybe Charlie [Hayward] doesn’t know about that,” O’Farrell said. “I find that strange.”

Also, O’Farrell said that state officials told Capital Play to deal directly with them on the gaming contract.

Capital Play has called for a $1.2-billion investment at Aqueduct, including a $400-million racino and $700-million hotel-retail-entertainment complex slated to open in 2010. The company says it will give the state $23-billion over the life of the contract, more than twice the $10-billion Delaware North projects based on higher VLT win-per-day earnings.

Hayward, however, questioned Mohegan Sun’s commitment to the New York market.

“They’re very good operators in Connecticut,” he said. “They’re going to make much more money for every dollar wagered in Connecticut than they would in New York. If they have a lot of New Yorkers who are going to Connecticut right now, do they really want those people to go to Aqueduct or do they want them to go to the woods of Connecticut?”

Hayward said that NYRA has had discussions with both Delaware North and SL Green, New York City’s largest manager of commercial real estate.

“Mohegan Sun is a great operator,” he said. “But when you don’t know what they’re doing and they’re not putting up as much money, it just seems to me that the other two are better choices for the state.”

Hayward did say, however, that the state had provided NYRA with copies of all three proposals.

He also reiterated the need for the state to make a choice and work out a final racing franchise agreement so that NYRA can get out of bankruptcy before its latest temporary extender expires on July 13. Unless NYRA gets out of bankruptcy, it will not have the funds needed to keep operating, he said.

Paul Post is a New York-based Thoroughbred Times correspondent