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MGM Mirage back in hunt for Aqueduct racino

Posted: Thursday, May 14, 2009 9:20 AM

by Paul Post

MGM Mirage, which two years ago dropped plans for a racino at Aqueduct, has partnered with The Peebles Corporation in seeking a 30-year contract.

MGM and the New York Racing Association had a contract worked out that would have seen MGM loan NYRA $250-million to put 4,500 video lottery terminals at the Queens track. The state, however, refused to approve the deal, prompting MGM to pull out.

NYRA subsequently sued the state, charging that high-ranking officials—including Governor George Pataki—deliberately drove the organization into bankruptcy to wrest control of its racetracks. The suit eventually was dropped when NYRA was awarded a new 25-year franchise last year.

The state once again is seeking a group to run Aqueduct’s VLTs. Six entities, including Peebles/MGM, submitted bids on Friday.

"They [MGM] obviously do have a history there," Peebles spokesperson Kendall Pryles said. "They had made some pretty decent headway. They’re excited to get back involved. It’s a great piece of property."

Peebles is the largest African-American real estate development company in the United States with a $4-billion portfolio of development properties, including the Royal Palm Hotel on South Beach in Miami that sold for $128-million in 2005. Its Washington, D.C., Courtyard Marriott has ranked in the top ten best performers in its brand worldwide for the last five years.

Last year, Peebles partnered with Buffalo-based Delaware North Companies in seeking the Aqueduct contract. Governor David Paterson chose Delaware North to run the facility, but the company later said it could not secure financing needed to meet a March 31, 2009 deadline, and Paterson reopened the bidding process.

Delaware North submitted a new bid on Friday and again listed Peebles as a partner. Founder R. Donahue Peebles, however, surprised Delaware North by submitting his own bid in partnership with MGM Mirage.

Pryles said Peebles did not know Delaware North was going to list Peebles as a partner in its new bid. Delaware North spokesman Glen White declined comment.

"I’m obviously very disappointed about what happened with Delaware North," Senate Majority Leader Malcolm Smith (D-Queens) said on Tuesday.

The gaming decision requires approval by Smith, Paterson—who are both African-American—and Assembly Speaker Sheldon Silver (D-Manhattan).
 
Other groups seeking the contract are SL Green Realty Corporation; Penn National Gaming; Las Vegas casino mogul Steve Wynn; and a group called Aqueduct Entertainment Group whose principals are unknown.

NYRA officials could not be reached for comment with regard to MGM’s unexpected renewed interest in the Aqueduct proposal.

Paul Post is a New York-based THOROUGHBRED TIMES correspondent