NEWS
Gov. Patterson asks Aqueduct racino bidders for upfront payment
Posted: Wednesday, November 04, 2009 10:19 AM
by Paul Post
Groups seeking the Aqueduct gaming contract have until Friday to once again submit their best and final offers to the state.
In a surprise move, New York Gov. David Paterson’s office sent a letter to all six bidders on October 30, after business hours, to see which firms are willing and able to make a $200-million upfront payment to the state, payable within 30 days of a signed memorandum of understanding. The bidders must submit documentation proving their financial ability to provide such money.
The state’s latest request caught bidders off guard, however, because they have already made upfront offers ranging from $100-million to $250-million and thought the state was close to making a decision.
“This isn’t one that was welcome,” an official close to the selection process told THOROUGHBRED TIMES on condition of anonymity. “Bidders already submitted ‘best and final’ offers more than once. Suddenly, they’re told the upfront payment needs to be increased by a sizable percentage. These guys [state leaders] have not shown themselves well in Albany [the state capital].”
The state is facing a $3.1-billion deficit and Gov. Paterson now wants to get at least $200-million from Aqueduct to help balance the budget. The state wants written documentation about financing to avert last year’s problem, when Delaware North Companies pledged the state $370-million, but could not secure financing to meet a March 31 deadline.
Penn National Gaming has reportedly offered the highest upfront payment, $250-million. Now, groups with lower bids may match that bid.
“Who can count anything out?” the official said. “If I was Penn National I wouldn’t be too happy.”
Penn National said it has cash on hand and does not need a partner to provide financing. Penn National Vice President Chris McErlean said, “We haven’t made any decisions with regard to adjusting our bid. We’ll review that and see if any adjustments are necessary. We feel we’ve put in a fairly substantial bid. The cash upfront payment speaks for itself. We’ve shown the state we’re ready to finance it ourselves. We’ve been complying with the process. It’s been a very fluid one.”
The state’s latest request for information indicates that a decision is not imminent, meaning the racino may not open in 2010. Once the state selects an operator, it will take at least ten months for the first video lottery terminals to be operational.
Paul Post is a New York-based correspondent for THOROUGHBRED TIMES
