Las Vegas mogul pulls out of the game to redevelop Queens racetrack. Penn National Gaming and SL Green considered leading contenders to win it all.
As reported in Wednesday’s New York Times:
Wynn’s exit surprised rival bidders and state officials, who declined to comment.
Mr. Wynn, one of six bidders vying for the license at Aqueduct, had become frustrated by the extensive review process and the lack of clear rules, according to an executive who spoke with him recently.
Mr. Wynn had proposed a lavish 300,000-square-foot gambling and entertainment complex that some supporters had said would have added a touch of badly needed glamour to the aging track and attracted new customers. Mr. Wynn predicted that the track would generate $500 million in its first year, $135 million more than the state expected.
But critics said the proposal revealed Mr. Wynn’s failure to appreciate the working-class nature of the Ozone Park neighborhood surrounding the racetrack. Mr. Wynn also clashed with the leader of the hotel union in New York, Peter Ward, although Mr. Wynn eventually agreed to remain neutral if the union attempted to organize his proposed hotel
After news of Mr. Wynn’s departure circulated Wednesday, two bidders — R. Donahue Peebles, a developer who is bidding for the project in partnership with MGM Mirage, and SL Green Realty, a New York real estate company that is bidding in conjunction with Hard Rock Entertainment — issued statements expressing confidence that theirs was the best proposal.
Crain’s New York Business Reports:
Las Vegas casino mogul Steve Wynn has abandoned his bid to run a slot parlor at Aqueduct Racetrack, whittling the field of hopefuls for the potentially lucrative license down to five.
The withdrawal of Mr. Wynn, who had been considered among the front-runners, leaves two favorites remaining, according to a source connected to the process but not affiliated with any of the bids. Penn National Gaming, a one-time dark horse that has gained momentum, and SL Green, New York City’s largest commercial landlord, are now leading the field, the source said.
The winning bidder is expected to be chosen within two weeks by a triumvirate of Gov. David Paterson, Assembly Speaker Sheldon Silver and John Sampson, the Senate Democratic conference leader. The bidders’ ability to guarantee a hefty upfront payment to the state will be the overriding factor in any decision.
The narrowing of the field comes less than a week after Gov. David Paterson sent a letter to the bidders asking each to provide proof it can pay the state $200 million upfront within 30 days of being selected.
Only Penn had proposed to pay the state $200 million upfront. SL Green had offered up $125 million upfront and Mr. Wynn had proposed $100 million, with more money as the project progressed.
A group led by MGM Mirage and developer R. Donahue Peebles said it has already provided the state the evidence that it has the money to develop the racino. Penn National has said it would reinforce its financial commitment. Aqueduct Entertainment Group will also guarantee the $200 million, a spokesman said.
It was not immediately clear whether last week’s change to the process, or some other factor, sparked Mr. Wynn’s withdrawal.
On the heels of steep third-quarter losses, Mr. Wynn told the Associated Press last week that Wynn Resorts won’t expand in the U.S. until the business environment improves. “It’s tough to understand what’s going on,” Mr. Wynn said. “My 40 years in Las Vegas is not serving me very well at the moment.”
A spokesman said last week that Mr. Wynn remained fully committed to his Aqueduct proposal.
On Wednesday, the company released the following statement: “We are confident that the state of New York will find a qualified operator to meet its needs at Aqueduct. We would like to thank our associates and community leaders for all of their assistance in crafting our proposal.”
