|NY James M. Odato, Times Union, Albany,
N.Y.McClatchy-Tribune Regional News
Jan. 06, 2012--ALBANY -- Gov. Andrew Cuomo may be colliding with state laws controlling competitive bidding with his plan to create a $4 billion convention center in Queens.
A state board is charged with deciding the fate of development at Aqueduct Race Track, not the governor, and only after an open competition.
The key players in the deal, including the governor's office, declined to answer questions Thursday about the legal requirements of authorizing the project.
Yet in his State of the State speech, Cuomo announced Wednesday that he had struck a deal with the Malaysian-based Genting Group in which the gaming and resorts company agreed to build a 3.8 million square-foot conference complex using $4 billion in private funds at Aqueduct Race Track. The project would be next to the massive racino Genting won the rights to build. The racino is doing better than anticipated business since it opened in October. Even before it greeted its first customer, Genting had already begun lobbying for the operation to become a full-fledged casino to increase its market.
The law creating the state board that keeps an eye on the New York Racing Association, however, spells out a process for such expansion. The Franchise Oversight Board, the law says, is responsible for representing the interests of the state in "all real estate developments proposed for Aqueduct racetrack."
"Any such real estate development shall only be undertaken pursuant to a competitive process approved by the board, after consultation with the applicable local advisory boards and consideration of local zoning and planning regulation," the law continues.
None of that happened.
Asked about the issue, a spokesman for state Budget Director Robert Megna, chairman of the oversight board, said he could not answer questions raised by the law and the governor's major economic development announcement in Wednesday's speech.
A Genting spokesman also would not discuss the matter, but said the company holds a lease on 67 acres at Aqueduct and needs another parcel of land controlled by the New York and New Jersey Port Authority to develop the proposed convention center and hotel complex.
Cuomo spokesman Josh Vlasto said terms of the deal are still under negotiation. He released the governor's letter of commitment to Genting, which describes the arrangement as "non-binding" and that terms are being worked out with Empire State Development Corp.
"Negotiations are ongoing and the public will be updated as we go along," Vlasto said.
Former state Sen. Michael Hoblock, who served on the state Racing and Wagering Board until four years ago, said Cuomo's deal "obviously raises a lot of questions on the authority and action of the oversight board in this process." While chairman of the racing board, Hoblock, now working as a private attorney in East Greenbush, objected to NYRA entering into a contract with MGM to build a racino at Aqueduct in a deal that never was consummated.
Assembly Racing Committee Chairman Gary Pretlow, D-Mount Vernon, added that Cuomo surprised him by naming Genting as a partner in a convention center at the state-owned track without seeking requests for proposal. "Generally you do that with an RFP," he said.
On Thursday Genting showed how far along it had come with its intentions for the site, releasing artist renderings of its "New York International Convention and Exhibition Center." It estimated 10,000 construction jobs and 10,000 permanent jobs associated with the center and 3,000 hotel rooms.
The local community board in Queens has not been given a briefing on the plan and is unsure if the project can be supported, said Betty Bratton, chairwoman of the Community Board 10. "Until I have a better grasp and significantly more detail on what they intend to do I can't answer that," she said. "Right now we are proceeding with an open mind. It could be an economic engine and we believe there should be appropriate community input and review as we move forward."
Genting is pushing for changing laws in New York and Florida to allow for casinos and is spending millions of dollars on lobbying. In a news release on Thursday, the company said it would erect 2.6 million square feet of convention center space by November 2014.
State officials say they expect the company to ask for a reduction on the amount of video lottery terminal revenues it must give up to the Division of Lottery. Don Reese, a spokesman for Las Vegas Sands, which competes with Genting in Singapore, said he is aware Genting is paying a high rate to the Division of Lottery.
Reese said his company weighs many things before spending billions of dollars on an integrated resort with a convention center, including the taxes or fees paid to the authorities to run gambling operations. He said his company would need an assurance of being allowed to run a casino with table games to make such an investment.
Reach Odato at 454-5083 or email@example.com
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