Aqueduct bidders will have to pay ‘entry fee’

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Under the new request for proposals unveiled last week by the state Lottery Division to construct 4,500 video lottery terminals at Aqueduct Race Track, bidders will have to pony up $1 million just to get their foot in the door.

The $1 million “entry fee” must be paid to attend a mandatory bidders conference June 8 at Aqueduct, according to the RFP.

The Lottery said the fee will be refunded if a group winds up not submitting a bid or is not selected for the VLT project.

Aqueduct Entertainment Group was selected for the contract earlier this year by Gov. David Paterson, state Sen. John Sampson (D-Brooklyn) and state Assembly Speaker Sheldon Silver (D-Manhattan), but the consortium was deemed unlicensable by the Lottery.

In the new process, the Lottery will evaluate the bids under a point system and recommend that Paterson, Silver and Senate President Malcolm Smith (D-St. Albans) approve their choice.

Scores are split between a technical evaluation, which will comprise 90 percent of a bidder’s grade, and a financial evaluation worth 10 percent.

Up to 25 points, the most that can be earned in the technical evaluation, can be given for management and experience in the areas of gaming, construction and hospitality.

A bidder’s marketing plan is worth up to 20 points and how quickly they can build the project is worth up to 16 points.

Both the bidder’s spending and financing plans are worth up to 12 points and their experience and plan to hire minority- and women-owned firms is worth up to five points.

The remaining 10 points designated for the financial evaluation is given to the bidder who offers the highest upfront licensing fee, with scores for the remaining contenders proportional to the highest fee.

Under the RFP, bidders must promise an upfront payment of at least $300 million.

“By way of example, but not a requirement, vendors should be aware that previous offers of an upfront licensing fee for the Aqueduct video lottery facility have ranged as high as $370 million,” the RFP document said.

The RFP was referring to Delaware North, a Buffalo-based company that won the VLT contract in November 2008. While Delaware North offered that sum, it was unable to pay the state the $370 million because of the economic downturn.

Community Board 10, which covers Aqueduct and the surrounding neighborhoods, will be involved in the process.

According to the RFP document, CB 10 members “will be invited to observe pre-proposal proceedings to which any or all bidders are invited, including but not limited to mandatory bidder conferences and all site walk-throughs required or authorized under the RFP.”

The board also is able to invite any or all of the bidders to make presentations before CB 10 as part of public hearings.

The RFP also calls for the formation of a community advisory committee of at least five members appointed by Paterson with the Senate’s consent.

CB 10 would get to recommend two people to the committee while Sen. Joseph Addabbo (D-Howard Beach) and Assemblywoman Audrey Pheffer (D-Rockaway Beach) each get to select one member. The remaining member can be selected without anyone’s recommendation.

The Lottery said request for proposals are due by 4 p.m. June 29 and the winner is scheduled to be announced Aug. 3.

Reach reporter Howard Koplowitz by e-mail at or by phone at 718-260-4573.

Updated 5:55 pm, October 10, 2011
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