Three bid for contract at Aqueduct Racetrack

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Three bidders submitted proposals for the Aqueduct video lottery terminal contract by Tuesday’s deadline, including one bid combining two separate companies that showed interest in the project, the state Lottery Division said.

Genting New York, LLC, Penn National and a group comprised of SL Green, Hard Rock Entertainment and Clairvest Group all produced bids by the deadline, the agency said.

SL Green, which was originally partnered with Hard Rock, and Clairvest, a Toronto-based merchant bank, initially planned to make separate bids.

Buffalo-based Delaware North, which showed preliminary interest in the project, withdrew from consideration.

“While we still believe in the merits of the development of a gaming facility at Aqueduct Racetrack and the substantial benefits to New York State education, the community and to stakeholders in the racing industry, we have concluded that the VLT vendor procurement structure as proposed makes it impossible for us to submit a conforming proposal,” Delaware North said in a statement. “A highly unusual set of financial conditions, including the non-refundability of down payment and unpredictability of state taxation rates, caused us to re-evaluate the project and ultimately decide against participat­ion.”

The VLT contract had been awarded to Delaware North in 2007, but the deal fell through after the company could not come up with the $370 million upfront payment it promised the state.

Meanwhile, the head of the Jamaica branch of the NAACP and other southeast Queens leaders called on the Lottery to scratch the bidding process during a protest in front of Aqueduct last week.

Leroy Gadsden, president of the Jamaica NAACP, said the bidding process is flawed because it excludes southeast Queens community boards from sitting on an advisory board and contended the contract does not go far enough to promote more involvement from minority- and women-owned businesses.

Gov. David Paterson and state legislators have proposed establishing the advisory board, which would include some members of Community Board 10 — which covers Ozone Park, South Ozone Park, Howard Beach and Broad Channel. But the Legislature must approve the body.

“We’ve been shut out of the entire process,” Gadsden said of southeast Queens. “This bidding process is flawed and exclusive.”

The process for evaluating bids for the VLT contract is done using a points system, with up to five points based on a bidder’s plan to include minority- and women-owned businesses in the project.

“Five percentage points is not enough,” Gadsden said, suggesting that between 20 and 25 points should be allocated for Minority Women Business Enterprise initiatives.

Lottery spokeswoman Jennifer Givner said although the agency will be evaluating bids for the contract, it was Paterson and state legislators who drafted the bidding process.

She said the process “follows most standard protocols” for state bidding contracts and is consistent with other projects.

“The process was intentionally structured to include the Lottery’s most aggressive MWBE employment targets ever. The extra scoring opportunity for high levels of MWBE participation by bidders and the inclusion of community members in the public bidders’ conference are evidence of the Lottery’s strong commitment to MWBE businesses, minority employment and conducting a transparent and fair bid process,” Givner said.

The Rev. Charles Norris, of the Bethesda Missionary Baptist Church in Jamaica, said southeast Queens would be subject to noise, violent crime, gambling addiction, prostitution and illegal guns as a result of the project.

“It seems ludicrous to expect this venture to positively serve our needs,” he said.

The Rev. Larry Davidson, of the Resurrection Celebration Church in Jamaica, said there should be an assurance that blacks will get a significant amount of the construction and permanent jobs from the VLT operation and invoked slavery.

“After 400 years of free labor in America, I don’t understand why African Americans have to beg for jobs in their communities,” he said.

The VLT contract had been awarded to Aqueduct Entertainment Group last year, but was rescinded after the Lottery found the consortium to be unlicensable.

Among Aqueduct Entertainment Group’s investors was influential southeast Queens minister the Rev. Floyd Flake, who had a 0.06 percent interest in the group.

Questions about Flake’s involvement in AEG were raised after the former southeast Queens congressman met with Paterson three days after the contract was awarded.

Flake had been quoted by the New York Times before the meeting as saying state Attorney General Andrew Cuomo would make “a great governor,” leading to speculation that Paterson might have chosen AEG to curry favor with Flake.

Paterson wound up abandoning his re-election campaign shortly thereafter.

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

Updated 5:58 pm, October 10, 2011
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