Aqueduct Entertainment Group, the entity selected for the contract to operate and install 4,500 video lottery terminals at Aqueduct Race Track, publicly released the details of its bid Tuesday, which slammed two other contenders and gave a breakdown of the stakes of its investors.
Gov. David Paterson released all related bid documents late in the day Tuesday. AEG provided unredacted bid details on its own four hours earlier.
AEG has faced scrutiny over one of its investors, the Rev. Floyd Flake, the influential minister of the Allen AME Cathedral and former Democratic congressman from southeast Queens who met with Paterson just days after the governor and legislative leaders selected AEG.
Flake had indicated he might support state Attorney General Andrew Cuomo against Paterson in this fall’s election.
A spokesman for the state inspector general said the office is looking into the selection of AEG, but would not say whether the inspector general is working on an investigation with the U.S. attorney’s office in Manhattan.
Flake’s Empowerment Development Corp. has a 0.6 percent stake in AEG.
Darryl Greene, who pleaded guilty to misusing $500,000 in public funds in 1999 and is head of the Darman Group, withdrew from AEG’s bid last week. He also had a 0.6 percent stake.
In an undated letter from Larry Woolf, head of Navegante Gaming, which has a 3.08 percent stake in AEG, to AEG Chairman Richard Mays, Woolf said Hard Rock, which partnered with SL Green to make a bid for the contract, and rival bidder Wynn Resorts were not suitable for Queens.
“The Hard Rock target market is traditionally a younger clientele who is more drawn to the nightclub, late night party scene. This demographic is not the optimal VLT gaming customer in New York,” Woolf wrote to Mays, who has a 2.63 percent stake in AEG.
“While I am not casting dispersion on tattoos, or piercings, the 50-plus-plus-plus demographic is less comfortable surrounded by blaring rock music and the Generation X crowd who enjoy the Hard Rock brand,” he wrote.
Woolf called Hard Rock “too ‘rock n’ roll’” for Queens and Wynn “too ‘high end.’”
Wynn withdrew its bid in November because it did not approve of the bidding process.
Woolf said he did not believe Wynn could be successful in Queens.
“All of his brands are very high end, exclusive and sophisticated, which works when you need to differentiate yourself in a highly competitive market,” he said. “However, we don’t believe that extending one of those existing brands to Queens would be a good fit given the diversity of our customer base.”
AEG also provided a full list of its investors and their stakes in the entity.
The largest investor in AEG is the Canadian merchant bank Clairvest Group, which has a 57.6 percent stake.
Clairvest is followed by Douglaston-based Levine Builders and Greenstar Services Corp., which both have an 8.79 percent stake.
EGRios consulting has a 5.47 percent stake. No other investor has more than a 5 percent interest in AEG.
AEG claimed it would be the bidder who could complete the VLT project the fastest.
In its bid documents, AEG said it could be up and running 1,200 of the machines within eight months and the remaining VLTs would be constructed within 21 months.
It said it would spend $250 million for constructing the project, which includes amenities such as a hotel and conference center, an Aqueduct museum and a host of dining options.
Reach reporter Howard Koplowitz by e-mail at firstname.lastname@example.org or by phone at 718-260-4573.
©2010 Community News Group
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