Push to Build Manhattan Casino Could Turn Out to Be a House of Cards – Commercial Observer
gOperators, developers and hedge fund giants are desperate to operate a new casino in the heart of Manhattan, but it may not be planned.
Since the New York State Legislature legalized the expansion of three new downstate casino licenses in the state budget in April, high-profile real estate owners have courted casino operators. games in a high-stakes effort to win a bid.
Several sites in Queens, Brooklyn, Staten Island and Nassau County have been slated as potential locations for a new casino, but the promised land for gambling industry veterans remains Manhattan.
“The market is going to be huge,” said Marcus Threats, senior partner in Marcus & Millichap’s hospitality practice. “Think of how close the number of people have an average income twice the national average. They will come out of the woodwork for this license.
The competition for a place to play is only beginning to heat up. In early October, the New York State Gaming Commission will appoint a three-member panel called the Gaming Facility Location Board, which will then have 90 days to issue a casino license application.
The proposals should be chosen next year, but there is a catch. To keep their hand warm, each project must get the equivalent of a royal flush – or four out of six votes from a Community Advisory Council (CAC) made up of appointees from the governor, mayor, president of the borough and district state assembly, state senate, and city council representatives. The measure, which was added to the state budget, could ensure Manhattan projects will take a beating if local officials pull together, stakeholders said.
“I’m not a fan of casinos or gambling; I voted against every gambling bill I’ve seen in Albany,” said State Senator Liz Krueger, whose Manhattan district will include Times Square and Penn Station by January. and who will appoint a member of the ACC. “It’s not obvious to me that there is a way. Many Manhattan elected officials and many voters also see no place for a casino in Manhattan.
Two owners of existing slot parlors have a head start on other offerings, multiple sources said. The Genting Group, which owns Resorts World Casino and Aqueduct Racetrack in Ozone Park, Queens, and opened a Hyatt Regency hotel on its site last August, wants to upgrade its “racino” to include table games with live dealers. direct. The same goes for VICI Properties, which acquired Empire City Casino in Yonkers from MGM last year for $17.2 billion. (MGM Resorts International still operates the casino.)
“Everyone knows that the hardest part of the process is getting local communities to support the idea of having a casino in their community, which is why Aqueduct and Yonkers are almost guaranteed to get the license because it there will be no local objections,” Jeffrey said. Gural, president of GFP Real Estate and owner of Tioga Downs Casino in upstate New York. “They have everything a casino offers and they can convert to a casino very quickly. They have nothing to build.
The third license remains to be won.
Likely bidders include some of the biggest names in real estate, and Midtown Manhattan and surrounding areas hold particular promise for several commercial developers.
Vornado Realty Trust chairman Steven Roth has long offered to turn one of his holdings near Herald Square into an integrated resort.
“Manhattan has, by far, the most hotel rooms, restaurants, museums, tourist attractions, and the region’s transportation network was designed with Manhattan as its hub,” Roth wrote in a letter to investors in 2021. “We have heard the chatter and have been approached.
Several Vornado neighbors have considered converting nearby properties they control. Morris Bailey, owner of Atlantic City’s first hotel-casino, plans to build a casino on the former site of the McAlpin Hotel at Broadway and 34th Street. And L&L Holding Company is planning a gaming facility in its 46-story Times Square tower on 47th Street that will also include the 108-year-old Palace Theater. The New York Times reported.
Other developers are already in contact with casino operators and putting their cards on the table. Representatives from SL Green Realty and the Hard Rock Cafe held meetings with elected officials this year to push forward a plan to put a casino at 1515 Broadway, though the hotel company now seems more inclined to back others projects. Hard Rock Chairman Jim Allen said the company had identified three potential sites for a casino, although he would not include the Hard Rock Hotel on West 48th Street which opened in May.
Then there are the related companies, whose representatives have met with city hall officials to discuss the company’s proposal to build a casino on train yards on the edge of Hudson Yards in far western Manhattan. Related Chairman Stephen Ross proposed to MSG Entertainment’s James Dolan to relocate Madison Square Garden to form a new sports entertainment complex, although Dolan rebuffed him. A Related spokesperson confirmed that the company was interested in a casino license and was exploring options for an offer.
Meanwhile, other developers are stepping up efforts to plug their sites into outer boroughs.
Joseph Sitt of Thor Equities and Red Apple Group CEO John Catsimatidis have launched casinos under construction along the Coney Island waterfront. Casino operators discussed adding a gaming facility to the parking lot at Belmont Park in Nassau County. And public officials haven’t ruled out dropping a casino on Staten Island, possibly near the St. George ferry terminal.
Finally, there’s Mets owner Steve Cohen. The hedge fund manager pitched the Citi Field parking lot as a potential casino site to city officials and has already met with representatives from Hard Rock and Las Vegas Sands to find a partner casino. But Cohen also emphasized broader plans to build hiking trails near Flushing Creek and redevelop the area around Willets Point, an industrial area filled with auto body repair shops that has long been on lists. things to do from the mayor.
“Willets Point isn’t very crowded, is easy to get to with public transportation, and we know they can handle big crowds because baseball and tennis are there,” Gural said. “If I was a punter, this would be the favorite.”
Developers may dream of blackjack tables and multimillion-dollar poker tournaments in Times Square, but the chances of a casino ending up anywhere in Manhattan are slim to none, according to multiple stakeholders.
“The level of support in Manhattan for a casino ranges from strongly opposed to nuclear opposition,” said an agent familiar with the licensing process. “It’s a Manhattan default exclusion.”
Borough President Mark Levine, City Councilman Erik Bottcher and State Senator Brad Hoylman are all against establishing a casino in Midtown, as are Congressmen Jerrold Nadler and Carolyn Maloney. The same is true for major entertainment and civic institutions in the area, including the Broadway League and the Times Square Alliance, not to mention several business owners, officials said.
“I haven’t heard from any voters who want a casino,” Hoylman said. “We know that poor and vulnerable New Yorkers are often targeted by casinos. They add traffic, noise and congestion, and they affect quality of life.
Krueger said she’s been discouraged by intense pressure from gambling industry lobbyists who have demanded tax breaks when their earnings fall below their forecasts.
“Our existing casinos, with online games, are saying, ‘We don’t earn enough, we have to lower our taxes.’ Give me a break,” Krueger said. “If in theory we allow gambling because we get tax revenue from it, people may not spend their money in other areas where we get tax money.”
Conditions may be more favorable in Queens than in Manhattan, but Cohen still has his work cut out for him.
In January, Cohen hosted Mayor Eric Adams and Adams Chief of Staff Frank Carone at his executive suite at Citi Field to pitch them the idea of a Willets Point gaming complex, Bloomberg reported. Last year, Cohen donated $2 million to a political action committee to support Adams’ mayoral campaign and made an in-kind donation of $1,935 to Governor Kathy Hochul’s campaign. He also cut a check for $67,100 to Hochul while his wife added the maximum contribution of $69,700. (For good measure, casino hopefuls Stephen Ross and Steve Roth each donated $69,700 to Hochul.)
Cohen’s lobbyists have also met with elected officials in Queens, including Borough President Donovan Richards and State Senator Jessica Ramos. Richards told the New York Post he wants to see “investment and employment development” in the Willets Point area in any proposal. Both told the Job they hadn’t seen any plans yet.
A proposal based in Queens or Brooklyn would also likely have the tacit support of the powerful Hotel Trades Council, which has lobbied Albany for months to issue new casino licenses. The union is seeking work for thousands of its members who are still unemployed after the pandemic closed dozens of hotels, and an outdoor casino site with a separate hotel offers the likelihood of more unionized jobs than a vertical casino tower in Manhattan, sources close to the thought of the union leaders said.
The mayor is also believed to favor a site in Queens, which would give him the opportunity to build a legacy project including a football stadium, hotel, school and convention center, sources said. Hochul’s preference is unclear.
They may not want to get too involved. The last time casino licenses were granted a dozen years ago, FBI agents targeted several lawmakers for their role in rigging bids for the Aqueduct racetrack, which Genting went on to win. State Inspector General Joseph Fisch referred his findings to the U.S. Attorney’s Office, which opted not to charge anyone, although four state senators involved were later arrested on other charges.
A political operative has warned the governor that she should stay as far away from anything casino-related as possible.
“I haven’t seen Hochul do real politics yet. It’s one of those areas where a lot of money is flowing,” the agent said. “His job is to let the gaming commission do its job. If I’m her, I stay away from her as much as possible once I’ve done my part of the job.
Update: This story originally said that Steven Cohen had donated $1.9 million to Governor Hochul’s campaign, but the sum was actually $1,935.