NYC is slated to get three casinos. The state board that approved the proposals, however, has some reservations.
As largely expected, the Gaming Facility Location Board on Monday recommended that the remaining three casino proposals — Bally’s Bronx, Hard Rock Metropolitan Park and Resorts World New York City — receive state casino licenses.
The board determined that awarding all three licenses “best advances the state’s long-term economic, fiscal and community objectives.”
The proposals now head to the state Gaming Commission, which will ensure the applicants abide by New York’s licensing requirements. That assessment, as board Chair Vicki Been pointed out, will include “determining the character and fitness and the integrity of the applicants.”
“It is not a rubber stamp. I can tell you, having now spent many, many hours with the Gaming Commission team, they are an incredibly hard-working, dedicated, thorough, exacting and tough group to get through,” she said. “And they ask the right questions.”
This may sound ominous, but it becomes less so if you consider how many things the board found potentially wrong with the three proposals while still ultimately recommending that they receive a license.
In a 29-page report released Monday afternoon, the board details its evaluation of each proposal, including concerns about the applicants’ ability to deliver on various commitments made to their surrounding communities.
For all of the applicants, the board was disappointed that they didn’t make “binding commitments about the diversity of their workforces beyond best-efforts pledges.” The report states that the board is concerned about the “feasibility of meeting construction workforce MWBE goals, given disparities between the makeup of many of the construction-related unions and the stated targets.”
The board also views the estimated construction timelines for the projects as potentially overly optimistic.
But one of the board’s biggest concerns seems to be the prospect of teams either backtracking or otherwise failing to keep the promises they made to advance in the casino competition. The report repeatedly urges local and state agencies to monitor the progress of these commitments.
Here’s a rundown of the most notable issues raised in the report for each proposed casino:
Resorts World New York City
- The report raises concerns about Genting’s financing plan, pointing to the fact that it relies on future operating cash flow and debt. The company has $925 million in committed debt financing and will need to raise more. The report notes the risk of funding shortfalls if this money doesn’t materialize, “potentially requiring further capital support to complete the project from its parent, an affiliate, or third parties.”
- The board also flags that, among firms under the Genting Group umbrella, there’s a “history of projects delivered late or over budget, often due to scope increases, and its underperformance at some U.S. properties.”
- The board’s consultants believe Genting’s annual revenue projections are also too high. The consultants projected that the project’s gaming tax revenue would total more than $4 billion over 10 years. The project team estimated that its facility would generate more than $1 billion in revenue each year.
- The Resorts World team committed to the highest tax rates of any of the casino applicants, but has indicated that it now wants to lower that rate, according to the report. The high tax rate was one of the “determinative factors” that led the board to recommend Resorts World to the Gaming Commission, and the report warns that any reduction in that rate “would undermine the Community Advisory Committee process.”
- The report also notes that Genting reached an agreement with Cirrus Real Estate Partners to build 50,000 workforce housing units across the city but that “the substance of the project is vague.”
Bally’s Bronx
- The board found Bally’s project record to be “mixed” and noted that the company will need to “closely manage” and prioritize the development.
- The report also cites concern over the company’s high leverage and said Bally’s needs to “oversee its liquidity carefully.”
- While the report states that the Bally’s proposal includes detailed plans to promote energy efficiency, the board found that it “did not sufficiently address stormwater management or long-term climate resiliency.”
- Preliminary designs for the parking garages raised questions about traffic flow. The board also called the placement of physical screening over the two garages “unusual and aesthetically suboptimal.”
Hard Rock Metropolitan Park
- This casino team didn’t include a number of already-public project commitments in its application to the state. Those included turning part of one of the project’s garages into a “Taste of Queens” food hall, and a pledge to build 450 affordable housing units off-site.
- The application also didn’t include Flushing Skypark, which was key to securing support from Sen. John Liu. The board is recommending that the Gaming Commission require that these projects be completed as a condition of granting the team a license.
- Similar to Bally’s, plans for Metropolitan Park do “not sufficiently address stormwater management or long-term climate resiliency,” according to the report.
What we’re thinking about: Using “aesthetically suboptimal” for inspiration, what is the best euphemistic way to say a building’s design is ugly? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: Zohran Mamdani may, in fact, be the city’s 112th mayor. Historian Paul Hortenstine found that in 1674 Mayor Matthias Nicolls served a second, nonconsecutive term, which is not reflected in the city’s official count, Gothamist reports.
Elsewhere in New York…
— Starbucks has agreed to pay $38.9 million to settle claims that it violated the city’s law guaranteeing fair working conditions, the New York Times reports. The city’s Department of Consumer and Worker Protection found that the company “arbitrarily cut schedules and illegally prioritized their own profits over their workers’ rights” across more than 300 locations. As part of the settlement, more than 15,000 hourly workers will receive payments.
— Assembly member Harvey Epstein, who is vacating his seat early to join the City Council next month, endorsed City Council member Keith Powers to succeed him, City & State reports. “Keith Powers has been a consistent champion for tenants – protecting affordability, fighting displacement and supporting a rent freeze to keep families in their homes,” Epstein said in a statement. “Having represented AD 74, I know how critical strong tenant leadership is. Keith is exactly the person we need in Albany to carry that work forward.”
Closing Time
Residential: The top residential deal recorded Monday was $5.9 million for a condominium unit at 15 West 96th Street. The new Upper West Side condo is 2,700 square feet. Compass’ Shane Boyle, Theresa Persaud, Will Ortman and Francesca Paone have the listing.
Commercial: The top commercial deal recorded was $130 million for 97 West Street. The industrial site has multiple warehouses across 67,000 square feet of floor area.
New to the Market: The highest price for a residential property hitting the market was $14 million for a condo at 1228 Madison Avenue. The 3,5000 square-foot unit is on the Upper East Side. Compass’ Julie Pham and Angela Remigio have the listing.
Breaking Ground: The largest new building permit filed was for a proposed 13,185-square-foot residential building at 196 East Seventh Street in the East Village. Andrew Goodrich of Bealin Groups Corp is the applicant of record.
— Joseph Jungermann
