After initially showing interest in one of New York’s downstate gaming licenses, Steven Roth’s Vornado Realty Trust is now deciding not to pursue a casino in the state. In a recent earnings call, Mr. Roth shared that it was highly unlikely that the company would apply for one of the three licenses. Currently, competition is already quite heavy and it might be a lost cause.
New York is looking to award three downstate full-scale casino licenses and soon interested parties will be able to submit their official proposals. Just recently, applicants were able to submit their second set of questions to the state and once they get answers, they will be able to present their official bids for review. Winners should be announced in early 2024.
Abandoning Casino Plans
Vornado Realty Trust’s idea was to put its chips on a casino project at the former Hotel Pennsylvania across Madison Square Garden. However, the competition is quite fierce, and it is believed that existing Class II gaming amenities have the upper hand in the pursuit of licenses with Resorts World New York City and Empire City Casino being the two mentioned names.
Mr. Ruth did not go into much detail about their New York casino bid. However, he did say that financing is becoming increasingly difficult to find. He added that capital is scarce and back-breakingly expensive and that the lack of financing and higher interests is leading developers to delay new projects and new construction.
In the summer, Mr. Roth noted that the company will not construct new office towers near Penn Station. Meanwhile, the state planned on using payments from Vornado to cover some of the costs related to improvements to Penn Station. After that, New York Governor Kathy Hochul the state is taking away the station’s redesign from Vornado’s office developments.
Plenty of Competition
As mentioned, the competition for the downstate license is quite strong, as applicants have made sure to bolster their bids and win over communities, they plan to build in. Recently, Soloviev Group announced that if selected for its Freedom Plaza project in Manhattan, NYC, it would build 1,325 apartments with around 40% of them below market-rent rates.
Meanwhile, in September 2023, Bally’s Corporation which eyes a casino resort at Trump Golf Links in The Bronx, launched a free-to-ride bus for patrons. The bus branded with the company’s logos kicked off operations on October 1, 2023, and runs a 10-stop route in the area. The generous gesture will certainly help gain support from residents, as it is an important factor in winning a license.
But that is not all, as there are more compelling bids for a downstate casino. Las Vegas Sands wants to develop an integrated casino resort in Nassau County, Long Island. Roc Nation, Caesars Entertainment, and SL Green have also teamed up to launch Caesars Palace Times Square in Manhattan. However, their bid was opposed by local businesses.
Source: Larsen, Keith “Vornado likely ditching casino plan” The Real Deal, October 31, 2023
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