Less than two months after Gov. David Paterson selected a politically connected group of investors, including rapper Jay-Z, to build a casino at a Queens race track, the governor’s office today canceled the deal, reportedly because the investors didn’t release sufficient financial information.
The Times reports:
A senior administration official said the company that had been selected, Aqueduct Entertainment Group, had supplied insufficient financial details for some of its investors. In other cases, the state’s Lottery Division was not comfortable licensing some of the company’s investors.
The deal to transform the 50-year old Aqueduct Race Track into a luxury “racino” met with problems almost immediately after it was announced by Paterson in late January. Losing bidders complained that the winning consortium, Aqueduct Entertainment Group, had presented an inferior bid.
The state inspector general began looking at the deal amid allegations of political favoritism by David Paterson. The U.S. Attorney subpoenaed the lottery division for information from the bids.
TPMmuckraker looked at the deal in this post.
In recent weeks, Paterson recused himself from the project “on advice of my lawyers.”
And Jay-Z, one of the investors in AEG, reportedly pulled out of the consortium. Also abruptly leaving AEG was Floyd Flake, a former congressman and powerful Queens minister.
Here’s the statement from Paterson’s office:
“The Division of the Lottery has concluded that it cannot issue a gaming license to Aqueduct Entertainment Group (AEG). Therefore, the State has officially withdrawn its support for AEG to develop and operate a video lottery terminal (VLT) facility at Aqueduct Race Track. The Executive Branch advocates that the selection of the Aqueduct VLT franchisee be done pursuant to an expedited, transparent, apolitical and publicly accountable procurement process.”
