Unable to get financing for its $370 million development deal to produce video slot machines at the Aqueduct Racetrack, Delaware North Cos. Gaming and Entertainment said it has withdrawn from the project.
Peebles Corp. (No. 18 on the B.E. Industrial/Service 100 list with $245 million in revenues) and McKissack & McKissack, the nation’s oldest African American, female-owned, design and construction firm, were assigned to the project as prime contractors. Neither company was available to comment on the deal’s collapse.
“Since our bid was submitted in October 2007, there has been a deterioration of the credit and equity financial markets in this recession economy which has caused Aqueduct Gaming L.L.C. to restructure the timing for its financial offer,” said William J. Bissett, Delaware North president, in a statement. Aqueduct Gaming L.L.C. is a partnership between Delaware North Cos., Saratoga Gaming and Raceway, the Peebles Corp., McKissack & McKissack, and Mason Capital.
Gov. David Paterson selected Delaware North in October 2008 to develop the Video Lottery Terminal facility at the Queens, New York racetrack with the expectation that it would generate at least $8.2 billion for education over the next 30 years.
On Tuesday, Delaware North informed the Paterson administration that it would have trouble meeting a March 31 deadline to deliver the payment for the rights to develop the facility.
The loss of the project now leaves a $370 million hole in the NewYork state budget.
The Buffalo, New York-based company had been in discussions with state officials on altering the original deal that would have allowed it to revise its payment schedule, but the state rejected the restructuring proposal.
“The state remains committed to ensuring that Aqueduct is redeveloped,” Gov. David Paterson’s spokesman, Errol Cockfield, said in a statement Tuesday night. He added that the government will start a new selection process for the project.
Disappointed about the decision, Bissett said the rebidding of the project will cost New York even more in terms of added delays in construction and no assurance of a larger payment than Delaware North had offered. The company plans to submit a new bid for the project.