Three Developers Rolling the Dice to Land a Manhattan Casino License

Manhattan, says Michael Hershman, is “the Holy Grail” when it comes to building one of the new downstate casinos authorized years ago by the voters and the legislature.

“If the purpose of this whole exercise is to generate tax revenue,” he explains, “you need to have a casino in Manhattan. Why? Because of tourism. The vast majority of tourists . . . and I mean, when I say vast, capitalize that VAST majority of tourism money comes to Manhattan. It doesn't go to Queens. It doesn't go to Bronx. It certainly doesn't go to Brooklyn. So, there's no comparison when you look at the possibilities of generating billions of dollars in tax revenue, when you look at the possibility of a Manhattan casino versus outside of Manhattan.”

Hershman is certainly an interested party. As CEO of Soloviev Group he is offering one of the three remaining proposals for a Manhattan casino, and certainly the largest. He says Soloviev will pay the $1-million application fee on June 27, the deadline, and formally submit the company’s plan to use its currently empty land just south of the United Nations for an $11-billion “Freedom Plaza” casino and development.

But even as Hershman and other contenders put the finishing touches on their applications, a heated debate has opened about his core contention that one of the three available licenses should go to a Manhattan location, preferably his.

“Senator Brad Hoylman-Sigal has made it clear again and again, Manhattan is no place for a casino,” said a campaign flyer mailed to Manhattan households by Senator Hoylman-Sigal’s campaign for Manhattan borough president. “ . . . If you want a Manhattan casino don’t vote for me.”

His opponent, City Council Member Keith Powers, whose East Side district includes the site of Soloviev’s casino proposal, notes that Hoylman-Sigal voted in Albany to authorize the three downstate licenses that he now says should not be granted in Manhattan.

“Classic Albany approach,” Powers sniffed at a recent debate. “Come down to the city, say one thing, get on the train, do the opposite.”

Hoylman-Sigal for his part insists that his vote for three licenses downstate was never a signal he approved of one in Manhattan.

Indeed, applications are expected from others outside Manhattan, including from two “racinos” at racetracks in Westchester and Queens to expand to full-fledged casinos. The owner of the Mets is also proposing a casino in the parking lot near Citi Field, and there are proposals in the Bronx and Brooklyn, too.

The campaign debate between Powers and Hoylman-Sigal will now play out in the multibillion-dollar decision on where to locate the new casinos. As Hoylman-Sigal notes, the legislature included in the process powerful leverage for communities to block the casinos: community advisory councils composed of six elected officials.

Those officials are the governor, the mayor, the borough president, and the local state senator, Assembly and Council members. This effectively will give communities the power to veto casino proposals in their neighborhood before the state even considers which proposals produce the most revenue for the state. The developers blamed political resistance for the collapse of a plan for a casino and hotel on the western portion of Hudson Yards.

Hershman and the proponents of the two other Manhattan plans—in Times Square and on West 40th Street near the Javits Center, say the withdrawal of Hudson Yards has improved their odds. The chief financial officer of SL Green, which wants to repurpose its 1515 Broadway building into a Times Square Casino, told an investors group that the plan’s chances are “dramatically better and pretty good” now that Hudson Yards has folded, according to Crain’s New York Business.

“We have always been confident that Times Square is the best place for a world-class hotel, gaming, and entertainment destination, and that our bid uniquely generates benefits for the surrounding community and the entire city,” SL Green stated to Crain’s NYB.

And the Avenir project from Silverstein Properties, across from the Javits Center, also thinks they have the best proposal. “We designed The Avenir as though the neighborhood is a campus, architecturally tying all the elements so they work seamlessly together,” according to Silverstein Properties CEO Lisa Silverstein.

But Hershman says that neither the SL Green plan nor Larry Silverstein’s Avenir stack up against his Freedom Plaza when it comes to generating jobs and revenue.

“Their plans, their visions are much, much smaller than ours,” he said. “I'm not dismissing their effectiveness or their reputation or their business experience. They're well respected, and they're worthy competitors.”

The state says that 70 percent of its decision on granting the new downstate licenses will be based on their revenue and economic benefit. But that calculus will be applied after the community advisory councils vote up or down.

So all the contenders are rolling out enticements. For example, Hershman notes that Freedom Plaza, on the site of a former Con Ed substation, will include in addition to the casino, a 4.7-acre park, a Museum of Democracy, and over 1,000 units of housing, “almost 50 percent affordable.” Also, he adds, “We're going to create a community investment fund which gives 2 percent of the net profits directly back to the community with no strings attached, that could be as much as $200 to $250 million over 20 years . . . whether it's for community beautification, for schools, or for whatever they want to use it for.”

New York residents and pension funds are also being offered an opportunity to invest in the project, so they “actually have ownership of our integrated resort,” Hershman said.

Hershman also notes that the developer has a plan to manage traffic, putting the entrance to the casino on the eastern edge of the project, abutting the FDR Drive. Indeed, he says, the alternative plan for more housing without a casino, would generate more traffic around the entire site, from East 38th Street to East 41st Street from First Avenue to the FDR Drive.

The state is expected to convene the community advisory councils soon after the formal submission of proposals on June 27. The exact timetable from there is unclear although the state says it wants to complete the process and award the new licenses by the end of the year.

That matters, of course, because if things drag out, as they already have, some of the faces on the community advisory councils will change. A new borough president of Manhattan, for example, could, after Jan. 1, be a strong opponent of a casino in Manhattan. But Marisa Redanty, a Hell’s Kitchen activist, says that Manhattan neighborhoods have to deal with the world as it is—or specifically as the voters and legislature have created it—not as they might wish it to be.

“This isn’t about stopping a casino,” she wrote in an OpEd on W42st.nyc. “That window closed in 2013. But rather what kind of a casino and where?”

Redanty says she supports SL Green’s plan for Times Square, a partnership with Caesars Entertainment and Jay-Z’s Roc Nation, because it will result in more security and reduced crime. “I’m getting not ONE THIN DIME from any casino, Roc Nation or my dead Gramma,” she told the news site.