Guv: State can't count on fee for Aqueduct casino

New York Gov. David A. Paterson takes questions New York Gov. David A. Paterson takes questions from the media after he addressed the Downtown Lower Manhattan Association at its 2010 annual meeting. (March 9, 2010) Photo Credit: Charles Eckert

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Gov. David A. Paterson's confidence in a deal to place video lottery terminals at Aqueduct Racetrack appeared to fade Wednesday.

He said New York cannot count on a $300-million upfront fee due March 31 from prospective casino operator Aqueduct Entertainment Group. The fee was supposed to help balance the state budget, he said.

The shortfall comes as Paterson predicts the state will end the fiscal year in the red, causing $2.1 billion in payments to be withheld from local governments, state employees and others - in part because of the faltering AEG bid.

"Without a successful bidder in the Aqueduct-VLT . . . we now project that shortfall to be $2.1 billion," he said.

Still Paterson declined to say whether the AEG deal to build a casino at Aqueduct is doomed.

"That is the lottery's decision, and we'll wait for the lottery to make a decision before speculating what we can do about it," said Paterson, who has recused himself from the issue on advice of his attorney.

Paterson, along with Assembly Speaker Sheldon Silver (D-Manhattan) and state Sen. John Sampson (D-Brooklyn), the Democratic conference leader, in January picked AEG to build the casino at Aqueduct.

Silver Wednesday said he would not comment until Inspector General Joseph Fisch completes his report on the bid process. Sampson spokesman Austin Shafran declined to say if Sampson believes AEG will ultimately prevail.

The Rev. Floyd Flake, a politically influential Queens minister whose support Paterson courted, quit the AEG partnership Tuesday. Flake, a former congressman, did not return calls Wednesday.

Neither AEG chief executive Jeffrey Levine nor his spokeswoman returned calls for comment Wednesday.

But state Sen. Craig Johnson (D-Port Washington) declared the deal "dead as a doornail." Johnson said Lt. Gov. Richard Ravitch should take over negotiations from Paterson's aides, and if the AEG deal fails, state leaders should consider Belmont Park as an alternative casino site.

John McArdle, spokesman for Senate GOP leader Dean Skelos of Rockville Centre, said Skelos has not been kept informed about the deal's status.

With James T. Madore

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