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Opinion

Big wager, big questions at Aqueduct

Architectural rendering in 2012 of the interior of

Architectural rendering in 2012 of the interior of the main entry to a proposed convention center and casino at Aqueduct Racetrack Photo Credit: Genting Group illustration

Second in an occasional series.

 

The greatest city in the world ought to have the largest and best convention center in the nation. But taxpayers shouldn't pay for it.If Genting Group, the Malaysia-based gambling behemoth, and Gov. Andrew M. Cuomo can make that happen in Ozone Park, with Genting paying, great. If, as advertised, the plan is transparent and elevates the community -- while opening up the West Side of Manhattan to better uses by replacing the Javits Center -- there's reason to cheer it.

That's a lot of ifs.

Genting, currently operating 5,000 video lottery terminals at the Aqueduct Racetrack racino, wants 5,000 more there. In return, Genting would invest about $4 billion to build and operate a 3.2-million-square-foot-plus convention center on state-owned land adjacent to the track, along with as many as 3,000 hotel rooms.

Convention centers are traditionally atrocious investments for governments. It's gotten even worse as convention and trade-show business has fallen 20 percent in the past decade nationally, while exposition space has expanded 40 percent.

Yet Boston, Baltimore, Washington, Cleveland, Nashville, Buffalo, Albany, Dallas and other cities are planning or considering more convention space.

Orlando and Las Vegas have been the big winners, able to parlay great weather and top attractions into magnets for their cavernous facilities, but even they have seen attendance level off. Additions that doubled the size of the Orange County Convention Center in 2003 and the Las Vegas Convention Center in 2008 did little to improve their visitor count, and the same has been true of the largest convention center in the United States, Chicago's 2.8-million-square-foot McCormick Place.

But the plan for Aqueduct is unique, because the largest convention centers are never built and owned by private-sector companies. If that's what Genting wants to do with its money to grow its gambling operation, while creating construction jobs and a massive enterprise in Queens, why oppose the concept?

But is it really Genting's money?

 

The state's share

About 70 percent of the profits from the slot machines at Aqueduct -- more than $200 million in the five months since the racino opened -- goes to the state and other designated funds. Genting gets the other 30 percent. On the next 5,000 video lottery terminals, the company wants to keep a much higher percentage, to pay for the convention center, so you could view the project as taxpayer-funded.

But state officials and Genting say without the convention center, there would be no players for the new machines -- so the only way for the revenue to be created, for the state or Genting, is this plan. The racino business at Aqueduct, while lively, likely isn't busy enough on its own to support another 5,000 VLTs.

Absent a multi-vendor bidding process, which can't happen because Genting already has dibs on the location, it's hard to say exactly what percentage the state could reap. That means this vague deal, announced by Cuomo during his State of the State address in January, but under the radar since then, must be ironed out and detailed for the public.

Any deal also needs to be right for Aqueduct and the neighborhood. State officials say the convention center must include 10 million square feet of enclosed space to support 3.8 million square feet of exposition space. Because Aqueduct is so close to JFK Airport, buildings can't be higher than three stories. So this facility would cover at least 60 acres. Few places near Manhattan could host that much construction affordably, and area residents could really use the jobs, so the idea makes sense on a tract that has limited options.

Because of airport restrictions, Ozone Park, 12 miles from mid-Manhattan, isn't in high demand by developers. The A train takes an hour from midtown and the infrastructure is inadequate to host Genting's vision. Roadwork and transit upgrades would be needed. Genting has said it is willing to pay for some of the work. The public would foot the rest and that could be a big tab.

Some of the issues can't be fixed. Express A trains would reach Aqueduct only a little faster, blocked by other subway traffic. Roads between Aqueduct and Manhattan are often congested.

And some visitors won't consider Aqueduct close enough to Manhattan to constitute a true "New York City" trip. The plan to create festive theme trains and buses from Grand Central Terminal and elsewhere could help.

And in Manhattan, what about Javits? It's New York City's biggest convention center, but at 760,000 square feet, the facility is too small to host huge consumer and trade shows. It's booked for at least 10 years, and can't be torn down before then, state officials say. The Javits site, particularly coupled with the 7 train extension, could be the key to unlocking the economic potential of this largely barren section of the West Side to residential, retail and commercial development, perhaps along the lines of Battery Park City.

One vision of tearing down Javits includes a convention center adjacent to the Farley Post Office, now under renovation as the new home of Penn Station.

 

Protect taxpayers

Building the nation's largest convention center at Aqueduct is a true gamble, but it's worth taking, as long as the taxpayer is protected. The construction project would create tremendous employment, as would the facility itself, and the additional machines would fatten the state's coffers significantly. But every aspect of the deal must be detailed for the public. If the project goes bust, consequences, like demolition of the building or future liability, must be laid at the developer's feet.

That said, roll the dice. The proposal at Aqueduct offers the best odds of any plan to increase tax revenue and revitalize the area, as long as the public will be gambling with the house's money.

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