a casino is coming to Schenectady (with updates)

Published December 17, 2014

The group Stop the Schenectady Casino is, naturally, disappointed in the selection of Rivers Casino at Mohawk Harbor by the Location Board to apply for a gaming license.  We have, however, shifted our perspective from a fight to stop the casino in Schenectady to a mission to help prevent casino-made problems that can be anticipated once it begins operation. (see our  last casino masthead, with its new notation in red) We believe Schenectady is strong, creative and capable enough to have continued its revitalization without the problems created by reliance on a casino for jobs and revenues.  However, now that our political and business leaders no longer have to pretend that only good things will come from a casino in Schenectady, our hope is that the City and County of Schenectady will work closely with the casino operator, affected neighborhoods, and interested community and business groups to limit the potential adverse effects of having a casino in our community. We cannot afford for a Schenectady casino to fail.  If it does, it will be a gradual process in which we would be faced with waves of job losses, foreclosures and bankruptcies, steep reductions in revenues for government coffers, pleas for subsidies, and finally a huge white elephant carcass along the Mohawk — while also suffering from the likely social problems. We especially hope that local government and groups will work to

  • reduce the harm caused to families and the community by excessive gambling by persons without the financial ability to sustain significant losses
  • assure that various types of expected street crimes will not increase around the casino or overflow into neighboring communities
  • prevent environmental damage caused by increased traffic, light pollution, flooding hazards, threats to historic buildings, and lost enjoyment of riverfront resources
  • protect the Historic Stockade neighborhood from an increase in traffic that will almost surely reduce the quality of  life in the neighborhood, and threaten the integrity of its historic structures
  • ensure that the local entertainment and leisure business community is not harmed by the many competing elements that are part of the casino project
  • ensure that the casino operator cooperates with experts educators to keep problem gambling from infecting young potential gamblers

We members of Stop the Schenectady Casino and our allies in opposition to the casino hope to work in good faith with government and community leaders, along with the casino operator, to gain the most benefits for the community from Rivers Casino at Mohawk Harbor while producing a minimum of negative effects.  If the casino is indeed a reality, we need to turn our efforts from a short-term “fight” to try to stop a casino from being located in Schenectady into a longterm “mission” to make Schenectady the first city to avoid the social harm that comes with any urban casino.  That is a goal that both casino proponents and opponents can surely agree upon and unite their talents and resources to meet. The good news is that we have a couple of years to think through the issues and work on solutions (and perhaps the funding many of them will need).

  newspaper Although the Schenectady Gazette continues to pretend there never was an opposition group, and even ignored our Letter to the Editor outlining the forward-looking policy presented above, media outlets with no agenda regarding the Schenectady Casino are presenting a fuller story. We’ll add them to the following list as they appear.

See, for example: The brief discussion at WAMC by Dave Lucas, of the early responses to the selection of the Schenectady casino application, “New York Board reveals winning proposals for casino reports” ( Dec. 17, 2014).  The Times Union editorial board’s thoughtful piece on “casino questions, still” (Dec. 18, 2014).  Another Times Union piece, by Paul Nelson et al, “Casino, fracking foes vow to fight on” (Dec., 19, 2014); Channel 13’s interview with two spokesmen for the Stop the Schenectady Casino group, “Anti Schenectady Casino Group” (by Dan Bazile, Dec. 20, 2014); and [stay tuned]

MohawkHarbor -BrownfieldSign

ongoing brownfield remediation at ALCO (with or without the casino)

  • You can read the Statement of the Location Board supporting their Selection choices by clicking here; at the foot of this posting, we have copied the section of the Statement explaining the choice of the Schenectady application (pp. 11 – 13). update: See our posting “Location Board gives us its findings” (Feb. 28, 2015), which voices doubts over whether the Location Board really did take a good faith hard look at the facts.

p.s. Although we believe the Location Board came to its conclusions in good faith, it is apparent that its investigation of the facts on the ground in Schenectady was insufficient.  For example, the Board stressed that Rivers Casino would result in the replacement of the State’s largest brownfield.  The brownfield at the old ALCO site has not only been largely remediated already, but its complete remediation was planned to be completed, and would have been completed in 2015, without the construction of a casino at the site.

In addition, the Board stated that the Applicant has taken efforts to mitigate the impact on local interests.  In fact, for example, Rush Street Gaming and the Galesi Group have offered no plans or ideas for limiting negative effects on the Historic Stockade neighborhood, refusing to admit there would be any such effects.  We hope the cooperation Rush Street has claimed to be cultivating with the Stockade will become a reality.

 The collage below has renderings of the Schenectady Casino proposal from the Rivers Casino at Mohawk Harbor application:

CasinoApplication-drawings

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proffedupS Below is the portion of the Location Board’s Statement concerning its choice of Rivers Casino at Mohawk Harbor for the Capital Region (Region 2, Zone 2):

Region Two, Zone Two (Capital Region) The Board unanimously selects Rivers to apply to the Commission for a gaming facility license in Region Two, Zone Two.

Rivers’ Proposed Gaming Facility Rivers, owned by affiliates of casino and real estate developer Neil Bluhm, proposes to develop the Rivers Casino & Resort at Mohawk Harbor on the Mohawk River in the City of Schenectady in Schenectady County. The Rivers facility would reside on a 60-acre waterfront location. The facility is proposed to include a 50,000-square-foot casino featuring 1,150 slot machines and 66 gaming tables (including poker tables), a high-end steakhouse and other casual and light fare restaurants, an entertainment lounge, a banquet facility and a spa. The Rivers facility is part of Mohawk Harbor, a mixed use waterfront development being completed by The Galesi Group, a large and experienced real estate developer, which combines residential, commercial and retail uses as well as a new harbor, riverfront trails and open spaces. Rivers states that The Galesi Group will develop a hotel at Rivers’ facility with 150 rooms in addition to another planned 124-room hotel being developed on the northern portion of the Mohawk Harbor project. Board’s Evaluation Rivers’ total proposed capital investment is $300.1 million. The Board acknowledges the opportunities for enhanced economic impact in the region due to Rivers’ inclusion in the Mohawk Harbor development, which is the subject of a separate investment of approximately $150 million. The Board notes Rivers’ commitment to pay the required $50 million licensing fee. Rivers projects gross gaming revenues and gaming tax revenues in 2019 of $222.5 million and $82.1 million, respectively. The Board notes Rivers’ assertion that its facility will produce “as much or more revenue” as any of the other proposed facilities in the Capital Region and its observation that the “gravity model” that forms the basis for most market surveys does not take into account the particular abilities of the operator. Rivers anticipates supporting approximately 877 full-time and 193 part-time jobs in central Schenectady. Another compelling aspect of the Rivers project is that it supports the revitalization of the City of Schenectady by replacing one of the country’s oldest brownfield sites. The Board notes that Rivers proposes to brand the hotel (to be owned by The Galesi Group) with a national hotel flag such as the “Four Points by Sheraton” or “Aloft” flags of Starwood Hotels & Resorts. The Board believes that branding the Rivers hotel with a strong national hotel flag could be advantageous, particularly if the franchise arrangement facilitates Rivers’ marketing of its casino to the flag’s customer loyalty database. Rivers presents a reasonable and credible plan to finance its project with a combination of equity from its members and institutional third-party debt. Equity capital of up to 30 percent of the capital structure has been committed by interests of the Bluhm family, which is considered “permanent capital” that does not contemplate – Page 11 – a liquidity event for investors within a fixed term. In response to a question at the Applicant presentation, Mr. Bluhm emphasized that he had the capacity to provide additional equity financing if necessary to complete the project. The Board notes favorably that affiliates of Rivers have successfully raised capital in difficult financial markets and completed other comparable gaming developments on time and on budget. Rivers also indicates that a completion guaranty will be provided if required by the financing arrangements. Rivers provides highly confident letters for the proposed debt financing from multiple major institutional financing sources, each of which covers the full amount of debt financing required for the project. Gaming operations at Rivers will be overseen by local management and Rush Street Gaming LLC, an affiliate of Rivers. Although Rush Street has not formally been designated as the Operator of the facility, the ownership structure makes clear that Rush Street will be the driving force of Rivers’ operations. The Board finds that Rush Street is a gaming company with experience in developing, financing and operating entertainment and gaming destinations on a scale comparable to the proposed Rivers project. The Board finds that Rivers presents a complete analysis of anticipated local impacts and provides strategies for mitigating those impacts. Rivers demonstrates local support and the Board notes Rivers’ commitment to partner with local businesses and promote regional tourism, including impacted live entertainment venues in the area. Rivers intends to implement a workforce development program that employs the existing nearby labor force, including those who are currently unemployed. Rivers demonstrates organized labor’s support of the project through signed agreements. The Board finds that Rivers presents sufficient measures to address problem gambling, including training employees in recognizing problem gambling. Rivers commits to using sustainable development principles in construction and operation of the gaming facility and will establish a hiring and training program that promotes a skilled and diverse workforce. The Board finds that Rivers proposes to establish and implement an affirmative action program for the engagement of minorities, women, persons with disabilities and veterans in order to increase the diversity of the gaming industry workforce. Rivers will purchase primarily domestically manufactured slot machines. Regarding Other Proposals in Region Two, Zone Two The Board notes that in the case of the Howe Caverns proposal, a critical concern is that the Applicant provided no commitment or highly confident letters for either its equity or debt financing. Unlike all other Applicants, the sponsors of the Howe Caverns proposal stated that it could not propose a capital structure in any level of detail prior to receiving a gaming license. The Board notes that in a supplement to its initial Application, Howe Caverns provided a commitment for one credit facility. However, the Board is unable to verify the financial ability of the lender to satisfy such commitment. The Board notes that the level of public support for the Capital View project was significantly less than was the case for the other three Capital Region Applicants. – Page 12 – a liquidity event for investors within a fixed term. In response to a question at the Applicant presentation, Mr. Bluhm emphasized that he had the capacity to provide additional equity financing if necessary to complete the project. The Board notes favorably that affiliates of Rivers have successfully raised capital in difficult financial markets and completed other comparable gaming developments on time and on budget. Rivers also indicates that a completion guaranty will be provided if required by the financing arrangements. Rivers provides highly confident letters for the proposed debt financing from multiple major institutional financing sources, each of which covers the full amount of debt financing required for the project. Gaming operations at Rivers will be overseen by local management and Rush Street Gaming LLC, an affiliate of Rivers. Although Rush Street has not formally been designated as the Operator of the facility, the ownership structure makes clear that Rush Street will be the driving force of Rivers’ operations. The Board finds that Rush Street is a gaming company with experience in developing, financing and operating entertainment and gaming destinations on a scale comparable to the proposed Rivers project. The Board finds that Rivers presents a complete analysis of anticipated local impacts and provides strategies for mitigating those impacts. Rivers demonstrates local support and the Board notes Rivers’ commitment to partner with local businesses and promote regional tourism, including impacted live entertainment venues in the area. Rivers intends to implement a workforce development program that employs the existing nearby labor force, including those who are currently unemployed. Rivers demonstrates organized labor’s support of the project through signed agreements. The Board finds that Rivers presents sufficient measures to address problem gambling, including training employees in recognizing problem gambling. Rivers commits to using sustainable development principles in construction and operation of the gaming facility and will establish a hiring and training program that promotes a skilled and diverse workforce. The Board finds that Rivers proposes to establish and implement an affirmative action program for the engagement of minorities, women, persons with disabilities and veterans in order to increase the diversity of the gaming industry workforce. Rivers will purchase primarily domestically manufactured slot machines. Regarding Other Proposals in Region Two, Zone Two The Board notes that in the cae of the Howe Caverns proposal, a critical concern is that the Applicant provided no commitment or highly confident letters for either its equity or debt financing. Unlike all other Applicants, the sponsors of the Howe Caverns proposal stated that it could not propose a capital structure in any level of detail prior to receiving a gaming license. The Board notes that in a supplement to its initial Application, Howe Caverns provided a commitment for one credit facility. However, the Board is unable to verify the financial ability of the lender to satisfy such commitment. The Board notes that the level of public support for the Capital View project was significantly less than was the case for the other three Capital Region Applicants. – Page 13 –

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StopSchenectadyCasino2015Calendar Click here for a memento of the Stop the Schenectady Casino campaign: a one-page 2015 calendar (to print at 8″ x 10″)

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