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What you need to know for 11/24/2017

Schenectady, two others awarded casino licenses

Schenectady, two others awarded casino licenses

It’s official — Schenectady is getting a casino.
Schenectady, two others awarded casino licenses
A rendering of the Rivers Casino and Resort at Mohawk Harbor in Schenectady.

It’s official — Schenectady is getting a casino.

The state Gaming Commission unanimously approved awarding a casino license to the Rivers Casino and Resort at Mohawk Harbor in Schenectady during a meeting Monday in New York City. Along with the planned $330 million attraction along the Mohawk River in Schenectady, the commission also OK’d licenses for Lago Resort and Casino in Tyre, Seneca County, and Montreign Resort Casino in Thompson, Sullivan County.

Mary Cheeks, who will be general manager of the Rivers Casino when it opens, said construction will begin on the casino immediately and take about 18 months. That means it could open its doors by the summer of 2017.

The casino — slated for the 60-acre old Alco site off Erie Boulevard — is a joint venture between Rotterdam developer the Galesi Group and Rush Street Gaming of Chicago.

“We already began some foundation work,” Cheeks said during a phone interview Monday evening. “We’re staying well within the 24-month time frame, but it will be [opening] sooner than that. The financing is in place and all we were waiting for was the license.”

Rush Street can pay the required $50 million state licensing fee at any time before March 31, according to Gaming Commission spokesman Lee Park. Once it does so, the clock starts on a two-year deadline to build and open the casino, under provisions of the Upstate NY Gaming and Economic Development Act, Park said.

Cheeks, who now serves as CFO of Rush Street’s Rivers Casino in Pittsburgh and SugarHouse Casino in Philadelphia, said she is planning to start searching for future employees by spring. About 1,200 jobs are expected to be created.

“I need to understand what the workforce will look like and the numbers in the region,” she said. “I will set up a job site and then start informational sessions and job readiness programs. We should probably start that by March or April.”

Galesi will lease to Rush Street the portion of the site on which the casino will be built. Galesi CEO Francesco Galesi and COO David Buicko each have an option to purchase up to 4.9 percent of the Rivers Casino.

The Rivers Casino will have a 50,000-square-foot gaming floor with 1,150 slot machines and 66 table games. Rush Street is projecting $223 million in gaming revenues by the third year of operations.

Rush Street will provide the city and the county with a projected $4.1 million each in revenue along with $2 million to the Schenectady City School District, as required under the law.

Schenectady Mayor Gary McCarthy said he believes that revenue stream to the city would be sufficient to cover any negative impacts of the casino, such as increased demand for police, fire and paramedic services.

“Those are good-faith estimates and I approach those as a ballpark figure that we reference,” he said during a news conference at City Hall shortly after the Gaming Commission’s meeting. “Rush Street has indicated that they want to be part of the overall growth that’s happening in Schenectady. So I look forward to them being a full partner in the growth, rebirth and revitalization of Schenectady.”

McCarthy, who was re-elected for a second term last month, said he hopes the casino opens in the first half of 2017. He is anticipating that city residents will benefit with a 10 percent tax cut in 2017.

“The market has been shifting where we have moved away from the two destinations of Atlantic City and Las Vegas and now we’re going to regional facilities,” he said. “The market study shows that the casino in Schenectady will be successful.”

A recent report from Moody’s Investor Services said new full-scale casinos in New York, like the Rivers Casino, would only spread existing gambling revenue thinner and that the Northeast gambling market is already oversaturated.

James Featherstonhaugh, minority owner of the Saratoga Casino and Raceway in Saratoga Springs, said the future Rivers Casino will lead to a decrease in revenue and staff at his racino.

“We’re expecting vigorous competition,” he said Monday afternoon. “We expect it to have a substantial negative impact on our revenue. We think we have a better location, and we’re prepared to roll up our sleeves and compete with Rush Street, who we know and who we expect will run a good operation.”

Featherstonhaugh said with the new competition about a half hour away, he expects the racino’s workforce will be downsized and that changes would be made to the gaming floor.

The racino has recently launched video blackjack in response to the pending competition. A new $40 million hotel, set to open in the summer, will have 117 rooms and a new location of chain restaurant, Morton’s The Steakhouse.

“In addition to the new hotel there will be changes made over time,” he said. “I expect our casino workforce will be cut back, but I also expect our overall workforce to go up with the hotel. We have just been moving forward to present the best product that we possibly can.”

Work is ongoing at the 60-acre Mohawk Harbor site off Erie Boulevard with construction of a 50-boat-slip harbor, a 204-unit apartment building and 124-room Courtyard by Marriott hotel.

Also planned for the brownfield site are condominiums, townhouses, office and retail space, and biking and walking paths. Rush Street also plans to develop a 150-room hotel adjacent to the casino.

Lago Resort and Casino, a $425 million project in Tyre being pursued by Wilmorite and Peninsula Pacific, is projected to open in the first half of 2017. It is expected to create 1,800 permanent jobs.

The Oneida Indian Nation, which operates Turning Stone Resort Casino in Verona, about 65 miles east of Tyre, is planning to go to court to try to stop development of that casino.

Montreign Resort Casino in Thompson is a $630 million project spearheaded by developer Empire Resorts, which operates through a subsidiary of the nearby Monticello Casino & Raceway. It is expected to open in the spring of 2018.

The Rivers, Lago and Montreign casinos have been projected to support more than 3,200 full-time jobs and generate $265 million in taxes, along with $136 million in licensing fees.

Tioga Downs in Nichols, Tioga County, is still awaiting a casino license to expand with table games, a hotel, additional restaurants and a concert venue. It was recommended for a license only in October, much more recently than the other three proposals.

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