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Casino developers abandon Albany for Rensselaer

Thursday, June 5, 2014
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Developer David Flaum, Global Gaming Solutions and Capital OTB have pulled their plans for a proposed casino near Thruway Exit 23 in Albany and are now focusing on the de Laet's Landing site in Rensselaer.
Developer David Flaum, Global Gaming Solutions and Capital OTB have pulled their plans for a proposed casino near Thruway Exit 23 in Albany and are now focusing on the de Laet's Landing site in Rensselaer.

— Lacking space and unable to make the financing work, a prospective casino operator has abandoned its plan for a casino in Albany in favor of a waterfront site across the Hudson River.

Developer David Flaum and Capital Region OTB are taking their partnership with Global Gaming Solutions from a site near state Thruway Exit 23 in Albany to a waterfront location in Rensselaer known as de Laet’s Landing. The move was several weeks in the making but was finalized after the partnership agreed they would be unable to build what they had initially envisioned at the 300-acre parcel off Noonan Lane, which contained only 17 usable acres.

Albany Mayor Kathy Sheehan said Flaum and OTB both informed the city Wednesday morning they have abandoned the site in Albany and are now concentrating on the property across the river. She said the land, which is divided by the Normans Kill and includes a number of steep slopes, simply wasn’t suitable for what the partnership had planned.

“What we were told is that the Exit 23 site, after being reviewed more in depth by their engineers, was not a financially viable site for developing a casino due to the expense associated with mitigating the wetlands and the slope and the topography of that site,” she said during a news conference at City Hall on Wednesday.

In contrast, de Laet’s Landing is perfect, Rensselaer Mayor Dan Dwyer said. Situated on the Hudson waterfront and within walking distance of a major transportation hub, he said the 24-acre site is ideal for a casino.

“This is the ninth-busiest train station in the country,” he said. “More than 750,000 people go through here in a year.”

The casino proposal for Rensselaer also has public support, said Dwyer, who has been an advocate for the site since last fall. The mayor said he’s received only one call in opposition of a casino locating in the city.

“And it was from a gentleman in Clifton Park,” he said.

On Wednesday evening, the Rensselaer Common Council passed a resolution in support of a casino in the city by a vote of 6-1.

Kym Koch, a spokeswoman for Global Gaming, said the decision to abandon the E23 site was based on it being incompatible with the vision the company had for a casino. Though not citing any specific issue with the 300-acre property, she said a study of the land showed that is would not be suitable to create the amount of jobs and level tax revenues Global Gaming had originally forecast with its proposal.

“A thorough review of the E23 site uncovered significant land development constraints that limit our ability to deliver a destination gaming resort at that property,” she said. “We believe that the de Laet’s Landing site offers the best opportunity to develop a world-class facility that will bring jobs and tax revenues to the Albany area.”

Flaum abandoned a bid to site a casino at the dilapidated Tobin’s First Prize plant straddling the Albany-Colonie border so that he could pursue E23. He did not return calls for comment for this story Tuesday or Wednesday.

Though the abrupt change of course for the former E23 partnership was a disappointment to some in Albany, the announcement didn’t come as a surprise to city officials. The partnership had stopped answering questions posed by the city as the June 30 deadline for gaming license applications approached.

“The longer it has taken for the casino operator to answer our very basic questions around what would be built at that site and what sorts of amenities they’d like at that site was certainly was an indication to me and to the rest of my team that they were potentially struggling with finding a way to make that viable,” Sheehan said. “To say that I’m surprised is certainly not the case.”

The E23 partnership also abruptly ducked out on a public hearing in the town of Bethlehem last week. The Town Board ultimately voted against supporting a casino proposal in Albany after hearing dozens of critics weigh in.

Albany Common Council President Carolyn McLaughlin lamented the loss of a project that could have brought renewed economic vigor to the city. Once thought to be a front-runner in the bid for the Capital Region’s casino license, Flaum’s proposal included plans for a 63,000-square-foot casino, 275-room resort-style hotel, 40,000-square-foot indoor water park, even an equine center and trail network.

“It was providing some spark of hope for people,” she said. “Now those embers have been blown out.”

But one city’s loss is another city’s gain. Dwyer’s hope that Rensselaer would land a casino license was dealt a critical blow last month when Penn National Gaming and The Cordish Cos. requested a refund of their $1 million application fee for the Capital Region license to focus instead on an existing proposal in Orange County — a far more lucrative market, given its proximity to the wealth and large population of the New York City metropolitan area.

Dwyer said much of the work done in the hope of landing the Penn National-Cordish proposal will now help fast-track the one now being developed by Global Gaming. The mayor even conducted a traffic study at the de Laet’s Landing site last month to help facilitate the process.

“I made sure to have everything in place,” he said.

Switching to de Laet’s Landing will also give Flaum, Capital OTB and Global Gaming something they couldn’t land at the site on the outskirts of Albany: access to a waterfront. This will give the partnership a chance to rival the multimodal approach now being touted by Rush Street Gaming and the Galesi Group, which are proposing a casino at the former American Locomotive Co. site on the Mohawk River in Schenectady.

De Laet’s Landing is owned by U.W. Marx, a prominent Troy-based developer that has tried unsuccessfully to build out a project that included a high-rise hotel, a man-made harbor and more than 1.3 million square feet of mixed-use space aimed at reuniting Rensselaer with a large swath of its waterfront. Once the site of Rensselaer High School, the property was leveled in 2008 and has sat vacant.

Located less than a half-mile from the train station and also near the Interstate 787 interchange, de Laet’s Landing offers unfettered views of the Albany waterfront. Unlike other sites, Dwyer said a casino could be built there in short order — something he expects will be attractive to the state Gaming Commission’s facility location board.

“We’re ready to go,” he said. “The building could be put in there quickly and you’d have a cash stream available.”

 
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