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Wilmot upbeat on chances for proposed casino

Rochester Business Journal
July 11, 2014

Wilmorite wants to build Lago Resort & Casino, a $425 million gaming complex, in Tyre, Seneca County. (Rendering courtesy of Wilmorite)

Wilmorite Inc. chairman Thomas Wilmot Sr. thinks his firm’s $425 million casino in Seneca County is the best bet to be picked from three proposals for a gaming facility in the eastern Southern Tier region.

“We’re very optimistic,” Wilmot said this week after executive summaries for 17 proposals statewide were made public.

Wilmorite is competing against two groups with proposals for the Southern Tier. One or possibly two will be chosen.

The Scottsville-based real estate developer’s Lago Resort & Casino, in an application submitted by Wilmorite entity Whitetail 414 LLC, proposes 2,000 slot machines and 85 table games.

More than half of projected first-year gambling revenues of $263 million would come from visitors attracted away from New York gambling facilities that already exist.

Some 21 percent of those revenues, the application states, would come from racinos, including Finger Lakes Gaming & Racetrack in Farmington, Ontario County, 32 miles to the west.

Another 30 percent would come from Native American casinos, including Turning Stone Resort Casino and Vernon Downs Casino Hotel and Racetrack in Oneida County to the east.

Details for the three Southern Tier proposals were among 17 executive summaries posted this week by the New York State Gaming Commission on its website.

The Wilmorite casino’s projected revenues would increase to $348 million by 2026, the application states. An estimated 51 percent of that would be drawn away from existing racinos and Indian casinos, but the remaining 49 percent would be new revenue, including 14 percent repatriated to New York from out-of-state gaming facilities.

“We know, as an example, that approximately 2 million Canadians come down to the (Waterloo Premium Outlets) center,” Wilmot said. “We couldn’t figure a way to know exactly what percentage of those people we could possibly capture, but we’re certainly going to be working on it.

“We would hope to build on that (mall) business, but that’s not anything that’s going to happen real quickly. That’s going to be a major campaign just to get our information in front of people and to identify those customers coming out of Canada, where they’re from and what their email addresses are.”

Rival applications
An application from Tioga Downs Racetrack LLC proposes 1,000 slots and 50 table games to complement existing harness racing and lottery games at the Southern Tier track.

Tioga Downs Casino, Racing and Entertainment also would include a 136-room hotel, five restaurants and an 18-hole golf course and country club in Nichols, halfway between Elmira and Binghamton.

“Tioga is about $90 million,” Wilmot said of the cost of that project. “We’re $425 million. Everything sort of directly relates to that.”

The Tioga application estimates more than $122 million in gambling and other revenue within two years of the casino’s opening, with 1,241 jobs created directly or indirectly.

The third Southern Tier proposal, from Traditions Resort & Casino, touts a 450,000-square-foot expansion of the existing 60,000-square-foot Traditions at the Glen Resort and Conference Center in Johnson City, Broome County, with 160 rooms added to the current 41.

Traditions is partnering with Gaming & Leisure Advisors LLC, a subsidiary of Seneca Gaming Corp., operator of Indian gambling facilities in Niagara Falls, Buffalo and Salamanca.

State legislation passed in July 2013 calls for four casinos in Upstate New York, with at least one—and no more than two—in the eastern Southern Tier, the Capital District and the Catskills/Hudson Valley area.

Selections will be based in part on the number of jobs to be created, the amount of capital investment, the amount of revenue generated and the development and integration with regional tourism, the legislation states.

Wilmorite’s proposed Lago project would generate $311 million in gross revenue in its third year of operation, compared to $122 million for the Tioga Downs facility, according to calculations by Wilmorite. The Seneca County casino will employ 1,800 people and Tioga 541, calculations show.

Lago will accumulate nearly $82.2 million annually in gaming taxes to Tioga’s $11.1 million, the numbers indicate.

“If you compare it based on the criteria in the legislation, 70 percent is on economic impacts and we have more than three times that impact in almost every measure,” Wilmot said.

Flaum proposals
The Wilmorite proposal and two other proposals involving Flaum Management Co. Inc. in Rochester represent combined totals of nearly $1.6 billion for three facilities projected to generate annual revenues of $750 million, create 5,700 permanent jobs and make their locations hotbeds of tourism and economic development.

A casino proposed by Flaum as part of Caesars Entertainment Corp. and Caesars Growth Partners LLC would bring an $880 million resort to the Hudson Valley, 50 miles from New York City.

The other Flaum proposal, submitted by NYS Funding LLC, is a $280 million casino on the Hudson River in Rensselaer overlooking downtown Albany.

Flaum’s Caesars New York casino in the Hudson Valley would attract 10 million visitors a year to the Catskills town of Woodbury in Orange County, generating $230 million in annual revenues, the application states.

The casino would include 300 luxury hotel rooms, 2,560 slot machines, 190 table games and 50 poker tables. The 115-acre site would have space for entertainment, business meetings, celebrations and World Series of Poker events.

It would have six restaurants, potentially including celebrity chefs associated with Caesars Entertainment Corp. facilities nationwide, the application states. Caesars owns or operates 53 properties, including destination and integrated resorts.

“Rather than a walled-off, inward-looking experience, Caesars’ recent developments are outward-facing in appearance and operations,” the application states. “Not only will Caesars New York make use of natural light and sweeping views of nearby Bear Mountain, but the business will operate in a way that is integrated into the surrounding community.”

The project will create 4,500 jobs directly, including 1,500 in construction, and 3,000 primarily union jobs averaging $50,000 yearly when the doors open for business, the application states.

Caesars New York plans to invest $10 million in the local community, including the development of two recreation fields with artificial turf, and $20 million to alleviate longstanding traffic problems in the immediate area.

Flaum’s other offering is a Hard Rock Hotel & Casino in Rensselaer with 1,500 slots, 50 table games and off-track betting, the application states. It would include 100 luxury hotel rooms, a 250-seat Hard Rock Cafe, an upscale steakhouse, a casual restaurant, a Hard Rock Center bar, a Rock Shop retail outlet and 1,500 parking spaces.

That casino will produce $260 million in annual gross revenue from gambling, the application states.

NYS Funding LLC, an entity of New York City private-equity firm Och-Ziff Capital Management Group LLC, has enough money to pay for the project without third-party financing, the application states.

The project will create 1,360 construction jobs directly or indirectly and 900 permanent jobs when the casino opens, the application states.

“As has been well-documented, the East Coast gaming market is becoming increasingly saturated,” it states. “Accordingly, it is critical for the Capital Region to have a gaming facility that will not simply be another ‘locals’ casino.

“On the other hand, a world-class gaming destination can still ‘grow the market,’ not just cannibalize existing gaming operations.”

The Caesars New York casino is among nine proposals for the Catskills/Hudson Valley area. The Hard Rock casino is one of five applications for the Capital Region.

Flaum Management CEO David Flaum did not respond to a request for comment on his firm’s two proposals.

7/11/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.




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