BLOG VIEW: When we last checked in on New York Gov. Andrew Cuomo in January, he was still displaying the outrageous sense of self-aggrandizement and bad planning that plagued his disastrous tenure as Bill Clinton's Secretary of Housing and Urban Development. Today, I can report that he is feverishly at work in his reign of error.
Back in January, Cuomo used his annual State of the State address to propose the demolition of the Javits Center – New York City's top spot for conventions, trade shows, consumer shows and special events – and build a 3.8 million square-foot center next to the city's Aqueduct Racetrack that would become the nation's largest convention site.
Never mind that the Javits Center has no problems attracting major events – it hosted the publishing industry's Book Expo America last week, and it will present the International Franchise Expo later this week – or that Aqueduct Racetrack is located in a section of the city that is ill-equipped to accommodate convention traffic.
Needless to say, Cuomo received a flood of media attention for his grand commercial real estate plans. But as the months passed, there were no updates. On June 1, Cuomo finally provided a status report on the plan – albeit in a barely publicized appearance on a none-too-popular AM radio talk show in New York. According to Cuomo, talks broke down between the state and the Genting Organization, the Malaysian-based group that was picked to develop the new convention center, and the plan was dead.
But Cuomo was not about to let this bad idea go to the grave. He also announced that his office was talking to other developers to create a new convention center in another part of New York City. The key part to any new convention center, Cuomo added, will be the presence of a full-blown casino on the premises.
That all sounds peachy, except that it is currently against the law. Right now, New York casino gambling is limited to American Indian tribal lands. The state's horse racing tracks can only operate gambling halls with electronic gaming machines – Aqueduct has a casino with 5,000 video gambling terminals and electronic table games that is operated by the Genting crowd. However, New York voters will consider a referendum in November that would change the law and enable private companies to build and operate casinos in the Empire State.
So, you may be wondering: What does casino gambling have to do with convention centers? After all, New York City has attracted conventions and trade shows for decades without the need for roulette wheels or blackjack dealers. Why should Cuomo insist on linking these two seemingly unrelated concepts together into a single development?
Well, it appears that The New York Times found the answer. Genting is Southeast Asia's largest gambling company, and it has been providing very generous trans-Pacific support to the cause that is nearest and dearest to Cuomo's heart: shameless self-promotion. Last year, Genting gave approximately $400,000 to the Committee to Save New York (CSNY), a lobbying group that has flooded New York's radio and television statements with advertisements praising Cuomo's work as governor.
The New York Gaming Association, a trade organization co-founded by Genting and other gambling industry companies, provided an additional $2 million to finance the CSNY's advertising blitz.
Richard Bamberger, a Cuomo spokesperson, took umbrage at the notion that Genting could somehow influence the governor's decision to insert casino gambling into a convention center.
‘To try to suggest an improper relationship between the governor and gaming interests is to distort the facts in a malicious or reckless manner,’ Bamberger said to the Times.
Oh, really? Perhaps Bamberger forgot that Cuomo's office gave Genting an exclusive crack at the failed Aqueduct endeavor – there was no request for proposals or competitive bidding on the project – or that the New York Gaming Association is leading the lobbying to change the state's law and allow private ownership of casino gambling establishments. Funny, but Cuomo never called for changes in the gambling law while he was a candidate for governor in 2010, nor did he seek such changes during his previous stint as New York's attorney general.
Of course, if Cuomo were serious about expanding commercial real estate opportunities in New York City, he would place a greater focus on developing affordable multifamily housing. According to the Council for Community and Economic Research, the cost of living in Manhattan is 128% higher than the national average, making it the most expensive real estate market among the 306 cities tracked by the council's researchers. The No. 2 two location on the council's list was Brooklyn, right across the East River from Manhattan, while Queens was No. 7 on the list.
But hey, maybe Cuomo will pay attention if all the people who cannot afford to live in New York City will pool their money and help the CSNY create new advertisements trumpeting Cuomo's greatness. When it comes to dealing with Cuomo, flattery and money will get you everywhere!
– Phil Hall, editor, MortgageOrb
(Please address all comments regarding this opinion column to hallp@mortgageorb.com.)
