Vornado Realty Trust is a large commercial real estate company located in the United States that recently showed interest in developing a casino in New York City. In an annual shareholder’s letter, Chairman and CEO of the company, Steven Roth, commented on how the company has been considering such a development.
Details of the Letter
In the letter, Roth commented on how the company has been approached about the potential project. Earlier in the year, reports surfaced that discussed a gaming venue in Midtown Manhattan. The company was considering a project in Herald Square.
The area would be a nice spot for a casino as it would be located near major thoroughfares including Broadway, 34th, and 47thstreets plus 6th Avenue. Roth said that Manhattan has the largest number of hotel rooms, tourist attractions, restaurants, and museums, plus the transportation network uses the region as its hub. The company has heard chatter about the potential developer and has been approached to work on it.
It is unclear as to what gaming company might have approached Vornado to consider developing the casino. Bally’s Corporation, Wynn Resorts, and Las Vegas Sands are all reportedly looking to obtain the third casino license that is held for New York City.
For Vornado, the competition will be tough when it comes to a casino venue in the Manhattan area. Several real estate companies want in on the action. One, L&L Holding Co. is even said to be considering the same area of Herald Square.
Another issue comes about if the Las Vegas Sands or Wynn Resorts earns the permit. If they do, the companies might not want to take on a landlord and have to worry about rent obligations. In the United States and internationally, both of these companies own and operate all of their gaming venues. Neither one works with real estate investment trusts to create casinos.
It is also unclear as to if Manhattan will be the home borough for the new casino. In earlier reports, it was indicated that Westchester and Nassau counties were the more obvious choice. This leaves areas like the Bronx, Brooklyn, Staten Island, and Queens as potential casino spots.
According to the Vornado CEO, it makes perfect sense for the third license to go to the Manhattan area. Because Manhattan is the center of everything, a casino there would be able to generate the most revenues. The money could then be used to help the education system.
So, what comes next? Will the third license be handed out soon? The state recently passed its fiscal budget, and it allows the third casino to come about. There are three licenses up for grabs, but it is pretty much set in stone that the Empire City and Aqueduct Raceway will be given the permits.
We shall see in the coming weeks if more movement takes place involving the third license. Will the major operators start to provide proposals as to what they will offer NYC if they are chosen? It will certainly be interesting to see who claims the license and where the casino ends up, be it in Manhattan or another area.