Casino called best industry for Governors Island Gambling expected to generate revenue of $57.5 million a year

July 21, 1998|By Douglas Martin | Douglas Martin,NEW YORK TIMES NEWS SERVICE

NEW YORK -- A new study commissioned by the mayor's office to look at the future of Governors Island has concluded that a high-class gambling casino would provide the most revenue of any development option being considered - more than enough to meet the expense of preserving the historic northern part of the island.

The study by the consulting firm of Coopers & Lybrand showed that a casino could generate as much as $57.5 million a year, more than three times as much money as the combination of a hotel and conference center with residential development. Other uses generated even less.

The island in New York Harbor, which is owned by the federal government, contains a number of historic buildings and offers stunning views of lower Manhattan, but it has been largely deserted since the Coast Guard shut down its operations there almost a year ago. President Clinton offered to turn the site over to New York provided the city and state could come up with a redevelopment plan that would benefit the public.

Parks advocates, preservationists and some politicians have urged the city to come up with proposals, fearing that otherwise the government might sell the island to the highest bidder. But the mayor has repeatedly said the city could not afford the cost of restoring and maintaining the historic buildings unless the development plan generated significant revenues.

'Some reality into a dream'

Mayor Rudolph Giuliani said the city's major concern was to avoid "hundreds of millions of dollars of liability" if it accepts the president's offer. "The purpose of this is to put some reality into a dream that has been largely unreal," Giuliani said. "Preliminary to doing something useful with Governors Island is knowing how much it will cost. It will cost a huge amount of money."

Gambling could be the source of that money. A separate study by the investment firm of Bear Stearns & Co., which was conducted independent of the city's study, estimated that a casino on Governors Island would attract 5.7 million visitors a year and generate $340 million in revenues.

But several hurdles must be removed before anyone pulls a slot machine lever there. Gambling is still illegal in New York state, and to change the law, two separate legislative sessions must pass an amendment to the state constitution and voters in New York City must vote in a referendum. In Washington, city legislators worried that Clinton or Congress might retract the offer to New York if casino gambling was in the island's future.

"There is a strong contingent in Congress that hates gambling," said Rep. Carolyn Maloney.

Rep. Jerrold Nadler said, "As long as the mayor keeps talking casino, he's stopping the process."

These two Democratic representatives are sponsoring a bill to ,, set up a commission composed of federal, state and city appointees to address the island's future.

Other ideas sought

Deputy Mayor Randy Levine said that the city was still interested in other options, and would soon request ideas from housing and commercial developers, as well as casinos. He said that a group from Tivoli Gardens, the Copenhagen amusement park, visited the island.

Giuliani said the city estimates the annual cost of maintaining the island at more than $40 million. In addition, he released a report on public works improvements prepared by the consulting firm of Frederic R. Harris Inc. for Turner Construction Co. under a city contract. It showed that the cost of improvements to roads, utilities and piers, among other things, would range from $20.5 million to $45.3 million, depending on the option chosen.

This study concerned, as did the analysis of economic benefits, only the 25 southernmost acres on the island, which were built on landfill from the Lexington Avenue subway. Neither study involuded any acquisition costs, though Giuliani said he feared that a budget-conscious Republican Congress would never allow Clinton's $1 offer to become law - particularly when existing federal legislation mandates its sale for $500 million.

The gambling projection includes 100,000 square feet of gambling space; a 1,000-room hotel; 2,200 gambling positions, including 1,500 slot machines and 120 tables, and a luxury spa and health club. A 24-hour ferry service was assumed. In addition, the study suggested that other residential and commercial possibilities could coexist with the casino, adding to the economic benefit.

Opposition to gambling remains strong in New York state, however, cutting across class, ideology and religion. Nadler suggested some of the basis for the antigambling sentiment when he asked if the city considered noneconomic factors in its study. "Did they factor in the costs of additional child abandonment, divorces and bankruptcies?" he asked. "Those things always happen."

Others also faulted the city for not taking more factors into account. Peg Breen, president of the New York Landmarks Conservancy, which has urged more open dialogue about Governors Island, said the city's study raised more questions than it answered. "Will we even get gambling?" she asked. "How long is it going to take? What happens to the island in the interim?"

But the mayor seemed persuaded on the economics of gambling for Governors Island, though he acknowledged that political difficulties remain.

"There are probably other attractions," he said. "The one that works on paper is gaming."

Pub Date: 7/21/98

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.