Vornado to join New York competition for new casino development at Hotel Pennsylvania
Vornado Realty Trust, New York’s second-largest commercial landlord, is weighing whether to bid on a casino license at the site of Hotel Pennsylvania near Madison Square Garden. The hotel is soon to be demolished and the real estate company is poised to join the city’s great competition for the property. The first round of questions from prospective bidders is due on February 3, with each bid costing applicants $1 million.
Penn Station project:
According to Gov. Kathy Hochul‘s redevelopment proposal anticipating the shuttered hotel area to be subsided by a new Penn Station, Vornado is designated to develop five of eight office sites upon the hotel building demolition expected to be completed by the end of the year. Vornado, which is expected to submit a casino bid for the new property, told The New York Post: “We are studying the possibility of applying for a casino license [in the Penn Station area], but we have no deal in place.”
Vornado spokesperson also said: “Our most important criterion for any project is that it meets the economic development objectives and produces the transit and public improvements set forth in the state’s General Project Plan,” which, according to the statement, Vornado fully supports for the Penn district.
Possible partnership:
The New York Post’s source confirmed that Vornado chairman Steven Roth is talking to Midwest gaming mogul Neil Gary Bluhm, the managing principal of Walton Street Capital, about a possible partnership in the emerging deal. Bluhm, 84, owns or is a partner in several first-class commercial properties and casinos in New York, Pittsburgh, Chicago, and more, and has a net worth estimated by Forbes at $6 billion.
Three casino licenses to be issued:
As the first round of questions from potential bidders is set for February 3, Vornado will have to act quickly and decide upon the partnership. Though no date for submissions of applications has been set yet, three casino licenses are expected to be issued at downstate locations. If Vornado decides to compete for the casino license, it will surely face the old rival SL Green, the city’s largest commercial landlord, among other bidders for this attractive location.
Competition:
SL Green has already partnered up with premium casino operators, such as Caesars Entertainment or Wynn Resorts, at the most prestigious city locations, such as Times Square and Hudson Yards. SL Green will not miss a chance for another New York expansion, as well as Larry Silverstein, the owner of his so-called Mercedes-Benz site on Eleventh Ave, whose last-minute bid is also expected. Each bid will cost applicants $1 million, but the state has not revealed when it will decide on the winner.
$306 billion project:
However, the uncertainty about the Vornado‘s next move originates from the last month Roth’s statement that the time was not right for new casino developments near Penn Station. Also, Gov. Hochul has not recently mentioned the prospective $306 billion project to complete in 20 years. The project was not included in the governor’s New York agenda listing 147 initiatives for the state. However, the public may get a clearer picture on February 3, when the bidders shall submit their first questions about the Penn Station development.