Aqueduct RFP: Peebles and Delaware North

Delaware North donated $1,000 to Sheldon Silver on April 16, 2009.

Aqueduct Responses Submitted May 8, 2009.
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Delaware Norths May 8, 2009 response indicated that its group was comprised of
Delaware North, a privately held entertainment company;
Saratoga Gaming and Raceway, a New York raceway and gaming company;
McKissack & McKissack, the oldest African-American and women-owned professional design
and construction firm in the nation; and,
the Peebles Corporation, the countrys largest African-American real estate company.

Bissett soon learned that the Peebles Corporation had submitted its own separate proposal and, on May
12, 2009, Bissett sent a letter to Baron Channer of Peebles memorializing that Peebles no longer wished
to be part of Delaware Norths bid.

Initially unbeknownst to its putative partner, Delaware North, the Peebles Corporation (Peebles)
submitted a separate proposal on May 8, 2009. The bidding consortium also included MGM Mirage as
the gaming operator, and Harbinger Capital as the financing partner. Peebles offered an upfront licensing
fee of $150 million payable in full 10 days after the signing of the MOU.
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Peebless Gaming Partner MGM Under Investigation New Jersey Peebles was delinquent in its
application submissions and unresponsive to repeated requests from Lottery to provide the requisite
information. More importantly, Allen confirmed that Peebless gaming partner, MGM, was under
investigation by the New Jersey Casino Control Commission, an issue relevant to MGMs licensure in
New York State because Lottery weighs heavily, as part of the licensing process, the status of a potential
licensee in other jurisdictions. The New Jersey investigation stemmed from MGMs half interest in the
Borgata in Atlantic City, New Jersey, and its efforts to obtain a gaming license there.

In regard to Peebless pre-licensing status, it states, Lottery: Does not recommend that Peebles is
qualified to receive a VLT license due to refusal by equity investor Harbinger to submit prequalification

Lottery considered Peebles unlicensable because its members had not submitted the necessary licensing
applications.

In regard to Peebles and Penn National, Senator Sampson similarly testified: Let me just tell you from
what I recall, was during one of our meetings, we had all spoke about the Speaker, myself, the
Governor, who we thought were viable in this whole process, and it had to be before Wynn dropped out,
because it was Wynn; it was AEG; it was S&L [sic] Green and Delaware North. Penn was a slot in the
box, and we all kind of agreed to that. They had labor problems, so that was a big thing. New York is very
labor controlled. Don Peebles, you know, just didnt pass our muster.

Indeed, although it was readily apparent that Peebles, Penn National and Delaware North were never truly
considered viable options, these bidders, uninformed of their impotent status, continued to supplement
their submissions upon request and incur further expense to participate in a selection process from which
they had already been eliminated.

Governor Paterson similarly testified that after this assurance from Lottery he understood that, Peebles
was still not in compliance. I dont even believe that they met the deadline, but that AEG now was in
compliance.

Murra: But again, at that point during the time line, the Lottery did not believe that either AEG or
Peebles were seriously in the competition and nothing that David Rose or anybody else told me made me
think that they were seriously in the competition.

The two vendors not included in this analysis are Wynn and Peebles. Wynn dropped out of the process in
the fall of 2009 and Peebles failed to make filings necessary to remain a contender in the process.
These strategic contributions underscore 236 the predominance of politics divorced from the public
interest which permeated every aspect of the selection.