MGM Empire City Withdraws Application for Yonkers Casino Permit

The parent company of the MGM Empire City in Yonkers, N.Y., withdrew its application Tuesday for a downstate casino permit, stating that the returns just wouldn’t be worth the investment.

The proposal to build a full-fledged gaming facility in Yonkers, replacing the existing MGM Empire City “racino” there, was one of the first applications to pass the gauntlet of community approval in September. But MGM’s executives now say they believe the New York tri-state area is too small for three casinos.

“Since submitting our application in June, the competitive and economic assumptions underpinning our application have shifted, altering our return expectations on the proposed $2.3 billion investment,” a statement from MGM said. “The newly-defined competitive landscape — with four proposals clustered in a small geographic area — challenges the returns we initially anticipated from this project.”

But there is also another problem, according to MGM.

MGM Resorts International was expecting to get a permit that would be good for 30 years, but new guidance from the New York State Gaming Commission states that the company would only be eligible for a 15-year license, according to the hospitality giant.

It’s unclear what MGM’s withdrawal means for the remaining three applicants for the three licenses the Gaming Commission is expected to award before the end of the year, as the body did not immediately respond to a request for comment.

“Taken together, these events result in a proposition that no longer aligns with our commitment to capital stewardship, nor to that of our real estate partner in Yonkers,” MGM’s statement concluded. “The property has generated more than $5 billion for New York State education, including $1.6 billion under our ownership. We know our decision will impact many individuals; we remain committed to operating the property in its current format, and believe it will continue to enjoy success serving customers in Yonkers and the surrounding communities.”

Yonkers Mayor Mike Spano was scathing in his reaction, seeing the decision as “nothing short of a betrayal to the people of Yonkers and Westchester County,” PIX11 reported.

“Our city has stood ready with the workforce, the infrastructure, and the overwhelming public support for full gaming at Empire City,” Spano said. “MGM’s blaming [the] New York State Government for their withdrawal rings hollow. The same rules apply to the other bidders. Why aren’t they pulling out as well?”

The $2.3 billion would have gone toward expanding MGM Empire City’s current facility at 810 Yonkers Avenue into a 863,500-square-foot gaming, racing and entertainment venue, and included $100 million from the developers for infrastructure upgrades such as green space and traffic mitigation.

Four out of eight original downstate casino proposals had made it past a Community Advisory Committee to the Gaming Commission. With MGM’s withdrawal, now only three remain in the running for those three available permits: Resorts World New York City by Genting, Metropolitan Park by New York Mets owner Steve Cohen, and Hard Rock Entertainment and Bally’s proposal for a resort near Ferry Point Park in the Bronx.

Mark Hallum can be reached at mhallum@commercialobserver.com.