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Will Casino Gold Rush of 1970s Replay in Coney Island?

Posted in Real Estate, Redevelopment, tagged Aqueduct, casino, Charles Denson, Coney Island, gambling, Genting, Governor Cuomo, New York on January 10, 2012| 2 Comments »

Last week, when Brooklyn Borough President Marty Markowitz called Coney Island “a natural” for casino gambling, and said it would bring jobs and revenue, he gave voice to what Coney Islanders with long memories have been talking about since Governor Cuomo proposed legalizing casino gambling in New York. It brings back memories of the late 1970s when “Casinos Mean Jobs- Let the People Decide” was the slogan of a group of Coney businessmen who lobbied Albany. Will the casino gold rush of that era, which finally ended when Governor Carey nixed the idea of a referendum, replay in Coney Island and set off another wave of real estate speculation?

A chapter in Charles Denson’s book Coney Island: Lost and Found vividly documents the “casino fever” that seized Coney after casino gambling was legalized in Atlantic City in 1976 and the New York State Legislature began studying the idea. A billboard saying “Welcome to Coney Island, The Perfect Resort for Casino Gambling” was put up by a local business group writes Denson, who worried that casino gambling would wipe out the amusement area and wouldn’t benefit the neighborhood. He notes that “for a brief period during 1979, the asking price for property on the Boardwalk rose from $3 to $100 per square foot.” Interviews with Horace Bullard, whose Shore Theater was said to have caught Frank Sinatra’s eye, as well as with Astroland owner Jerry Albert and realtor Charles Tesoro portray the “Casinos for Coney” mania that prevailed during a four-year period.

“It was crazy,” Tesoro told Denson. “Limousines would pull up with guys coming up to the office from Las Vegas, in silk suits, saying, ‘sell to us now, get us some property, we wanna get in!’ It was like a crazy house, like the gold rush…They’d sit at my desk and say, ‘Waddaya got? We want options on everything you got. Everything!’ They wanted options because if gambling didn’t go through, they’re out. But if gambling went through, they’d pay triple the asking price for the property.”

One of the reasons gambling didn’t go through was behind-the-scenes lobbying of politicians by the Trumps, who were already involved in Atlantic City, Tesoro and others say in Denson’s book.

Detail of the CIDC's Coney Island Retail Opportunities Map. Fall 2011. Green = Property for Sale, Blue = Property for Lease

Coney Island for Sale: Detail of the CIDC's Coney Island Retail Opportunities Map

When we first read that Governor Cuomo proposed legalizing casino gambling in New York and Mayor Bloomberg said as long as New York City shares in the revenue, we bet Joe Sitt began dusting off his Vegas-y renderings for the south side of Surf in anticipation. And we imagined that the mostly vacant, fantastically high-priced properties for sale or lease in Coney Island would sit empty for another couple of years, until the referendum on casino gambling could be put to a vote. That won’t happen until November 2013 at the earliest.

Horace Bullard still owns the Shore Theater, which currently has an asking price of $13 million, and his Thunderbolt parcel, a three-acre development site next to the Cyclones stadium, is up for grabs too. On the north side of Surf, there are the infamous furniture stores in buildings with price tags of $5.4 million and $3.39 million. These sites are among the 24 privately owned properties for sale or lease on the CIDC’s map of Coney Island Retail Opportunities Fall 2011, now called Coney Island Property Opportunities Winter 2011-2012. Will the map morph into Coney Island Casino Opportunities in 2013?

Coney Island for Lease: Detail of the CIDC's Coney Island Retail Opportunities Map, Fall 2011

The Washington Baths property, which Bullard acquired during the casino gold rush and later sold to Joe Sitt, who in turn sold it to Taconic Investment Partners, which got it rezoned for high-rise condos, would make a dandy casino complex. The 5.5 blocks of vacant land is just west of MCU Park. Blackjack and Baccarat on the Beach? Taconic also has a 99-year lease on the landmarked terracotta palace on the Boardwalk that was once the Childs Restaurant.

The monkey wrench in the plan for a Coney casino is a possible demand by Genting, which already operates a racino at Aqueduct, to ask the state for exclusive rights to casino operations in New York City. However, Governor Cuomo’s spokesman told the Post, “There’s no agreement on exclusivity.”

The Associated Press reports Malaysia-based Genting spent more than $774,000 on New York lobbying in the first 10 months of 2011, or 10 times its total for 2010. Their lobbyist is SKDKnickerbocker, the same firm that represents Thor Equities, Mayor Bloomberg, and other high-powered clients. Coney Island has already been impacted, and not in a positive way, by Genting’s venture at Aqueduct. The displaced Aqueduct flea market vendors moved to Thor Equities Stillwell Avenue property last summer. Their dismal debut was billed as a “festival” because a flea market is not a permitted use in Coney Island’s amusement zone.

September 2005: Thor Equities rendering in NY Magazine's The Incredibly Bold, Audaciously Cheesy, Jaw-Droppingly Vegasified, Billion-Dollar Glam-Rock Makeover of Coney Island