Vornado eyeing NYC’s casino sweepstakes

Steve Roth’s REIT weighs bid for Hotel Pennsylvania site

Vornado Realty Trust chairman Steve Roth and 401 Seventh Avenue (Getty, LoopNet, Vornado Realty Trust)
Vornado Realty Trust chairman Steve Roth and 401 Seventh Avenue (Getty, LoopNet, Vornado Realty Trust)

A significant date is approaching in New York’s great casino race, yet the field continues to grow.

Steve Roth’s Vornado Realty Trust is considering a bid for one of the three available casino licenses at the site of Hotel Pennsylvania near Penn Station, a person familiar with the situation told the New York Post. The hotel at 401 Seventh Avenue is being demolished.

Walton Street Capital managing partner Neil Bluhm, a billionaire investor in several other casino and entertainment properties, is in touch with Roth about the project.

Vornado was previously reported to be considering bidding for a license in Herald Square, though bidding for one at the Penn District has been floated as a well to diversify an office-heavy project.

A spokesperson for the company confirmed to the Post the real estate investment trust was exploring a bid, saying it’s essential for any project to “meet the economic development objectives and produce the transit and public improvements set forth in the state’s General Project Plan.”

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That plan is connected to the controversial Penn Station megadevelopment. Empire State Development approved a plan for 10 new commercial towers in the district, which will fund the renovation and expansion of the critical transit hub.

The development is expected to yield 18 million square feet of new commercial space and at least 1,172 apartments. Five of the development sites are owned by Vornado.

The project plan has sparked legal action. In October, community groups and tenants living in buildings facing demolition sued ESD for failing to answer basic questions about the project, alleging Vornado improperly influenced the project. The lawsuit calls on the court to annul the state agency’s approval of the project plan and its final environmental impact statement.

The state is giving out three downstate casino licenses, which has brought out a veritable who’s who of Big Apple real estate players pursuing a piece of the action. SL Green, Related Companies, the Soloviev Group, Thor Equities and New York Mets owner Steve Cohen are among those exploring bids. Recent weeks have seen the Las Vegas Sands and Saks Fifth Avenue owner Hudson’s Bay Company join the fray.

Two sites, Aqueduct Racetrack and Yonkers Raceway, appeared to have a leg up on the competition, as they already have gambling.

Prospective bidders are expected to answer a first round of questions by Feb. 3. The deadline for applications has not been set.

— Holden Walter-Warner