As one of eight contenders for the three available downstate New York casino licenses, the developers behind Freedom Plaza believe they have the best proposal of any candidate.
The $11.1 billion development being put together by Soloviev Group and Mohegan Gaming, projects $3.2 billion in annual economic input. Both figures are the highest of any of the three proposed Manhattan projects.
Michael Hershman, CEO of Soloviev Group, told CasinoBeats that Freedom Plaza would be the most beneficial to New York.
“From a capital investment standpoint, from a workforce standpoint, it is indeed the largest proposal. It would only be reasonable to assume that given the size of this proposal, that the state and the city will benefit more from the tax revenue standpoint than the other proposals.”
Freedom Plaza’s proposal includes a number of features beyond just a casino.
However, its opponents are focused on the negative externalities that casinos can bring to a community. These include gambling addiction and gambling-related crime.
Ray Pineault, President and CEO of Mohegan Gaming, is all too familiar with those concerns. He expressed that Freedom Plaza is making them a top priority of the project.
“There’s nothing more important to us than that people who come and enjoy the facility, the resort facility, are doing so in a fun and safe environment,” he expressed to CasinoBeats.
Freedom Plaza will be located in Midtown East Manhattan. It will span East 38th to 41st St.
The overall project is an $11.1 billion development that covers 6.3 acres of land. It includes:
The developers estimate that Freedom Plaza will create 17,000 jobs during its construction, with 8,000 jobs being permanent. They also estimate that the project will ultimately support nearly 40,000 jobs throughout the economy.
All-in-all Soloviev Group and Mohegan Gaming believe this proposal will generate the $3.2 billion in annual economic output.
“It’s got two residential towers on property. Almost 50% of the total number of units will be affordable housing. That’s also something the others don’t provide, daycare centers, medical facilities, a Wellness Center, and, very importantly, a community center, which will serve as well as the first of its kind, the Museum of Freedom and Democracy,” Hershman said.
“In addition to all of that, you know, we’re planning on a Community Investment Fund which will send literally hundreds of millions of dollars back into the community. The sort of money that they never imagined to be able to use as they see fit, whether it’s for community beautification, improvement of schools or sports facilities for youth.
“When you take all of that into consideration, I think we go way beyond some of the other proposals.”
Hershman also noted that Freedom Plaza will offering stock equity in the gaming facility to residents of New York City, allowing them to share in the project’s long-term success.
A recent poll conducted by Tulchin Research shows that nearly two-thirds of Manhattan residents support the Freedom Plaza project.
However, there are still those who are opposed to it.
One of the key reasons is a concern in the rise of gambling-related crime that would come through establishing a casino in the area.
Pineault believes those concerns are misguided, stating: “It’s a misnomer that that resort operations like we’re proposing actually raise crime. There’s many studies out there that are contrary to that. You’re never going to please 100% of the people 100% of the time.”
“But, providing a safe environment for our guests, for our team members, and for the community is of the utmost importance to us. We have security professionals that we’re bringing on as part of this project and making sure that we’re providing a safe and fun environment for everyone.”
One such study on the matter comes from the National Institute of Justice. In April 2003, it looked at if the presence of casinos increased crime in a community.
The study found, “overall, casinos do not have any systematic effect on crime.” It went on to note that the success of the casino ends up being important to the well-being of the community, thus leads to greater protection from the community as well as local law enforcement.
“It will impact crime, but in a positive fashion, because we’re planning probably the most sophisticated security, both in and around this development, that will exist,” Hershman said of the Manhattan casino. “We’re coordinating very closely with New York City Police Department to put a police substation on site.”
Another study done by UNLV Gaming Research & Review in 2012 assessed the crime volume in the city of Detroit following the opening of three commercial casinos in 1999 and 2000.
The study concluded that there was no indication to suggest the volume of crime increased in Detroit as a result of the casino openings.
Other opponents of Freedom Plaza cite concerns related to an increase in gambling addiction or problem gambling in the area.
Pineault has a lot of background in that area. The Mohegan Sun opened in Connecticut in 1996 and has been operating for nearly 30 years.
In his time with Mohegan Gaming, Pineault has sat on the board of the National Council on Problem Gambling. (NCPG) The company is also a contributor to the Connecticut Council on Problem Gambling.
“To have people who have issues (with gambling addiction), it does not do any good for the industry,” Pineault said.
“So, it is part of our ethos and DNA to make sure that we’re addressing those. There is a small percentage of the population that has issues with gambling addiction. It’s now been rightfully identified as an addiction along with drugs, alcohol, and other things. I was on the board when that happened, and I was very proud to see that happen.”
The opening of a new casino leading to more problem gambling also may not be entirely true.
Reporting from the Reason Foundation says that states which legalize gambling activities could see short-term spikes in problem gambling. However, if they rise, they tend to stabilize within a few years, aligning with global averages.
The site used Maryland as an example. In 2010, without legal casinos, 3.4% of adults met criteria for disordered gambling. In 2017, after the introduction of six casinos, the rate fell to 1.9%.
Pineault noted that Mohegan Gaming is a large contributor to a program at Yale University that is designing a mobile application to help those with limited resources get access to problem gambling help. He hopes that application will roll out in the next 6-12 months.
When it comes to Freedom Plaza, Pineault says the developers are committed to providing proper resources to combat gambling addiction.
“We’ve actually partnered with a New York problem gambling nonprofit organization to make sure that we’re working together when we’re addressing those issues,” he said.
“We’re addressing people that have problems and we’re and we’re working on programs that not only deal with addressing the issue, but prevention as well.”
The National Council on Problem Gambling estimates that 2.5 million US adults are estimated to meet the criteria for a severe gambling problem in a given year. That represents 1% of the population.
Another 5-8 million would fit under the category of mild or moderate gambling problems.
While the NCPG states the casinos are not to blame, comparing them to a liquor store being responsible for creating alcohol problems, there is still cost involved.
The NCPG estimates the annual national social cost of problem gambling is $14 billion. That total incorporates a number of factors. They include:
That amount spans the entire US, which has nearly 500 retail casinos across the country. It also includes online casinos, sports betting, horse racing, and any other formers of regulated or illegal gambling.
The addition of three New York casinos, including the potential of Freedom Plaza in Manhattan, is sure to aid in that number rising to some degree.
However, the financial impact it will add will fall well shy of the proposed $3.2 billion in annual economic output for the state of New York.
Because of that financial impact for Manhattan and the state, Hershman believes Freedom Plaza can be a game changer.
“I am a native New Yorker, born and raised in Brooklyn. New York City is the center of the universe. I want to keep it that way,” he said.
“In order to maintain our status as the center of the universe, or the greatest city in the world, you’ve got to continue the progress. You’ve got to continue to offer people new and better things to do when they come to Manhattan. For me, it’s kind of a legacy project, and one that that I’m proud to be involved with.”
The New York State Gaming Commission expects to award three casinos licenses by the end of 2025. Pineault believes with all the information, Freedom Plaza should be one of them.
“When I look at the plans, whether it’s in Manhattan or any of the others that I’ve seen thus far, this is by far and away the project that’s going to provide the most benefit to Manhattan, the most return to the city, and to the state,” he said.
“If the state were to look at it objectively, I’m cautiously optimistic that this is the plan that they would have to choose, because it’s in the best interest of all of the residents and citizens of the state.”
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