Aqueduct: More Flake Flak

Minister Withdraws as Investor in Aqueduct Casino

The Rev. Floyd H. Flake, one of New York’s most influential black pastors, announced on Tuesday that he had removed himself as an investor in the company that was chosen by Gov. David A. Paterson to build and operate a casino at the Aqueduct racetrack in Queens.

The move came on the same day that the company with which Mr. Flake had been involved, Aqueduct Entertainment Group, was required by the state to provide extensive financial documentation regarding its smaller investors. State Lottery Division officials said they were sifting through the material, and would not comment on whether the company had met the requirements of the filing deadline.

The developments, the latest in a troubled eight-year process to develop a casino in Queens, raise another potential problem for the state budget, facing a deficit of roughly $9 billion in the fiscal year that starts April 1. Should the deal fall apart before a March 31 deadline, the state would lose a $300 million up-front payment from Aqueduct Entertainment.

Jeffrey Levine, a partner in Aqueduct Entertainment, said the company remained committed to obtaining state licensing of all its investors by month’s end and had access to the needed cash. The group’s primary investors include Mr. Levine, a Queens developer, and others with deep experience in gambling and large-scale construction.

Because of his political stature, Mr. Flake’s small financial stake in the company took on an outsize role in the controversy surrounding the selection process. As pastor of the Greater Allen A.M.E. Cathedral of New York in St. Albans, Queens, his endorsement is seen as influential among thousands of parishioners.

In January, Mr. Flake met with Mr. Paterson three days after the governor announced the selection of Aqueduct Entertainment. Mr. Flake, who had made public comments supportive of a candidacy for governor by Attorney General Andrew M. Cuomo, has said the discussion touched upon whether he might welcome an election bid by the governor.

The State Senate had long supported the selection of the Flake group. The president of the Senate, Malcolm A. Smith, is a protégé of Rev. Flake’s. But the Assembly speaker, Sheldon Silver, resisted, and he insisted on several conditions before supporting Mr. Flake’s group. Investigators have subpoenaed records from Mr. Paterson’s administration related to Aqueduct Entertainment’s selection.

Whether or not his administration played a role in the initial selection, Governor Paterson no longer needs Mr. Flake’s endorsement. Amid a swirl of investigations that are also exploring his intervention in a domestic violence case involving a close aide, the governor recently said he would not seek election.

Answering reporters’ questions in Albany on Tuesday, Mr. Paterson said he had recused himself from the Aqueduct negotiations, following the advice of his lawyers. Asked whether he still thought Aqueduct Entertainment was the right choice, Mr. Paterson said he “certainly thought it was right at the time.” “Whether or not they are able to comply with the protocols is the same problem that one of the other companies was unable to do last year, and so we’ll just wait and see whether that application is valid,” the governor added.

The last deal to build the casino, centered on video lottery terminals, fell apart one year ago, when the company that had been selected, Delaware North, could not raise $370 million it needed to pay the state.

A spokeswoman for Mr. Flake said he was unavailable for an interview. In a prepared statement, Mr. Flake said he withdrew because the bid had become a distraction from his oversight of the church’s many operations, including a school, housing for the elderly and retail facilities.

“Unfortunately, my ongoing participation in Aqueduct Entertainment has become a distraction that has taken me and my attention away from the community projects I created and nurtured,” the statement said.

Mr. Levine said Mr. Flake was concerned that details of his private finances would become public. The rapper Jay-Z, who had planned to hold a stake of less than 1 percent in the company, as had Mr. Flake, has also withdrawn, Mr. Levine said.

Mr. Flake said in a recent interview on NY1 that he would not be involved in the gambling aspect of the project, but in possible future real estate development, including moderately priced housing, on the Aqueduct site.