The Stoler Report with Michael Hershman

0:01 Speaker 1 Good morning. This is Mike Stola for the Stolar Real Estate Report on the Cats round table casinos downtown in Manhattan, perhaps maybe Coney Island, maybe the Hudson Yards. So I don’t really know the answers. I’ve done a lot of research on it, but I’ve been able to bring together this morning the man who’s really involved with the casino business.

0:23 He’s planning to open up a casino on First Avenue. His name is Michael Hirshman. He’s the CEO of the Soloviev Group.

0:31 Speaker 2 Correct, that’s right.

0:33 Speaker 1 Okay, thank you for being here this morning.

0:35 Speaker 2 It’s my pleasure. Good to see you.

0:36 Speaker 1 Thank you. So let’s talk about what Soloviev is planning to do on the site that they own on First Avenue.

0:43 Speaker 3 Well, we’re planning on building an integrated resort. People talk about casinos, but it’s only a very small part of what we want to develop there. In fact, it’s less from a square footage standpoint, the casino will be less than ten percent of the entire square footage. To build it below grade, it’ll be virtually invisible from First Avenue.

1:06 And we’re going to build a hotel with twelve hundred and fifty rooms. We’ll have a five acre park, a museum, and two residential towers with over five hundred affordable housing units in it. So it’s a major ten billion dollar project that happens to have a casino in it.

1:23 Speaker 1 So let’s talk what the property was before and before the company’s name was changed. It was Sheldon Solo who was the patriot of the company.

1:33 Speaker 2 Of a here.

1:34 Speaker 1 Do you think Sheldon would have done a casino or this total complex, because as you say, it’s not only a casino, it’s a variety of different venues.

1:44 Speaker 3 I think that if it made economic sense, he would have considered a casino. He purchased the property, as you know, twenty somewhat years ago from con Edison. It was a plant and the property was remediated. Part of it we built on. We built a condo and residential tower on part of the property six to eighty five First Avenue,

2:08 but the remain the six point seven acres is shovel ready and it’s undeveloped. Although right now we have an art exhibit called Field of Lights on the property. We can begin building because we have zoning for four towers, a commercial tower and three residential towers.

2:27 Speaker 1 Are you qualified under the four twenty one a’s or the four eighty five X program today to build.

2:34 Speaker 3 Not in terms of affordable housing, yeah, neither. When we got our zoning for the residential towers, neither of those applied, and so our efforts to put affordable housing in the two residential towers now is a voluntary effort.

2:52 Speaker 1 Now, how do you get Mohican Sun to be your partner in this deal?

2:56 Speaker 3 Well, I interviewed a number of casino operators, some of the big names, the Sayans and the Caesars and others, all of them very large public companies and very profitable companies. I also interviewed the mohigan A Sun tribe, and of course, as you may know, they have the largest casino operation in the Northeast in Connecticut. And I found them a

3:24 family organization very much imbued with the same sort of philosophy we have about social responsibility, giving back to the community.

3:35 Speaker 1 Right, you’re offering a back a payment to the community.

3:40 Speaker 3 We’re going to devote five percent of our net operating profit to the community that we’re building in and they can use that in any way they want, whether they want to build parks or take care of the schools, in the district. It’s going to be hands off. We’re just going to give the money direct do them.

4:01 Speaker 2 Okay.

4:02 Speaker 1 Well, with regard to sports betting, if you have a license, you’ld be able to do sports betting in New York now, correct? And when do you foresee perhaps the acceptance of the program, because you do, as I noted before, you have competitors over here.

4:19 Speaker 2 We do have competitors.

4:21 Speaker 3 The license will not be grounded until the end of twenty twenty five, which was a far longer period of time than we had anyone had anticipated, because, as you may know, the legislature in New York State approved the three day gambling licenses almost two years ago. Right now, the applications will not be submitted until June, and the

4:45 licenses not till December of twenty twenty five.

4:48 Speaker 1 What about the potential traffic problem, So.

4:53 Speaker 3 We did a traffic analysis. We hired a company to do kind of an independent survey. And I should point out that the way we’ve designed this integrated resort, there’s no vehicular entrance on First Avenue. The entrance to the casino is off the service road of the FDR. The entrance to the hotel is off forty forty first Street

5:16 and the entrance for vehicular traffic to the residential towers on thirty eighth Street. They determined that it will create less traffic than if we went forward with the original plan to build four towers.

5:31 Speaker 1 Okay, Well, with regard to the towers, you’re also planning a very interesting hotel. Tell me a little bit about Banyon Yeah.

5:44 Speaker 3 So, Banyon Tree is a very well known hotel, resort, wellness center, hotel outside of the United States, in Asia, in Latin America, in Europe. They have not had up until now, any press in the United States. We’re taking them in as a partner for two hundred vip SP suites and a wellness center at the hotel. The remaining

6:11 hotel rooms will be branded by Mohegan.

6:15 Speaker 1 Okay, so they’re going to be the Mohegan. Yes, The question is why is it taking to twenty twenty five the licensing and the approval process.

6:26 Speaker 3 That’s a question you’re going to have to ask the governor. It was the decision that her Site Location Commission decided. Even though most of the properties will have as of right for any of the casino related buildings and amenities, we’re planning on fifteen restaurants, a food court, and up to five star restaurants.

6:53 Speaker 2 We’re planning retail.

6:54 Speaker 1 Where are people going to park for all of these amenities.

6:58 Speaker 3 We’re putting in over eight teen hundred parking spaces beneath grade.

7:03 Speaker 2 So imagine this. Now you know we’re on.

7:04 Speaker 3 The East River. Obviously you’ve passed the site. We’re going to go down five stories into solid rock. The parking will be below the casino, which will be below grade. But let’s talk about vehicles in parking. People coming to Manhattan from overseas or outside of New York, they don’t rent cars in the city to get around. They’re coming

7:31 in to do their business or go to a Broadway show or restaurants, and they’re getting around with.

7:37 Speaker 2 Public transportation, taxis, whatever.

7:41 Speaker 3 We don’t expect a huge amount of people to be driving to the casino or hotel or the park if for that matter, it really would not be terribly convenient to do so.

7:55 Speaker 1 So the question is why is your site better than the Hudson Yards or the other competitors out there. Well, they’re all formiable companies, no question.

8:07 Speaker 3 They’re all honorable and formidable companies, and they all have good plans. Our site we own, so we don’t have to go through any additional zoning process. Where Hudson Yards does Times Square Slgreen, they own the building that they want to repurpose. It’s a commercial building that they want to repurpose.

8:30 Speaker 1 Right at one time it was the WT Grant building. Exactly.

8:36 Speaker 3 We can start construction tomorrow if we were granted the license today.

8:41 Speaker 1 So I have a question, where do you get the money to build this well development.

8:46 Speaker 3 We’re going to provide the bulk of the financing ourselves, but we’re also going to bring in investors.

8:53 Speaker 1 Okay, are there bank financing or is it private equity type of financing?

8:58 Speaker 2 It likely will be prime in equity financing.

9:01 Speaker 1 So I think you know, in summation, I think the city needs the casino being yours or someone else’s. I think you have a wonderful site, and I think going underground for the construction, the casino below grade, the parking below grade, the apartments are totally needed under the city’s City of Yes and every other plan. And I’m certain

9:25 that under the leadership of Michael Hershman, the company will grow and continue. And I’d like to thank you for being here, and I’ll see you next week.

9:32 Speaker 3 I appreciate you giving me the time and thank you