New York Schools Lose To Empire City Casino

While New York’s schools are scrambling to replace state aid that’s being withheld by Governor David Paterson and anticipating even bigger shortfalls in funding for next year, a little-noticed change in a formula in the regulations covering Empire City at Yonkers Raceway is taking even more money out of their budgets. It’s part of a bailout just like those that Washington used to save Wall Street banks, multinational insurance companies, and Detroit automakers. But Washington didn’t step in to rescue the casino—this particular $56,000,000 bailout was funded by New York’s school children.

Even without the bailout, the casino has generated some exceptionally good income for the Rooney family, owners not only of the Yonkers Raceway and Empire City Casino but also of the six-time Super Bowl Champion Pittsburgh Steelers. Before I get into some mind-boggling numbers, a little background might be helpful. Empire City, the home of what must be one of the world’s largest collection of 25-cent slot machines (more than 5,000 coin guzzlers of all denominations), opened in October 2006, five years and many lawsuits after the New York legislature authorized it. Advocates of video gaming pointed to the economic boon it would bring to the city and their arguments eventually won the day.

Today, thousands of gamblers flock to Empire City from Westchester, the Bronx, and beyond, filling the 5,000-car parking lot and streaming off buses from Long Island, Queens, and Northern New Jersey. There seems to be a crowd at any time of the day or night, a mix of the under-employed, the over-worked, retirees, guys with dates, gals in groups, butchers, bakers, and candlestick makers, all looking for a little escape and a chance to stick their hand in the pot of gold at the end of the rainbow. According to Empire City General Manager Robert Galterio, the average visitor spends $75 in the casino, less than the cost of a ticket to a Broadway play or two tickets in the cheap seats at the new Yankee Stadium.

Empire City is certainly a major contributor to the local economy. The casino and track is Yonkers' biggest single taxpayer and largest private employer with 1,250 on staff, up from about 300 in 2005 before the casino opened. The annual payroll is now about $30 million and the majority of the employees are from lower Westchester and the Bronx.

Here’s the mind-boggling part: in the fiscal year ending in March 2009, Empire City raked in nearly $500 million dollars after paying off the winners. Of that, the Rooney family kept about $212 million, which they used to cover operating expenses, marketing, and debt service on the $285 million construction cost of the facility. While they don’t reveal net profits, Galterio doesn’t deny that there’s plenty left over.

The state education fund comes out a winner, too, since it receives a big chunk of all gaming in New York as part of the incentive for communities to allow the casinos and lottery to operate. In the 2008/09 fiscal year, though, the state’s school children did without a cool $56 million less than they should have received because the share of casino profits allocated to the education fund was cut as part of a bailout of Empire City engineered to help them meet mortgage payments and increase the amount spent on marketing the casino and racetrack. The loss in the current fiscal year will be the same if not larger. The original formula included in the legislation authorizing the establishment of the casino called for nearly 59% of the “Net Win” from the gaming machines (the amount lost by bettors) to go the state education fund. Under the new formula approved by the state legislature, that share became 44%, with the difference going to the casino operators.

Galterio explains that the formula was temporarily corrected to adjust for a planning error. He said all the studies done to arrange construction financing for the facility proved to be grossly optimistic. "In the summer of 2007, our lenders came down pretty hard on us and our interest rates went up," he says. "We borrowed $285 million to do the job, and our interest expense went up to $30 million per year." Without that big interest payment, he says, the operation would be profitable. That shortfall was covered by reducing the amount sent to the state education fund.

This year’s casino revenue grew as a result of another change in the formula. The amount allocated to marketing was doubled, again at the expense of the education contribution. "They allowed us to promote more, to advertise more, do better marketing, increase direct mail, do a lot more promotions and contests on the property," Galterio explains. He also said that the company is now allowed to use those funds to promote the racetrack as well as the casino.

The idea was that more advertising would increase the revenue, which would pay off in the long run with more dollars for everyone, including the education fund. Play has indeed increased, with average revenue per machine per day growing substantially this fiscal year so far. While the distribution formula phases back to the original levels starting in 2010 (unless there's another bailout), the education fund will be short-changed in the meantime, although it will receive some benefit from the additional marketing. For the April-November, 2009, period, the casino's "Net Win" is up about $47 million over the same period last year. Of that increase, $17 million went to the schools, which is nothing to sneeze at. Under the old formula, though, the state education fund would have received $43 million more at a time when it sorely needs it.

In all fairness, it should also be pointed out that the "lost" funding for schools wouldn’t exist in the first place if the casino hadn’t been opened. And the City of Yonkers receives about $20 million which goes to the city's schools. Still, Empire City’s owners seem to have profited most from the latest deal. If the operation was profitable before the interest rates increased, it must be considerably more so now that their entire interest expense is covered—-and then some—-by the shift in fund distribution away from schools and into their coffers.

The bargain is one that NY State Assemblyman Mike Spano of Yonkers had no trouble supporting. He and Assemblyman Gary Pretlow of Mount Vernon sponsored the legislation. "This is the big kahuna," Spano says. "The biggest beneficiaries of that track are Yonkers and the state of New York. No one wants to see it falter. It is imperative that that track operates and thrives and continues to do well."

The school children? Their well-being is apparently not quite so imperative.

Dave Donelson, author of Heart of Diamonds a romantic thriller about blood diamonds in the Congo

Call For Support For Westchester Libraries

It's budget crunch time in Westchester, which means it's time to review the importance of libraries to our way of life. Following is some information I sent recently to my county legislators.

Westchester County funding support many of the services the Westchester Library System provides to our 38 members libraries and the 480,000+ Westchester citizens who have library cards. I venture to say that the 7.5 million visits paid to Westchester’s libraries annually exceeds public use of just about any other institution in the county. County support is vital in providing the services that make those libraries important contributors to our economy and our way of life.

Here are some of the WLS functions funded in whole or in part by the county:

Central Catalog of 5.4 million items. We expect to add 280,000 listings in 2010, handle 850,000 “holds” for patrons, and continue to expand El Catalogo En Espanol, our unique service for this growing portion of the Westchester community. By supporting the Central Catalog instead of expecting each library to provide its own catalog, the county not only provides an essential service to library users, but saves local libraries hundreds of thousands of dollars annually.

Inter-Library Loan Service delivering 2.8 million items. This county-funded program enables local libraries to purchase fewer items for their individual collections while still giving patrons access to a wide range of materials. Through WLS, the cost per delivery transaction is only eighteen cents.

WLS IT Services provides maintenance and support (not to mention centralized purchasing) for over 1,000 computers at member libraries. The free public Internet access enabled by this service is essential to job-hunters, students, and others with limited or no Internet access at home.

The WLS WEBS Education and Career Counseling provides employment counseling for over 3,000 Westchester job seekers in programs held at member libraries.

The WLS Health Advocacy Resource Centers assists 2,800 senior citizens (and others) navigate health insurance and services.

All of these programs and services contribute to the economic well-being of Westchester County, which is but one compelling reason for continued support in the county budget. In addition, of course, our quality of life is greatly enhanced by the libraries in our communities. This year, for example, over 43,000 children attended more than 2,650 programs at member libraries and read more than 557,000 books as part of the Summer Reading Program. Westchester librarians answer some 1.6 million reference inquiries each year.

As economic hardships press upon them, we can only expect Westchester’s citizens to turn more and more to their local libraries for help finding jobs, learning new skills, improving their business operations, managing their health care expenses, and dealing with the vicissitudes of today’s economy.

The generous support provided in past years by Westchester County has helped WLS and its member libraries meet the demands of the county’s citizens in an efficient, cost-effective manner. I urge the County Legislature to continue that support in the 2010 budget year.

Dave Donelson, author of Heart of Diamonds a romantic thriller about blood diamonds in the Congo

Insightful Interview of Christiane Amanpour

My colleague Rima Abdelkadar recently interviewed journalist Christiane Amanpour about her new program on CNN. I was particularly intrigued by Amanpour's thoughts on the difference between fact-based reporting and commentary that's passed off as news by many voices in both old and new media. Her thoughts on why Americans don't get intelligent news coverage of international affairs are spot on.



Dave Donelson, author of Heart of Diamonds a romantic thriller about blood diamonds in the Congo

Can Votes Save The Third World?

I just finished one of the most thought-provoking books I've ever read. It's Wars, Guns, and Votes: Democracy in Dangerous Places

Paul Collier, professor of economics at Oxford and Director for the Center for the Study of African Economies, contends that our obsession with democracy as the be-all and end-all of governance for every nation in the world is a big mistake. He points out that voting is good but far from a panacea for developing countries who lack the social structure, legal systems, stability, and economic prospects to make the results of their elections work. Collier's contentions aren't based on guesswork, either, but rather on statistical studies that examine not our beliefs about developing countries but the reality of them.

I was particularly intrigued by his comments about the Democratic Republic of Congo, which provides numerous examples of the situations he explores. Here's one passage that neatly sums up the current status of the legitimate Congolese mining industry:

"Is democracy the key to peace in these societies?....The recent record is not entirely encouraging....

"Take the transitional government of the Democratic Republic of Congo. Knowing that they had only three years in power before facing elections and the possible loss of office, ministers set about plundering the public purse. But the public purse was pretty small because tax revenue had withered away: as you will see, low taxation is part of the strategy of misgovernance. But plunder can extend beyond tax revenue. One strategy would be to borrow: saddle future citizens with liabilities and run off with the proceeds. Unfortunately for the new leaders of the DRC, this strategy was not feasible: President Mobutu had already used it to the hilt so that the country was beyond its neck in debt. No bank was going to lend.

"But there was an alternative. The Congo is mineral-rich. Much of these resources are unexploited because under President Mobutu it would have been folly for a company to incur investment necessary to sink a mine. The president was stuck in what economists call the time-consistency problem: because he could not bind himself from confiscating investments, no sane company would make them. But by the time of the transitional government the global boom in commodity prices had changed the calculus of risk: it was worth paying a little something for the exploitation rights that the transitional government could legally confer. And so the ministers of the transitional government of the DRC mortgaged the future of its citizens as surely as if they had issued debt, by selling off national assets at bargain prices. A few months ago I had lunch with one of the shrewd purchasers of these rights: a good lunch it was too. He became a little upset when I told him that the rights ought to be renegotiated."

While I found most of Collier's observations highly believable, I can't say the same for his proposed solutions, which I found mostly impractical or even totally impossible except in theory. Still, the solutions he proposes are like the rest of the work--very tasty food for thought.

Dave Donelson, author of Heart of Diamonds a romantic thriller about blood diamonds in the Congo.

Two Great Library Events

I had not one but two gratifying library experiences yesterday.

The first occurred in my tiny local library in West Harrison, NY, a place I often go to clear my head after I've finished writing for the day. As I sat reading a newspaper, I couldn't help but overhear an older gentleman tell the desk clerk he would like to get a library card for his nine-year-old grandson. I idly looked up to see the man standing at the desk, the boy beside him ogling the DVD rack next to them. The librarian explained the simple form and showed the grandfather to a table near me to complete the paperwork while she gave the boy a brief tour of the library.

When the grandfather finished filling out the application, he glanced at me and our eyes met. I smiled and nodded. He did the same and said, "It's a great day, isn't it?"

I looked out the window at the cold, gray rain that had been falling all day, then turned back to him just as his grandson came up to the table with an armful of books and videos. "Yes it is," I answered. "It's a great day."

A few hours later, I had a gratifying library experience of a different kind. It was the Fiftieth Anniversary Celebration and Annual Meeting of the Westchester Library System, a consortium of 38 public libraries serving Westchester County, NY. While I knew this was a special occasion, I was astounded by the turnout: well over 200 library lovers packed the venue!

In addition to the WLS staff and trustees (myself included), there were dozens of library directors and staff members, friends' groups, board members, and just plain folks who had gathered to show their love of libraries and the people who make them possible. Even though election day was more than a week past, we even had an impressive array of county and state legislators. It was truly heart-warming to see a diverse group of this size gathered for such a cause.

Three awards were given out by WLS Director Terry Kirchner and Board of Trustees President Patricia Fontanella. The Service Award was presented to Jean Reidy, nominated by the Somers Public Library for her years of dedication to the library community. The Support Award went to The Friends of the North Castle Public Library, which sponsors the fabulously successful Armonk Outdoor Art Show each year, raising thousands and thousands of dollars for the library. The Innovation Award was presented to Greg and Pat Keenan, owners of the Uno Chicago Grill in White Plains. They came up with a weekly--free--pizza party to reward young readers that has been hugely successful.

The program also included several pertinent speakers including Bill Ryan, President of the County Board of Legislators, Mitch Freedman, WLS Director from 1982-2005, and Siobhan Reardon, WLS Director from 2005-2008 and now President and Director of the Free Library of Philadelphia.

The keynote address was by Marilyn Johnson, author of This Book Is Overdue!: How Librarians and Cybrarians Can Save Us All
and The Dead Beat: Lost Souls, Lucky Stiffs, and the Perverse Pleasures of Obituaries (P.S.).

As Marilyn spoke about the magic that happens in libraries, I couldn't help but think of the small bit of magic I'd seen earlier in the day when the boy and his grandfather came for the first time to the West Harrison Library. Like every day, yesterday was a great library day.

Dave Donelson, author of Heart of Diamonds a romantic thriller about blood diamonds in the Congo

Insurance Companies Have A Lot Of Gall

As Congress continues to flip-flop like a beached mackerel over the public insurance option and health care reform, I received notice today of my new health insurance rates for 2010. The increase was enough to give me heart failure, but I stopped and pulled myself together when I realized I really couldn’t afford to get sick right now. Taking deep, calming breaths and trying to think happy thoughts, I did the math just to make sure I wasn’t hallucinating. I can’t afford mental health care, either.

Yep, I was right. The increase in my premiums for next year is a smooth 18%. Thank goodness I didn’t have any serious illness this year…can you imagine how much my rates would have gone up if I’d had any claims? At least I can get insurance, unlike a whole bunch of other Americans who can’t afford it or are too sick to get coverage.

Maybe my insurance company is struggling, I thought. Maybe they are on the brink of collapse, a disaster that would be precipitated by competition from the public insurance option they so vehemently oppose. They are publicly traded, so that information is pretty easy to find. Next step: the financials.

How about that? 2009 quarterly revenues for the first nine months are substantially ahead (+7.6%) of the same period last year, which was up from 2007, which was up from 2006, which jumped substantially over 2005 (due to an acquisition), which was up from…..you get the picture. Earnings per share aren’t bad either, increasing 35% for the first nine months of this year from the same period in 2008. Guess their health isn’t so bad.

While the insurance companies continue to block the public option and Congress continues to cater to them, though, my heath is deteriorating fast. Deep breaths...deep breaths...deep breaths.

Dave Donelson, author of Heart of Diamonds a romantic thriller about blood diamonds in the Congo

You Can Help Women In The Congo

If you want to do something positive for the people of the Congo, join the Heart of Diamonds team at the NY Run for Congo Women on Saturday, September 26. It will be held on Roosevelt Island in New York at 8:30 AM at Firefighter's Field. Registration is only $25 and funds raised go to support the work of Women for Women International in the Democratic Republic of Congo (DRC).

This four-star charity helps women provide for their families by teaching them skills they need to end the cycle of poverty and suffering. It advances funds to help them start businesses and teaches them to protect themselves against the terror around them. Even if you can't participate that day, donations of any size are very welcome and--what's more--your contribution will be matched by a wonderful supporter of Women for Women International who has pledged an additional $100,000 for that purpose!

Today in the DRC, people are struggling to maintain peace and rebuild their lives after one of the deadliest wars in all of history. As many as 6,000,000 people have died as a direct result of the ongoing conflict. Perhaps even worse than the loss of life is the staggering number of women and children who have been tortured, mutilated, and sexually violated by forces vying for control of the Congo's mineral wealth. As you may have learned from Secretary of State Hillary Clinton's recent trip to the DRC, rape as a weapon of terror in Congo has reached epic proportions. The women of the DRC desperately need our help right now.

Won't you please join us? Invite your friends, too. Even if you can't participate that day, your contribution will do a world of good for women in the Congo. When you sign up for the run, don't forget to join the Heart of Diamonds team. And when you're there, pick up some raffle tickets for a chance to win some great prizes including autographed copies of Heart of Diamonds.

Dave Donelson, author of Heart of Diamonds a romantic thriller about blood diamonds in the Congo.

The Fascinating History Of Golf In Westchester

An often-quoted but much-disputed belief holds that New York's Westchester County is the birthplace of golf in America, a claim based on the undeniable date of the establishment of St. Andrew's Golf Club in Yonkers in 1888. The details of the club's founding--along with a delightful collection of other facts about golf in Westchester--are to be found in a fascinating double issue of The Westchester Historian, the publication of the Westchester Historical Society.

"Under the Apple Tree: The History of Golf in Westchester County" was written by Dr. William Quirin, official historian of the Metropolitan Golf Association and the author of 40 books on golf and racing. I had a tiny role in the work when I had the pleasure of reading an early version and offering a (very) few editorial suggestions last year.

Among the issue's many treasures are dozens of pictures, old and new, of golf then and now in Westchester county. Among them are sketches of the the clubhouse at Pelham and photos of the 1911 Men's U.S. Amateur Championship at Apawamis, Gene Sarazen playing night golf in Briarcliff and Annika Sorenstam teeing off at the JAL Big Apple Classic at Wykagyl. The pictures are worth revisiting time and time again.

While Quirin gives plenty of ink to important events in golf history like the role Wykagyl played in the founding of the PGA, Knollwood's grill room discussion between Clifford Roberts and Bobby Jones that led to the establishment of the Master's Tournament, and Winged Foot's storied role as a championship venue, he also dug up some slightly more obscure tales that I found even more interesting. Briarcliff Golf Club, for example, was a nine-hole course built in 1902 by Walter Law for the guests of Briarcliff Lodge. Quirin says,

"...it boasted a most unusual first hole--a 250-yard par 4 starting from a tee atop the pro shop in front of the Lodge, with a toboggan-slide drop of 250 feet down the hill to a green nestled in the valley below near Dalmeny Road. Gene Sarazen made a famous hole-in-one there in the 1920s."

You won't find the course today, but nearby is Trump National, built on the other side of the road on the site of a course originally known as Briar Hall, designed by Devereux Emmet and opened in 1922.

The public courses aren't ignored, either. Quirin gives an excellent account of the beginnings of daily fee golf in the county with the building of Mohansic Golf Course in Yorktown, which was opened in 1925 by the County Parks Commission.

This publication belongs in every golfer's library no matter where you live. Copies are available for only $15 directly from the Westchester Historical Society. While you're ordering, consider a membership to show your support for the organization's work to keep our past alive.

Dave Donelson, author of Heart of Diamonds a romantic thriller about blood diamonds in the Congo

Women For Women Founder Weighs In On Clinton Visit To Congo

Among the important commentators about Secretary of State Hillary Clinton's visit to the Democratic Republic of Congo was Zainib Salbi, founder and CEO of Women for Women International. Her appearance on Jim Lehrer's PBS NewsHour added welcome depth to the coverage of Clinton's visit.

I'll be sponsoring a team in the New York Women for Women International Run for Congo Women on September 26. Last year, my wife and I were happy to raise a significant amount for the group's efforts to help Congolese women rebuild their lives. I hope you'll join us in supporting the cause this year. Even if you can't run, a small donation can make a big difference in the life of a women in the Congo.

Dave Donelson, author of Heart of Diamonds a romantic thriller about blood diamonds in the Congo.

A Tale Of Spinal Torment - Part 3 of 3

There were other treatments I may try next time. One is chiropractic. Dr. Philip Striano of Hudson Rivertowns Chiropractic in Dobbs Ferry suggests a course of stretching on the DRX9000, the latest high-tech device for relieving pressure on the disc. In my case, he said, “The machine is able to slowly stretch the scar tissue to make it more linear, actually remodeling it to allow the nerve more room.”

Dr. Sharma agrees, with a caveat. “That traction can be helpful because it temporarily opens up that space where the nerve roots are,” he says, adding, “But it’s not permanent.” That’s okay by me. Apparently, neither was my surgery.

In a demonstration session, I started with a heat pack to loosen the muscles, then I laid on my back strapped to the machine with my knees supported. Striano explained, “It pulls in an algorithm of pull-and-relax, pull-and-relax, so the muscles don’t go into a protective reflex spasm.” In English, he meant that a steady pull would cause the muscles to pull back—hard. During the session, I felt my torso lengthening slowly as it was stretched, then relaxing as the pull was decreased. It would have been easy to fall asleep. At the end of the session, I felt like an accordion relaxing back to a normal posture under the influence of gravity.

The other alternative isn’t whiz-bang new; it’s an ancient treatment first described in 475 BC in Chinese literature. I’m talking about acupuncture, of course, or the insertion of fine needles into the body at specific points. Dr. Sharma says it helps about two-thirds of back pain sufferers, although more frequently simply by relieving chronic pain for an indeterminate period of time. When I described my symptoms to Dr. Gabriel Po-Jen Lu, a Scarsdale MD who practices the ancient art in a highly scientific and quite modern way, he said, “The acupuncture itself doesn’t decompress the disc, but it will relieve the muscle spasms, decrease cramping, improve circulation, and release endorphins, which is your body’s natural pain killer. It isn’t a cure, but it will make your life better by relieving the symptoms.” A typical session lasts fifteen to twenty minutes and costs $75 if administered by an MD like Dr. Lu. Most practitioners recommend a course of three treatments to evaluate the effectiveness in a given patient.

The docs tell me that I’ll be facing this the rest of my life and probably will have some arthritis problems in the back at some point too, so acupuncture sounds fine to me. In fact, just about any of the many treatments available—body-numbing drugs, endless rounds of abdominal crunches, injections in the spine, sweaty contortions in the hot Yoga studio, machines that pull me like taffy, or needles that re-channel my chi—are better than flopping around helplessly on the tile floor like a fresh-caught mackerel.

Part 3 of 3 (originally published in a slightly different version in Westchester Magazine)

Dave Donelson, author of Heart of Diamonds a romantic thriller about blood diamonds in the Congo