New York City's second-largest commercial landlord is walking away from its bid to land a casino licence and a chance to build a property in place of the now-demolished Pennsylvania Hotel.
In a third-quarter earnings conference call held last month, CEO Steven Roth did not reveal any details of the reason for backing off the deal, but is reported to have said: "It's highly likely we will not pursue a casino license."
The current economic conditions are challenging, with unfavourable office space demand and rising interest rates adding to the complications for Vornado. Mr Roth also said: "The company's policy in this environment is to retain as much cash as we can. The preservation of our balance sheet is the number one priority.”
The $3 billion costs are likely to have proven too prohibitive, while it's possible the project didn't tick all the boxes for the company's investment guidelines. When rumours of Vornado's involvement in a potential development first came about, a company spokesperson said at the time: "Our most important criterion for any project is that it meet the economic development objectives and produce the transit and public improvements outlined in the state’s General Project Plan.”
The likes of SL Green Realty, Related Cos, and Silverstein Properties are all still in the running for permission to open a casino, and the heavy competition could also have proven a problem for the business.
