NO MORE HOLLIDAY CHEER: Marc Holliday, the CEO of real estate giant SL Green, has a $10 million bonus dangling in front of him. But the arrangement for the massive cash windfall is likely illegal, according to lobbying experts. Holliday — who helms the company partnering with Jay-Z to win one of three available downstate gaming licenses to open a casino — is due for a “one-time cash bonus” of $10,000,000 if SL Green’s Times Squaresite is “converted into a hotel/casino,” regulatory filings show. There’s just one problem. Experts told POLITICO the bonus flies in the face of lobbying law, and is likely criminal. “If he's a registered lobbyist and he can get a contingent fee of any amount of money as a result of his lobbying effort, that would be a violation of the lobby act,” said David Grandeau, who served as the executive director of the state’s lobbying commission for over a decade. Grandeau, who does not have any clients vying for a downstate casino, called Holliday’s bonus a “blatant” violation. New York’s lobbying statute is clear — a lobbyists’ pay or bonuses cannot be contingent on the success of a certain activity. The same law is on the books in most other states, too. The SEC filing detailing Holliday’s potential payout was first reported by Crain's. The filing describes the payment as a “casino bonus” and specifically lists the 1515 Broadway site. The news of the dubious arrangement comes after the state’s gaming commission warned the nearly dozen bidders in a September board meeting that any history of illegal activity in other states could impact their bids in New York. The warning came two weeks after a POLITICO Pro report detailed how at least three of the bidders have been subject to investigations into wrongdoing at Las Vegas casinos. The casino proposals will be awarded at the end of the year in a process that has been beset by delays. A now-three-person siting board will have to grade the proposals according to a highly-detailed rubric, where one of the key factors is the "integrity, honesty, good character and reputation of the Applicant.” The three licenses are sure to birth some of the most lucrative casinos in the world. The prospect of all that money has spawned an army of lobbyists, strategists and lawyers, each working to improve their bidders’ chances at winning one of the three licenses. While the bonus will only be awarded if SL Green wins out in the highly competitive process, the agreement – even without the payout — already makes it illegal, Grandeau said. “It's a violation even before he gets the fee, and (New York State Commission on Ethics and Lobbying in Government) should be actively attempting to enforce that law and refer it to the appropriate District Attorney for prosecution.” Beyond the bonus, the real estate company faces an uphill battle in winning one of the licenses. Queens’ Resorts World and Yonkers’ Empire City are seen as two favorites to win a license — they both already operate as limited gaming facilities and enjoy deep support from local politicians and constituents. But the Times Square bid has been embattled with opposition from the city’s teachers’ union, Broadway theater owners and Manhattan politicians. Rachael Fauss, a senior policy advisor at Reinvent Albany, said the state lobbying law against contingency payments is there to ensure government deals benefit the public — not specific lobbyists. “You don't want the incentives to be that the government has to pay more for something, or the price is being jacked up so that the lobbyist can earn more,” Fauss said. “What's the best deal for the public, not the lobbyist?” In a statement to Playbook, Jeremy Soffin, a spokesperson for SL Green, indicated the company is moving ahead with the bonus agreement, saying the payout is contingent on the opening of a successful casino, instead of just the awarding of a license. “As always, we are fully compliant with all regulations and legal requirements; any bonus would only be paid based on achieving projected EBIDTA targets and generating operating revenue after developing and opening a world-class casino,” Soffin said. “There is no bonus for award of a license. In the spirit of transparency, we invite all applicants for a gaming license to join us in publicly disclosing executive compensation related to the operation of live gaming in the New York City area." Under current law, the only way to open a casino in the state is to obtain one of the three downstate licenses. — Jason Beeferman
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