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Does ‘The Shadow’ lurk near the office of N.J. Gov. Corzine?

Oct 23, 2007 4:09 AM

Who is Gary Rose?

A recent headline above a story about him in the Bergen, New Jersey Record read, "Unseen and powerful, he answers only to Corzine," meaning New Jersey’s governor, Jon Corzine.

The story said Rose, 62, "is a multimillionaire onetime investment banker who retired young, gave a ton of money to charity, joined a few foundation boards, played tennis until his knees conked out, rooted for the Mets and pretty much did the stuff that retired people do."

Except that Gary Rose doesn’t do that stuff these days.

Instead, he heads an obscure office in the state capital at Trenton called the Office of Economic Growth, and what he really does is give advice to Gov. Corzine on all issues of importance in New Jersey. He answers to no one but Corzine, the Record story said, not to voters and not to the legislature. Former governor and now Senate president Richard Codey calls him "the shadow governor."

All of this is interesting here only because it was Gary Rose who Gov. Corzine sent to Atlantic City recently to handle a very delicate negotiation: talking New Jersey’s powerful casino lobby into continuing its $90 million subsidy of New Jersey’s three racetracks, The Meadowlands, Monmouth Park — scene of this week’s Breeders’ Cup — and Freehold Raceway.

Four years ago the casinos agreed to the subsidy in return for a promise that the tracks would not seek slots during the period. The governor met with track representatives two weeks ago and promised them he would get the job done. Gary Rose went to visit the boardwalk, and a few days later the governor’s office announced an agreement had been struck for continuation of the subsidy.

The casinos had a slightly different version. The president of their association, Joe Corbo Jr., called the meeting "preliminary" and said no agreement had been reached.

The sticking point, not surprisingly, is chips. Very big ones.

The governor wants the $90 million subsidy commitment extended for three years, while the casinos want to make it $30 million.

The tracks want $135 million.

The casinos do not want the tracks to have VLTs. Neither does Corzine, and he made it clear to the track representatives that they will not get them "at this time." He does, however, want to preserve New Jersey’s racing industry, a major agricultural force in the state, because with New York and now Pennsylvania having slots, as well as Delaware, New Jersey tracks are becoming non-competitive on the critical issue of purses, the amount paid to owners of winning horses.

Pennsylvania is just getting started with slots, but a good example of what lies ahead for New Jersey is what is happening at The Meadows, a harness track 20 miles or so south of Pittsburgh.

It was purchased not too long ago by Cannery Gaming, a Las Vegas-based group, headed by Bill Paulos and Bill Wortman, that immediately built a temporary racino, tore down the track’s grandstand, and is building an entirely new racino and racing complex that will open early in 2009.

With no power source for its customary night racing, The Meadows quit live racing for a few months, kept simulcasting going, and hit a bonanza with is slots. Last week it resumed live racing, in daylight. Before slots, its purses totaled roughly $45,000 a day. Now they will be $125,000 a day, for openers. General manager John Marshal says the 82,000 square-foot temporary racino has brought in about $52 million in three months of operation, and will be replaced by a gleaming state-of-the-art permanent version, a new racing grandstand, and a 200-room hotel.

If that is the result of three months of slot play, and with Mohegan Sun at Pocono Downs’ racino in the northeastern part of the state doing even better, and a Pocono Mountains resort casino soon to open, do the math and see why New Jersey’s racetracks face serious problems right now. They will face far more serious ones if new governor Martin O’Malley of Maryland succeeds in getting his slots bill through the legislature in a special session he has called starting next week.

Corzine says no slots for tracks right now, but Gary Rose will keep the pressure on Atlantic City casinos to continue the track subsidies at their present level. He was educated at Penn, Harvard and Georgetown Law, and made his fortune at Goldman Sachs, where he met Corzine. He may be a shadow, but the casinos will discover, despite all their power, that he is a very big one.