Michael Hershman: The Man With The Freedom Plaza Plan

The $11.1 billion Freedom Plaza proposal for a casino on the East Side of Manhattan is not about sleight of hand, but some of its key components are about what you don’t see.

The casino gaming space, for example, is below ground level. A proposed ferris wheel for the parcel of land was quickly removed after a vocal groundswell of local opposition. There is no “Las Vegas feel” to the project fronted by the Soloviev Group and Mohegan, and that is by design, according to Soloviev Group CEO Michael Hershman.

“When I interviewed Mohegan, I knew of their facilities,” Hershman said in an interview with Casino Reports while recounting meetings with Las Vegas-based operators as potential suitors. “I was impressed by the fact that they, too, were a family operation, not a public company. And they were not interested in bringing, for lack of a better word, a circus atmosphere to Manhattan.”

Hershman and the Freedom Plaza team made its pitch to the Community Advisory Committee (CAC) at its initial meeting July 18. Freedom Plaza is one of eight bids being considered for three downstate casino licenses in New York.

The casino as innovative engine

Hershman said the first time the idea of a casino was mentioned was in late 2021, after the state legislature had approved the three downstate licenses. The Soloviev Group had just completed a five-year build of a rental and condominium building across the street from what would be the proposed location, and talk turned to land it had purchased from Con Edison.

“We have zoning on that property to build four high-rise buildings,” Hershman explained. “But we started to think … ‘What about building a resort, an integrated resort with a casino, hotel, and other amenities?’ And we started sketching out on a piece of paper what it might look like. We hadn’t completely decided that that’s what we wanted to do, but we started thinking about it.”

With input from architects they began to visualize what could be built, and the idea of Freedom Plaza started to materialize. Hershman said affordable housing was viable because of the economics of having a casino, but it was not in the original plan. But given how the city is sorely lacking affordable housing, “we started to look at everything else we could with the site to make it more community friendly.”

“It started to come together,” he added, “and we said, ‘You know what? Let’s take a shot at this.'”

Finding family in Mohegan

The CEO of Soloviev Group explained that his company is a family-owned business, and more important to this casino process, had no background in gaming. In the interview process with some gambling operators, Hershman explained how he became “a little bit uncomfortable.”

“They really had no ties to New York,” he said. “They were Vegas coming to New York to make a lot of money. And they were public companies having to answer to boards and regulators and such.”

In contrast, Hershman found a kindred spirit of sorts in Mohegan. He pointed out their vision of conducting business is “very similar to ours, they’re a strong believer in social responsibility and giving back to the community.”

Mohegan CEO Ray Pineault expanded upon that during the presentation to the CAC, saying, “When we think about what’s important to any project, it’s not about the next stock report, it’s not about our year-end results. It’s what we call at Mohegan, ’13 generations to come.’ We’re making decisions that are going to be in the best interest of our guests, our team members, the tribal membership in the community for 13 generations to come.”

Hot-button housing and community investment

Affordable housing in the New York City metropolitan area has become one of the top issues in the upcoming mayoral election. Multiple applicants for the three casino licenses have incorporated building or providing such units into their bids, and Freedom Plaza is among them.

Its two proposed residential towers will have more than 1,000 units, including 513 “that working families can afford.” Hershman said Soloviev Group acknowledged the acute need for affordable housing because it sees the issue up close and the lack of any such development on the East Side in recent memory.

“We are New Yorkers. … We are not coming in from somewhere else. We actually live in that district,” he said. “We have grandchildren that live across the street from that property. We are very sensitive to the community needs and what we would like to see as a neighbor next to that property.”

One other integral component to the bid is Freedom Plaza’s IPO proposal, which designates up to 12% of any initial public equity raised for Freedom Plaza for New York City residents. That puts the raise between $150 million and $180 million, a plan modeled on, of all things, the Green Bay Packers’ public ownership structure and a conversation with Hershman’s son who lives in Appleton, Wisconsin.

“My son called me up and said, ‘I’m going to buy a share in the Green Bay Packers,'” Hershman recounted. “They were offering shares at a preferential rate to residents. And he was ecstatic. And that’s where I got the idea.

“And look, that sense of ownership is so important. Let’s give them not only a sense of being, but an opportunity to make money off it as well. So blame it on the Green Bay Packers.”

Surveying the competiton

Hershman is under no illusions this process will be easy. He called the two other Manhattan-based proposals fronted by SL Green and Silverstein Properties “very formidable,” noting their respective long-standing presences in New York City. But he is also confident Freedom Plaza has the most to offer beyond bringing a casino.

“They cannot come close to providing the amenities that we are, the parkland, the affordable housing, the museum,” Hershman said. “And furthermore, our capital investment will be a multiple of theirs, as will our workforce size because of the size of our project compared to theirs.

“We have to stress our advantages.”