by Paul Post

The New York Racing Association could be out of bankruptcy within two weeks, regardless of the naming of an Aqueduct gaming operator, President Charles Hayward said on Monday.

NYRA and a group of state officials met on Monday in Manhattan to work out details of franchise, lease, and settlement agreements that are needed for NYRA to emerge from Chapter 11 protection, which it has been in since November 2, 2006.

NYRA currently is operating with the sixth in a series of temporary extensions that expires on Thursday.

The state Non-Profit Racing Association Board, which monitors NYRA’s business practices, will meet on Tuesday at the state capitol. It is expected to approve another extender, which board chairman Steven Newman said probably would be for three or four weeks.
 
Previously, NYRA said that it could not get out of bankruptcy until a gaming operator was named because that entity’s input would be critical to an Aqueduct lease agreement with the state. Now, it seems that will not be necessary.
 
“Not having a VLT operator is not going to prevent us at this point from going forward because the state is going to basically stand in their shoes, in terms of these lease negotiations,” Hayward said. “We need to get out of bankruptcy. It’s costing us $80,000 a day in interest fees and bankruptcy charges. We’re very close to a deal.”

Three groups—Capital Play Inc./Mohegan Sun, Delaware North Companies/Saratoga Harness Racing Inc., and SL Green Realty Trust/Hard Rock Entertainment—are seeking the contract to run a 4,500 machine racino at Aqueduct.

“No idea,” Hayward said when asked who he thought would get the deal. The state Lottery Division finished vetting each organization roughly a month ago but Governor David Paterson has yet to make an announcement.

“All three are very qualified as VLT operators,” Hayward said. “We’ve seen all their plans. We’re comfortable with all of them. We’re hopeful, given the financial situation of the state that they’re going to want to move forward.”

The state legislature met in emergency session this month to deal with a mushrooming $6-billion budget deficit.

NYRA is faced with large property tax and pension benefit payments in September, in addition to interest on old state loans. NYRA will not have to make property tax and loan payments if the franchise is worked out because the state will assume ownership of the tracks and past loans will be forgiven.

“I think within two weeks we’ll have a franchise deal done, we can start the new corporation, get out of bankruptcy and go forward,” Hayward said.

Paul Post is a New York-based Thoroughbred Times correspondent