NEWS
NYRA gets seventh franchise extension
Posted: Wednesday, August 27, 2008 9:35 AM
by Paul Post
New York Racing Association has been granted a new extension, until September 28, which officials hope will be enough time for the organization to get out of bankruptcy and see its new 25-year franchise take effect.
On Tuesday, the state Non-Profit Racing Oversight Board, which monitors NYRA’s business practices, approved the seventh in a series of temporary extensions that NYRA has operated under while waiting for its new franchise to become official.
NYRA and state representatives spent all day Monday in Manhattan negotiating terms of franchise, lease, and lawsuit settlement agreements that are needed before NYRA’s contract to run Belmont Park, Aqueduct, and Saratoga Race Course takes effect. Another session is planned for Wednesday.
“The parties have made substantial progress,” said Alan Kornberg, an attorney with the Paul, Weiss law firm that represents the Oversight Board.
He said it is believed that NYRA will be out of bankruptcy and have its new franchise in place by September 15. The new franchise calls for the state to take over ownership of the tracks, which it will lease back to NYRA.
NYRA is anxious for this to happen quickly because of several large property tax payments coming due this fall that it would no longer be responsible for once the state takeover is complete. NYRA Chief Financial Officer Irene Posio said the group must pay the City of Saratoga Springs, New York, $420,000 in September and Nassau County and the City of New York $2-million each in October and November, respectively, for Belmont Park and Aqueduct.
It also owes the state $500,000 worth of interest on old loans. That debt, too, would be eliminated once the franchise takes effect because the deal includes the state’s forgiveness of all NYRA loans, totaling more than $200-million.
Altogether, NYRA will save nearly $6-million this fall alone if the new franchise becomes official.
“We have paid all the real estate taxes that have come due during this extension period,” Posio said.
Delays in completing the franchise deal have proven quite costly to NYRA. In August, it made a $1.5-million tax payment to Nassau County and another $1.9-million to New York City on July 1. The state would have been responsible for such payments if it had assumed ownership of the tracks by then.
The current Saratoga meet, despite lower attendance and handle numbers caused by bad weather, is still the most profitable time of year for NYRA. The Saratoga season ends Monday and racing moves back downstate to Belmont Park on September 5.
NYRA still will be responsible for a $1.5-million pension benefit payment in October.
If bankruptcy and franchise issues are not resolved, NYRA will not have enough money to make property tax payments as well, President Charles Hayward said.
Paul Post is a New York-based Thoroughbred Times correspondent
