Spitzer puts NYRA in the saddle for 30 years

Governor Eliot Spitzer ended months of speculation recently, by releasing a “memorandum of understanding,” which would keep the beleaguered New York Racing Association (NYRA) operating the State’s three thoroughbred horse racing tracks for another 30 years.
The non-binding agreement, released on Tuesday, September 4, would still require the approval of both the State Legislature and the U.S. Bankruptcy court by December 31. That is the date on which the NYRA franchise to operate Aqueduct, Belmont and Saratoga racetracks expires.
Also, the question of who will get the contract to operate 4,500 video lottery terminals (VLT) at Aqueduct Racetrack in South Ozone Park remains unanswered, although Spitzer said he would make his recommendation “within approximately 60 days.”
Assemblymember Audrey Pheffer, who represents the area around Aqueduct, is happy. “We couldn’t have written it better ourselves,” she said.
According to the memo, NYRA would re-incorporate itself to a 19-member Board of Directors from the current 28, with two appointed by the Governor, and one each from the Senate Majority Leader, the Assembly speaker, the New York Thoroughbred Breeders Association and the New York Horsemen’s Association.
The “New NYRA” would have its multi-million-dollar debt to New York State forgiven, get an additional $75 million to clean up its other debts and emerge from bankruptcy and get a guarantee of future state funding in anticipation of gaming revenues.
In exchange for the franchise, forgiveness and funding, the New NYRA would abandon its claim to the real estate under the three racetracks, a nagging legal question which threatened to keep the courts in the mix for years.
The agreement calls for racing at all three tracks “substantially similar to the current racing schedule,” and specifically calls for a VLT gaming facility at Aqueduct.
The agreement specifically rules out development at the Saratoga site, saying that “the historic and unique character of the Saratoga Race Course will be preserved.”
Future development at the Belmont track is left open, as long as development there and at Aqueduct does not have “a material adverse impact on thoroughbred horse racing” at the two local tracks.
Although the state reserves the right to develop, or pick a developer for “retail, hotel and entertainment facilities… in conjunction with the development of VLT facilities” at Aqueduct, the memorandum says that the state “shall take into account existing community uses of open space at Aqueduct Racetrack and shall consult with the community regarding other community concerns.”
Included are such details as the state forgiving old NYRA obligations to the state, and requiring the VLT operator to make good on them. Also, “until such time as VLT revenues are made available to the New NYRA” the state, possibly through the gaming operator, will provide “reasonable and necessary funds” to meet NYRA’s operating budget.