Spitzer Due To Name Racetrack Franchise Choice Next Tuesday
BY JOHN TOSCANO

Spitzer inherited the high-stakes competition to decide who the next racetrack franchise holder will be when he took office in January.

Governor Eliot Spitzer will turn into an early version of Santa Claus next Tuesday when he's expected to announce his choice of the franchisee to operate the state's three racetracks, including for the first time, hugely profitable video lottery terminals.

The announcement has also been highly anticipated because the governor said recently he may propose closing Aqueduct Racetrack in Ozone Park, which could have major repercussions for homeowners and businesses in its vicinity.

Four companies, made up of thoroughbred racing, gaming industry and real estate leaders, have submitted bids for the 20-year franchise to operate the Belmont Park, Aqueduct and Saratoga Racetracks.

Included among the quartet is the New York Racing Association (NYRA), which has run the tracks for about 50 years.

The NYRA has fallen on hard times in recent years and presently finds itself in bankruptcy and $313 million in debt as it tries to be Spitzer's choice to continue running the racetracks.

Sabini, the ranking Democrat on the senate Racing, Gaming and Wagering Committee, was appointed the Senate Democratic representative on the governor's eight-member panel reviewing the four franchisee bids

The bids submitted have been undergoing a process of preliminary review by the governor's office and also an 8-member panel of state legislators.

The panel will continue to review the choice selected by Spitzer and eventually the state legislature must give its approval for the franchisee.

Spitzer inherited the high-stakes competition to decide who the next racetrack franchise holder will be when he took office in January. At that point, the NYRA was entering the final year of its franchise, so it was left to Spitzer to set the wheels in motion for the new franchise holder to begin operating next January 1.

The governor has said he would like the new franchise holder to be selected by the beginning of June, so a bloody battle is a prospect as the four applicants vie to operate not only the most prestigious racing operation in the world, but also a veritable gold mine of computer-operated slot machines that can gross an enormous amount of money every year.

Pheffer noted, "When other communities shunned the video lottery terminal (VLT) proposal, Queens residents welcomed the VLTs. To turn around and close Aqueduct and move the VLTs would be a slap in the face.

The video lottery terminals, or VLTs, were first proposed to be installed at Aqueduct four years ago, but the NYRA has not been able to complete an agreement with an operator to do the job, which will also require the approval of the state legislature.

Assemblymember Audrey Pheffer (D- Rockaway), whose district includes the Aqueduct Racetrack where the 4,500 VLTs were to be installed, complained last May about the delay in getting the system up and running.

"Nearly $400 million in revenue is lost each year due to the inability to complete an agreement for the VLT project at Aqueduct Racetrack," Pheffer declared.

The lawmaker made the statement at the time that MGM Mirage broke off negotiations with the NYRA to develop and manage the VLTs at Aqueduct.

More recently, proposals have emerged to install 4,500 VLTs at Aqueduct as well as at Belmont Park in Nassau County.

In a recent story, Newsday reported that the VLTs at Pocono Downs racetrack in Pennsylvania average $438 per day per machine. Presumably, the machines in this area could surpass that take because of greater population density here.

According to state Senator John Sabini (D- Jackson Heights), who was recently appointed to the governor's panel considering the franchise bids, the four bidders are:

•The NYRA, which has controlled racing in New York state for 50 years, but which fell into bankruptcy several years ago and is now reportedly $313 million in debt.

•Empire Racing Associates, made up mostly of New York business executives and owners of racetracks in North America.

•Capital Play Ltd., a group of Australian gaming representatives and New York based horse breeders.

•Excelsior Racing Associates, a firm including casino owner Steve Wynn, real estate giant Vornado Realty, developers Richard Fields and Skip Brosman and retired Hall of Fame jockey Jerry Bailey.

Sabini said some bidders have proposed a variety of changes for Aqueduct and Belmont, including placing VLTs at Belmont and high-end hotels, shopping malls and night racing at both facilities.

Sabini, the ranking Democrat on the senate Racing, Gaming and Wagering Committee, was appointed the Senate Democratic representative on the governor's eight-member panel reviewing the four franchisee bids. Sabini is the only New York City legislator on the panel.

The possibility of closing Aqueduct, which has been operating for about a century, was floated by Spitzer several months ago. He said at the time that Belmont Park, a much larger facility, could handle the year-round schedule of racing, with certain adjustments, and the state could profit from the sale of the huge Aqueduct site in southeast Queens. However, the NYRA has made some claims about the ownership of the track.

The governor's proposal aroused some criticism in the Ozone Park, Richmond Hill and Howard Beach neighborhoods surrounding the venerable racing site.

Typical of them was Pheffer's comment that she was outraged by the proposal.

She stated that she and the community "have worked diligently to foster a good neighbor policy with Aqueduct. It is an asset to Queens and, unlike Belmont in Nassau County, it is accessible for all New Yorkers because it can be reached by subway".

Pheffer noted, "When other communities shunned the video lottery terminal (VLT) proposal, Queens residents welcomed the VLTs. To turn around and close Aqueduct and move the VLTs would be a slap in the face. Aqueduct is a tremendous economic resource for Queens and I intend to fight with all of my power to keep it open."

Homeowners near the track were concerned that if the track was closed, developers would rush in to over-build and change the low profile, one- and two-family character of their neighborhoods.

Being realistic, Pheffer had said that knowing the uncertainty of Aqueduct Racetrack's future, the community had successfully completed a rezoning plan for the racetrack property that "complements and enhances the surrounding neighborhoods".

Meanwhile, one of the problems the governor would have to overcome if he wanted to make Belmont into a yearround racing facility would be the huge cost of winterizing the existing huge, drafty structure in Nassau County.

About 20 years ago, the NYRA dodged making changes to winterize Belmont and instead settled on Aqueduct as the site of racing between November and April.