Spitzer Picks NYRA To Continue Running Tracks; Aqueduct Stays Open
BY JOHN TOSCANO

Governor Eliot Spitzer announced yesterday that he is recommending that a "new" New York Racing Association be awarded a 30-year-franchise to operate the state's three thoroughbred racetracks.

Spitzer also announced that Aqueduct would continue as a racetrack and not be closed, as he had previously hinted.

Aqueduct, in Ozone Park, would be the site where as many as 4,500 video lottery terminals (VLTs) would be set up. The VLTs would be operated by one of the three firms that had competed for the franchise, which was awarded to the NYRA again.

It was not clear whether the state's schools would share in the proceeds to be generated by the VLTs. Funds derived from that operation, according to the governor's announcement, would be used to improve the racing facilities, fund deficits from ongoing track operations and increase racing purses.

Also under the new franchise agreement signed by the governor and the NYRA, the NYRA relinquishes any claims it may have to ownership rights of the tracks and facilities.

When Spitzer suggested shutting down Aqueduct several months ago and selling the huge site to developers, the NYRA declared it owned the tracks and was prepared to go to court to establish that position.

The NYRA, a non-profit entity, has been operating the racetracks at Belmont, Aqueduct and upstate Saratoga since it was formed 52-years ago. It has been in bankruptcy because of falling attendance and owes the state more than $76 million.

In explanation of why he recommended that the bankrupt organization continue to operate the tracks, Spitzer stated: "Following my investigations [of the NYRA] a few years ago, a new leadership team at NYRA has turned the organization around to the point where it is demonstrating real results and true transparency. The strong performance of racing this season is a testament to how far [the] NYRA has come in the last few years and this agreement ensures that racing in New York state will be operated by experienced management."

The governor's recommendation that the NYRA remain the franchise must still be approved by the Assembly and senate, and there have been hints that Senate Majority Leader Joseph Bruno, who has been feuding with Spitzer, may not go along with the recommendation to give the NYRA the franchise, which is for a 30-year-period rather than 15 years.

The state and the NYRA signed a Memorandum of Understanding yesterday which details the franchise agreement.

Under its terms, the new NYRA board will be downsized from its current 28 members to 19. Two members will be appointed by the governor and one each by the Assembly Speaker and Senate Majority Leader.

The memorandum states clearly that thoroughbred racing will continue at Aqueduct along with the VLT facility; and that the state and the NYRA will choose the gaming operator from among Empire Racing, Capital Play and Excelsior Racing Associates.

NYRA will receive $75 million from the state or the gaming operator to satisfy all its bankruptcy obligations.