A New York state government panel approved a $5-million loan for the New York Racing Association Jan. 9 to keep the association afloat during its 2006 racing season.
The funding deal, part of $30-million bailout package announced in December just before NYRA was planning to file for bankruptcy protection, was approved by the state Public Authority Control Board, a panel representing Gov. George Pataki and the state legislature.
Officials described it as a working capital loan intended to get NYRA through its cash-flow problems until the more profitable Belmont Park and Saratoga seasons begin this spring and summer.
NYRA will pay 4% interest on the loan, which will be made through the Empire State Development Corp., the state's main economic development agency. Terms of the loan are still being finalized, but state officials said the money would be flowing to NYRA in the near future.
The $5-million loan is being secured, in part, by future revenue from a video lottery terminal casino at Aqueduct, which NYRA officials hope could be open by the end of this year. NYRA recently was advanced $1 million by the Port Authority of New York and New Jersey as part of a $5-million land sale involving non-racing parcels at Aqueduct.
Pataki and legislators have proposed another $20 million for NYRA from future VLT funds due to the state Lottery Division. That plan, however, is expected to be part of the state budget, which won't be finalized until later this year.
NYRA president Charles Hayward recently said NYRA had not yet made its 2005 pension payments and is late on some of its property tax bills; together, those two tabs total $22 million.
As part of the deal, NYRA must submit a cash-management plan demonstrating how it will, with the help of the new state funding, meet its financial obligations through the end of next year.
The $5-million loan will come due in a balloon payment Dec. 31, 2007--the day the existing franchise held by NYRA to run Aqueduct, Belmont, and Saratoga expires.