New Panel to Evaluate Groups Seeking New York Franchise

A New York state government panel is being created to evaluate groups interested in taking over the franchise to operate Aqueduct, Belmont, and Saratoga racetracks, a process that suddenly makes wide open the race to replace the New York Racing Association.

The panel, created by the state’s new governor, Democrat Eliot Spitzer, will not limit the public sessions to just those three groups that formally bid on the franchise now held by NYRA. While Spitzer has said he does not believe the entire process needs to be re-bid, opening the public process to others could, in the end, have the effect of re-starting the franchise renewal process.

The Legislature, which would have to approve any franchise deal, will participate in the public process.

“New York’s thoroughbred racing industry commands an international reputation, creates tens of thousands of jobs and provides a vital economic boost to the state,” Spitzer said in a written statement.  “For the first time in nearly 50 years, there is an opportunity to reexamine this important state resource, and to consider restructuring and reinvigorating thoroughbred racing and breeding.”

The announcement by Spitzer came as a federal bankruptcy judge Feb. 28 approved a deal in which the state would provide NYRA with up to $32 million to help keep the racing group solvent through the end of the year. NYRA had been seeking $50 million in private loans. Since it filed for bankruptcy protection last year, the state has agreed to $40 million in assistance for the ailing NYRA.

A screening panel recently released its final report on the selection process, in which it recommended Excelsior Racing Associates be the franchise holder when the NYRA franchise expires  Dec. 31. Excelsior, whose partners include New York Yankees executive Steve Swindal and casino developer Richard Fields, beat out Empire Racing Associates, a group composed of horsemen, Magna Entertainment, Churchill Downs, Woodbine, and Delaware North. NYRA came trailed far behind Excelsior and Empire in the bidding non-binding bidding process.

The new panel is chaired by Richard Rifkin, Spitzer’s special counsel whose menu of policy areas include racing and wagering issues. “Public confidence in this process will be anchored by transparency. The primary standard for selection will be an organization’s integrity and its ability to advance New York racing and the state’s interest,’’ Rifkin said.

Spitzer recently said he did not feel bound by the recommendations of the Ad Hoc Committee on the Future of Racing, the panel that tapped Excelsior. He has also questioned the process that guided the panel’s work, raising, for instance, concerns about a process that gave a sliding scale scoring system to a bidder’s integrity. The Spitzer administration said it will use the committee’s non-binding recommendation as “a starting point’’ to determine an eventual franchise holder.

The new panel will include officials from the state’s racing board, Empire State Development Corp., and the governor’s budget division.

The panel will hold public meetings with potential bidders, and then report back to the governor with an analysis of those plans. Interested parties must notify the governor’s office of their interest by March 6. Hearing dates have not yet been set.

"It is encouraging that Governor Spitzer recognizes the international reputation of New York’s thoroughbred racing industry and its economic impact to the state. NYRA is eager to participate in a process where integrity is a prerequisite and advancing the future benefits to New York racing and the state’s interests are aligned,'' Hayward said in a statement. "NYRA is currently the industry leader in integrity and believes strongly that the pure not-for-profit model is best positioned to meet the primary standard for selection.”

In its own statement, Empire Racing Associates said, "Empire Racing commends the Governor for his active involvement in this crucial issue and his emphasis on a public and transparent process going forward. Empire Racing is ready to offer state leaders the expertise they require to address the crisis and opportunities facing New York racing and breeding and to finally make the New York racing industry an economic engine for this state rather than a burden to its taxpayers."

Spitzer officials said public presentations by prospective bidders will occur in mid-March, with a report from the panel going to the governor with about 30 days after that, leaving a couple of months before the end of the scheduled 2007 session for Spitzer and lawmakers to choose a new franchise holder.


 

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