New York Franchise Talks Lingering

The New York racing franchise talks will linger into 2008.

Racing will continue to be run at Aqueduct on New Year’s Day under an agreement reached Dec. 31, but government negotiators failed to resolve the permanent Thoroughbred franchise issue in New York.

Instead, the talks will now slide over into 2008, raising further uncertainty as the franchise negotiations could become embroiled in and linked to other, unrelated matters in an already poisoned atmosphere at the state Capitol.

The temporary deal agreed to by the New York Racing Association and state officials will ensure racing continues uninterrupted until Jan. 23. Whether another short-term extension will be needed again in three weeks depends on the course of the talks, which will have to now take place in period that includes the governor’s annual State of the State message and the unveiling of his 2008 state budget plan.

“On behalf of our fans, employees, and the participants in the racing industry, NYRA wants to thank Gov. Eliot Spitzer and Steven Newman, chair of the oversight board, for their extraordinary efforts to continue racing at Aqueduct,” Steven Duncker, NYRA’s chairman, said in a statement.

The sides are still split over a host of franchise issues. Senate Majority Leader Joseph Bruno has said he is OK with NYRA continuing to run racing, but at various times he has called for the NYRA board’s resignation, new oversight powers, and a three-year review period of NYRA’s operations officials say could result in a new operator being tapped if NYRA does not abide by certain “benchmarks.”

Bruno, in a statement, said an agreement Dec. 31 on the franchise issue did not happen because of “NYRA’s intransigence on remaining issues that would assure accountability and oversight to prevent the mistakes of the past from occurring in the future.”

Bruno criticized the governor’s office for failing to hold talks since Dec. 28. He called on Spitzer and Assembly Speaker Sheldon Silver to hold a public meeting Jan. 2 to air the differences. (Spitzer’s office said the administration has been in touch daily with the Senate.)

The lawmaker said a “reconstituted” board must be put in place with more industry representatives “as well as others who can assure the integrity of racing in New York State.’”

While Bruno said he has dropped his demand that a new entity be brought in to run NYRA’s simulcasting operation, sources said that position has not been reflected at the negotiating table. The lawmaker is under growing pressure from business leaders in Saratoga Springs--a city he represents--who are fearful the impasse will have negative consequences on the 2008 summer meet.

By law, a state board that oversees NYRA’s finances takes control of the operation of the three tracks Jan. 1. The panel, in a down-to-the-wire deal reached Dec. 31 along with NYRA and the state attorney general’s office, agreed NYRA will continue the actual running of racing for the next three weeks.

NYRA officials had voiced concern about a temporary extension taking pressure off the state to resolve the broader franchise issue. They also insisted on language that preserves their bankruptcy court claims that NYRA, and not the state, owns the three tracks.

NYRA officials have said if a franchise deal is not made involving them, they were prepared to proceed with the bankruptcy case--the centerpiece of which is its land claims.

Spitzer and NYRA, and with Silver’s backing, in September agreed on a 30-year franchise extension, which included NYRA dropping the land claim and a financial package from the state worth well in excess of $100 million. Bruno has objected to the length of the extension, and also wants a video lottery terminal casino at Belmont Park in addition to the one previously approved, though not yet built, at Aqueduct.

In a statement, the Spitzer administration said it expects a deal for the long-term franchise extension for NYRA by Jan. 23.

“From the beginning of this process, my priority has been to ensure the stability and growth of the horseracing industry in New York State,” Spitzer said. “I am pleased that the parties have entered into this interim arrangement to ensure the continuity of racing. I am even more pleased that all parties are embracing a construct for racing that is consistent with the goals I’ve previously outlined and includes a long-term franchise for NYRA as a not-for-profit entity whose sole interest is the improvement of racing in New York State. I look forward to finalizing franchise legislation for presentation to the legislature in January.”

Spitzer and Bruno have been at war since July, and have held no substantive direct talks with each other in at least four months. Bruno had talked of making a “handshake” deal Dec. 31 in which the broad outlines of a franchise extension would have been announced. However, there are nearly a half-dozen other “deals” Spitzer and the legislative leaders announced in June that still have not been approved, lending little credibility to any handshake deal right now in Albany.