Gov. Eliot Spitzer

Gov. Eliot Spitzer

Skip Dickstein

New York Negotiations Continue

Negotiations for a new Thoroughbred franchise in New York have progressed.

Negotiations for a new Thoroughbred franchise in New York have progressed in the past several days, but the Republican-led Senate has refused to budge so far on several key points that could risk a shut-down of racing in less than three weeks, according to a top adviser to New York Gov. Eliot Spitzer.

“In the last few days, we’ve begun to see serious movement and real progress, but the Senate is still holding onto positions that would make it impossible for a deal by year end," said Paul Francis, the governor’s budget director.

The deal the sides are trying to reach envisions the New York Racing Association holding onto the racing franchise. But there are still a number of key disputes that have kept officials in closed-door talks from reaching a deal.

The NYRA franchise expires Dec. 31, and there are various theories – including shuttering racing – about what could happen if the governor and legislative leaders don’t reach a deal before then. The NYRA board would also have to sign off on any agreement.

“If there is no four-way deal, there is a real risk racing will cease on Jan. 1, which will be very damaging to the industry," said Francis, who is negotiating along with Patrick Foye and Richard Rifkin on behalf of Spitzer with legislative aides. “We need to have the Senate move closer to the position of the other three parties for a four-way deal."

Senate Majority Leader Joseph Bruno on Dec. 13 criticized Spitzer for not negotiating every day in public on the franchise matter. He said if there is no deal by Dec. 31, a state panel created to oversee NYRA’s finances will legally be in charge of running racing at Aqueduct, Belmont Park, and Saratoga.

Francis said there are many theories floating around about how racing will or will not be interrupted if there is no deal before the end of the year. “Our view is we should focus on getting a four-way deal," he said.

Negotiators have been working on “benchmarks" NYRA would have to follow. Some involve things such as acting in compliance with environmental and safety regulations. Others are numerical in nature, such as guaranteeing a minimum number of racing days at Saratoga, number of New York-bred races, and meeting certain attendance performance at its racetracks.

The sides also want to create a new state entity to oversee NYRA. The Senate favors a public authority, which would be legally separate from the governor’s branch of government, while the administration wants to create a new agency. The sides haven’t agreed on who would pick the members of the new entity.

The entity would be involved in such aspects as contract relations between NYRA and off-track betting operations and tote contracts. The entity would also be in charge of selecting an operator to run a video lottery terminal casino at Aqueduct.

The Senate and Spitzer favor a casino also at Belmont, but that plan is being opposed by negotiators for Assembly Speaker Sheldon Silver. The administration believes Silver will not bend on the Belmont matter.

A major sticking point involves simulcasting. The Senate has been insisting on taking the lucrative simulcasting business away from NYRA and awarding it to an outside company. It has not publicly revealed who should get the contract. The Spitzer administration considers the Senate position a poison pill that will prevent a final deal.

“NYRA needs to keep that," a state official said.

Also unresolved is the insistence by Bruno that the NYRA board be dissolved and replaced by a new slate of directors. Bruno has said NYRA's many problems over the years require a new team be brought on to run things.

“It’s just not going to happen. They are NYRA," said a source who has been involved in the lengthy talks in Albany the week of Dec. 9.

The sides have also yet to determine the length of the franchise. NYRA, Spitzer, and the Assembly agreed on a 30-year extension. Bruno has talked of 15 to 20 years, a timetable NYRA believes is unacceptable because it is agreeing to relinquish its land claims for the three tracks in return for the longer extension.

All sides agree the legislature does not have to vote on an agreement before Dec. 31 to keep racing going. If an agreement is reached before the end of the year, the governor and legislative leaders would announce a pact. The NYRA oversight panel would then legally step in to run the franchise until lawmakers return for the 2008 session Jan. 9.