Future of NY Racing Franchise Hot Topic at Conference

Bidders vying for the major Thoroughbred franchise in New York blew their own horns -- and did a bit of not-so-subtle bashing of each other -- before an Aug. 1 who's who of racing industry insiders, including members of a state panel considering the bids to operate Aqueduct, Belmont, and Saratoga racetracks.

The New York Racing Association caused the most rumbling at the conference in Saratoga Springs sponsored by Albany Law School when its chairman, C. Steven Duncker, implied the franchise process could be disrupted down the road if the ongoing land claims issue between NYRA and the state government is not resolved.

With top state officials looking on, Duncker said NYRA has a "pretty good claim'' to the land at Aqueduct, Belmont, and Saratoga racetracks because it holds the deeds to the properties and has been paying taxes on the land for 50 years.

Asked afterward if he was issuing an implied threat over the land if NYRA does not win the franchise again, Duncker said, "No, but it's a big issue.'' He added, "The process is going to be hard to come to fruition if there's a question about who owns the land.'' He suggested the state and NYRA need to come to terms with the land issue. "Only we can sit down and resolve this,'' he said.

NYRA has long maintained it owns the land; state officials say NYRA gives up its rights to the properties Dec. 31, 2007, the day the current franchise expires.

Duncker's land claims were strongly disputed by a member of the Ad Hoc Committee on the Future of Racing, a state panel that is conducting the bidding process. "New York state is still totally committed to proving that indeed the state owns the land,'' Bernandette Castro, who also serves as commissioner of the state parks system, said after hearing Duncker speak. "It's not about who says they own it now. It's who owns it at the end of the franchise,'' she added.

Only three of 15 bidding groups –- NYRA, Empire Racing Associates, and Excelsior Racing Associates -– spoke at the annual conference put together by the racing and wagering think tank of the law school. The Excelsior group, using some equine star power, turned to Hall of Fame jockey Jerry Bailey to represent it. Bailey declined to identify the group's members; so far, the only certain backers of the group include Richard Fields, a former advisor to Donald Trump, and Steve Swindal, a son-in-law of New York Yankees owner George Steinbrenner.

Not naming the principles behind the group didn't stop Bailey from proclaiming his team "can restore the state's greatness in racing.'' With NYRA's Duncker sitting on stage with him, Bailey said the Excelsior group can "replace the current system with a world class operation'' that will "set new standards'' for the nation's Thoroughbred industry. He said the group would "improve the management under which New York racing currently operates.''

"My biggest win would be to see New York racing flourish,'' said Bailey, who said he sees himself helping the Excelsior group as a point person to work with horsemen and to devise ideas such as improving backstretch conditions.

Asked after the session if he could see Excelsior and NYRA partnering, he said, "I think anything's possible.''

Jeffrey Perlee, chief executive officer of Empire Racing Associates, which is run by New York-based owners and breeders and includes as partners Delaware North and Woodbine, sought to stress his group's New York ties. "The home grown part is most important,'' he said. Several competitors, including Magna Entertainment and Churchill Downs, are based out-of-state. He said his group's bid premise is to "make sure the New Yorkers are firmly in charge'' of the tracks.

Perlee went out of his way to note that Empire, unlike NYRA, believes the state owns the tracks. Unlike officials with Magna and other bidders, he stressed that Empire also believes the state government should play a major role in the running of the Aqueduct, Belmont, and Saratoga racetracks. "They just don't get that,'' he said of other bidders.

Perlee criticized the "third world conditions'' of the backstretch at the NYRA tracks. Under NYRA's leadership, he said the horsemen have been "keenly missing'' from the operation of the tracks, a claim Duncker strongly disputed. He also talked of restoring integrity to racing in New York, which hit a low point a couple years ago after a number of high-profile legal troubles that spread through NYRA.

"You're too late. NYRA has already done that,'' Duncker said to Perlee during the panel presentation as he went through a litany of reforms that NYRA has instituted the past couple years.

Duncker was the panel's strongest advocate for keeping the current not-for-profit system for running the racetracks, though he said other components of the operation, such as VLT casinos, should include partnerships with for-profit firms. Duncker noted that seven of the top 10 performing tracks in the nation in terms of purses are run by not-for-profits. He noted Gulfstream Park, owned by fellow bidder Magna, and Delaware Park, don't make it into the top 10 "because they are for-profit.''

The display put on by the NYRA, Empire, and Excelsior representatives was not lost on members of the state panel overseeing the bidding process. "It was salesmanship at its best,'' Castro said. While she wished other bidders had spoken, she said, "I found it informative enough that I wanted the rest of the ad hoc committee to be here.''

Bennett Liebman, head of the Albany Law School racing think tank, said Magna and Churchill both declined an invitation to speak at the event.

The all-day conference also heard later from J. Patrick Barrett, head of the state franchise panel. He went out of his way to say nothing controversial, instead sticking to a script that took the audience through a lesson of the franchise award process. The committee was to meet later in the day to approve a series of housekeeping measures, including the release of a request for proposal for the committee to hire an outside auditing firm to help judge the bids, which are due Aug. 29.

The committee by the end of September is expected to recommend to Gov. George Pataki and the state Legislature its choice for the franchise winner. But with Pataki leaving office at the end of the year, it is almost certain the matter will be pushed off until next year before a new governor.