06/15/2006 11:00PM

Bid process: A dead end?


NEW YORK - If you've always had a hankering to operate horse racing in New York for the next 20 years, perhaps your time has come. Just follow these four easy steps:

1. Notify the Ad Hoc Committee on the Future of New York Racing by June 30 of your intention to bid for the New York Racing Association franchise, which expires in December 2007.

2. Point your Web browser to www.ny.gov/futureofracing/rfp.htm to download the 45 pages of instructions for submitting your proposal.

3. Spend thousands of hours, dollars, and trees hiring an army of lawyers and accountants to construct a detailed 20-year business plan covering everything from the number of claiming races you plan to run to how you will allocate box seats for the next two decades, under three to six different legislative scenarios, and file it by Aug. 15.

4. Consider the very strong possibility that you have just engaged in a massive waste of time, money, and effort, because the state legislature will adjourn for the year before the proposals are filed, and by the time they reconvene, New York will have a new governor.

Any honest response to the Ad Hoc Committee's request for proposal (RFP), released this week after several meetings and public hearings over the last few months, would require thousands of pages of filings, and a breadth of planning it is unlikely any bidder has undertaken. It will certainly weed out anyone who is less than deadly serious about the undertaking. The question is how seriously anyone will take the process.

Even if the Ad Hoc Committee designates a "winning" bidder by its suddenly announced deadline of Sept. 15, it is unclear what would happen next. For openers, if anyone except the New York Racing Association is "awarded" the franchise, the NYRA will be in court the next day claiming that it owns the tracks and the land, having paid property taxes on them for half a century.

In addition, state laws would have to be rewritten to award the franchise to anyone but the NYRA, and the governor and legislature would have to approve it. The legislature is scheduled to call it a year this month, with no likelihood of returning to Albany until 2007, after the inauguration of Gov. George Pataki's successor - widely presumed to be Attorney General Eliot Spitzer, who is 50 points ahead of either of his two potential Republican rivals in the polls. Spitzer may well convene his own commission to issue a new RFP, grant a franchise to a reconstituted NYRA, or propose some entirely different resolution of the matter.

The matter is further complicated by the necessity for every likely bidder to align itself with a deep-pocketed strategic partner, and some bidders say privately that those potential alliances are still in the exploratory stages. So some if not most proposals are likely to consist primarily of entirely fanciful financial projections based on hypothetical joint ventures as well as hypothetical legislative changes and government approval.

The unrealistic and accelerated timetable for completing the bidding process is entirely a function of a Pataki committee's trying to resolve the matter before Pataki leaves office. Why else does a winner need to be announced a mere 30 days after proposals are hurriedly due, with no public comment or outside scrutiny of the bids, a full 15 months before the end of the NYRA's franchise?

And how exactly will the next custodian of the sport be selected? According to the RFP, it will be decided by a formula: "For each proposal the Ad Hoc Committee has determined that a weighting of each category is appropriate prior to arriving at the final Total Score. . . . Specifically, the Ad Hoc Committee has determined to weigh responses for Bidder Proposal at fifty (50) percent, Bidder Integrity and Responsibility at twenty (20) percent, Bidder Financial Viability at ten (10) percent, Bidder Approach and Managerial Theory at ten (10) percent, Bidder Experience and Qualification at five (5) percent and Bidder Lease Payments at five (5) percent."

Scoring systems aside, the RFP is actually an impressively comprehensive document. It asks for specific plans on nearly every human and equine welfare concern raised at its public hearings, and requires that bidders address every conceivable issue, from wagering integrity to takeout. If bidders had six months to respond to it, and any confidence that the process will actually lead to anything except a return to square one next year, it might be seen as an excellent step in the process.

Instead, it could turn out to be a path to nowhere.