06/22/2006 11:00PM

Gag rule on New York franchise bidders


The New York committee in charge of evaluating bidders for the franchise held by the New York Racing Association plans to enforce a gag rule against the bidders after responses to the committee's request for proposals are received on Aug. 15, the executive director of the committee said this week.

The gag rule will prevent bidders from speaking publicly about any element of their responses until Sept. 15, the date that the Ad Hoc Committee on the Future of New York Racing plans to release its recommendations about the bids to the state legislature and Gov. George Pataki, according to Robert Williams, the committee's executive director.

The rule is one of several designed to keep the bidders from either conducting publicity campaigns supporting their bids or denigrating those of their competitors, Williams said. If a bidding group breaks the rule, the bid will be disqualified.

Last week, the nine-member committee released its request for proposals to operate Aqueduct, Belmont, and Saratoga Race Course for a 20-year period beginning in 2008. NYRA's franchise to operate the three tracks and a casino at Aqueduct expires on Dec. 31, 2007.

Bidders for the franchise will need to identify themselves and their partners to the committee by June 30 in order to be eligible to make a bid. The request for proposals also states that bidders must submit any questions regarding the process by that date.

Williams said that the list of potential bidders, the questions that are submitted, and the committee's responses to the questions will be made available to the public. However, Williams also said that because of the gag rule, the bids themselves will not be made available to the public until Sept. 15.

Bidders will be able to comment about their bids prior to the Aug. 15 deadline, Williams said. Few bidders are expected to comment in detail, however, because of the potential of tipping the group's hand to competitors.

In addition to the gag rule, bidders will be prohibited from discussing any element of their bids with any of the nine members of the committee. Complicating that rule is the fact that NYRA's most socially engaging meet, the 36-day stand at Saratoga, will be conducted while the committee takes and evaluates the bids.

One committee member, Jackson Knowlton, is the managing partner of Saratoga Springs-based Sackatoga Stable, the owner of 2003 Kentucky Derby winner Funny Cide. Another member, Gary Pretlow, is a New York Assembly member who chairs the Racing and Wagering Committee. And another, Valerie Keehn, is the mayor of Saratoga Springs.

Citing the potential for bidders to cross paths with committee members during the Saratoga meet, and the duty of elected officials to discuss racing matters with constituents, Williams said that bidders would be allowed to talk to committee members as long as the discussion did not touch in any way on the bidding process.

"They can certainly appear in public with everyone," Williams said. "What they can't do, while they are sitting there smiling for the picture, is turn and say, 'Hey, you know what, we're going to do X, Y, and Z in our proposal.' In other words, there's no restriction on someone's communications, it's a restriction on someone's communications regarding the process."

So far, few potential bidders for the franchise have stepped forward, although two groups - the New York Racing Association and Empire Racing Associates - have indicated positively that they intend to submit proposals to the committee. Neither group, however, has identified any partners. Other groups have stayed in the background, preferring to wait until the June 30 deadline.

Churchill Downs Inc., for example, has not confirmed that it will bid, either on its own or with a partner, even though the company is widely expected to seek the franchise.

"We have received the request for proposals and we are in the process of reviewing it," said Julie Koenig Loignon, the vice president of communications for the company. "If and when we intend to make a bid, we would announce that in a scheduled press release."

Some bidders may also be reluctant to identify themselves because of the committee's restrictions on discussion, some of which are outlined in the request for proposals. For example, Bill Nader, a senior vice president for NYRA, said early this week that NYRA officials would have no comment on the association's bid because of the restrictions, although Nader did say that NYRA is having "informal discussions" with possible partners.

"For right now, we're going to keep this as quiet as possible," Nader said.