02/13/2008 1:00AM

Hints that NYRA deal is close


Although there were signs of optimism, the status of a long-term franchise extension for the New York Racing Association remained unclear on Tuesday, one day before the expiration of a short-term agreement that has allowed racing to go on at Aqueduct since the end of the year.

Officials for Joseph Bruno, the Republican state senate majority leader, said Tuesday that negotiations on the 25-year franchise extension were ongoing and expected to reach an agreement by Wednesday. But Bruno has insisted since late in 2007 that a long-term deal was imminent without one being reached.

"The expectation is that something will be in place by the end of the day" on Wednesday, said Scott Reif, a spokesman for Bruno.

Officials for NYRA would not comment Tuesday but said they would be available on Wednesday morning. NYRA's chief executive, Charles Hayward, and NYRA's chairman, Steven Duncker, were in Albany, N.Y., on Tuesday for closed-door meetings on the deal. NYRA also paid for a group of 100 employees to visit the Capitol on Tuesday.

Representatives of Gov. Eliot Spitzer and assembly speaker Sheldon Silver have declined to comment on any aspect of the negotiations for several days, though the officials have also said that they expected a deal to be reached. The agreement would need the approval of Spitzer, the assembly, and the senate.

The presence of NYRA officials at the Capitol and the silence of major participants in the negotiations suggested that a deal might be in the final stages. Rick Violette, the president of the New York Thoroughbred Horsemen's Association, said Tuesday from Ocala, Fla., that the horsemen's lobbyist had said that a deal was near.

"I think we have a deal," Violette said. "It looks like we'll be racing Thursday."

According to Violette, the deal would give horsemen 5.5 percent of the revenue from a yet-to-be-opened casino at Aqueduct in its first year of operation. That percentage would increase to 6.5 percent in the second year, and 7.5 percent after that.

"Numbers-wise, we come out all right," Violette said.

On Monday, Duncker had reiterated the association's threat to close down on Thursday and lay off most of its workers if a long-term agreement were not in place by Wednesday. Duncker described the negotiations as going "backwards" in his statement. Over the past six weeks, both NYRA and Bruno have been casting each other as the main impediments to a deal, and that rhetoric has increased as the possibility of a shutdown looms closer. Officials from both sides have cited the structure of NYRA's board as the main sticking point.

NYRA - which conducts racing at Aqueduct, Belmont, and Saratoga under a state franchise - is operating under the protection of a bankruptcy court, and association officials have said they would ask the court to block any attempt by the state to install a new operator of the three tracks in the event of a shutdown. The association could also ask the court to rule on NYRA's claim that it owns the three racetrack properties if a long-term agreement is not in place. Some state officials dispute NYRA's ownership claim.

In Duncker's statement Monday, he objected to the agreement's "business terms," but he did not elaborate. According to Reif, the negotiated agreement would provide $75 million to NYRA to allow the association to fulfill financial requirements under its reorganization plan and provide an additional $30 million for operating expenses for the 2008 fiscal year.

NYRA previously negotiated an agreement with Spitzer and Silver that would have provided $75 million for its obligations under its reorganization plan and any operating funds necessary to keep the association in business until a casino at Aqueduct opens. That agreement would have also forgiven all of NYRA's debts to the state, and it is unclear if the Bruno plan contains a similar arrangement. Under both deals, the state would take undisputed title to the tracks.

The state legislature was scheduled to adjourn Wednesday until Feb. 25. Although NYRA has said that it will not accept another short-term extension to the franchise, many legislators have said they expect NYRA officials would change their minds if a deal has been reached that the association finds acceptable, even if the deal has not been approved by the legislature.

NYRA has run racing at New York's largest Thoroughbred tracks since 1955. Its latest long-term franchise agreement expired on Dec. 31.

- additional reporting

by David Grening