12/08/2011 4:34PM

Monmouth lease deal in jeopardy amid dispute

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Talks over a five-year lease for Monmouth Park have collapsed amid squabbling between the state, its horsemen, and the operator of the Jersey Shore racetrack, according to New Jersey racing officials.

The dispute arose late last week when industry stakeholders gathered Friday to sign agreements that would allow New York real-estate developer Morris Bailey to lease Monmouth from the state for five years, including 2011. At the meeting, according to a representative of the state’s horsemen’s association, officials from Gov. Chris Christie’s administration said that horsemen would need to give up a permit for a Thoroughbred meeting at the Meadowlands or the state would back away from the deal, leading to negotiations over the weekend that failed to produce a final agreement.

Bailey, a Thoroughbred owner and breeder, now says that he wants to back out of the agreement, his attorney, Ronald Riccio, told the New Jersey Star-Ledger. Riccio did not return a phone call Thursday.

“Mr. Bailey is very disappointed the transaction could not be closed,” Riccio was quoted as saying.

The agreement between Bailey and the state to lease Monmouth is part of a complex series of pacts among the state, Bailey, New Jersey’s Standardbred and Thoroughbred horsemen, and the leaseholder of the Meadowlands, Jeff Gural. The agreements cover the amount of live racing at the two tracks; the liabilities and rights of the leaseholders as it pertains to both the tracks and off-track betting facilities and licenses; the splits of the revenue from wagering that go to purses; and the distribution of any potential revenues from casino gambling at the tracks if slot machines or other types of gambling are legalized down the road.

John Forbes, president of the New Jersey horsemen's group, said that Christie’s representatives told the horsemen Friday that the state’s attorney general was “uncomfortable” with the Thoroughbred horsemen holding the permit for Thoroughbred racing at the Meadowlands, but he said the officials did not elaborate. Under the lease this year, Bailey held the lease for 50 days at Monmouth, and the Thoroughbred horsemen had a 21-day permit for racing at the Meadowlands, which they used to hold an additional 21 days at Monmouth.

Also related to the situation, Dennis Drazin, the chairman of the New Jersey Racing Commission, resigned his position last week. Drazin is the former executive director of the New Jersey Thoroughbred Horsemen’s Association, and he will now act as a consultant to the association in any further negotiations with the state over the Monmouth lease, Forbes said.

Michael Drewniak, a spokesman for Christie, declined to comment about the status of the talks but disputed Forbes's description of the events leading to the collapse.

"All I can tell you is that Mr. Forbes' story is not at all an accurate characterization of events," Drewniak said.

As part of his campaign for governor last year, Christie vowed to push the state out of the racing business, citing ongoing losses from racing at the New Jersey Sports and Exposition Authority, which owns and operates the two tracks. Shortly after being elected, he issued requests for proposals to lease the tracks and identified Bailey and Gural as the two potential leaseholders of the tracks.

Negotiations were said to be complete on the agreements by mid-summer, but the talks also hit hurdles along the way. In late summer, Bailey said he wanted to back out of the deal because the state was attempting to shift some financial liabilities from the meet this year to his lease, and it remains unclear if those issues were resolved.