09/06/2011 3:17PM

Monmouth operator claims lease problem


An attorney for Morris Bailey, the real estate developer who is operating Monmouth Park in New Jersey under an unsigned lease with the state, contends New Jersey has violated conditions of a memorandum of understanding incorporating the lease, according to state racing officials.

The attorney in a letter cites a “breach” of the memorandum of understanding, according to John Samerjan, a spokesman for the New Jersey Sports and Exposition Authority, the state agency that owns the track. The memorandum of understanding, which gave Bailey the right to operate Monmouth for the next five years, was signed on June 24 between officials of the authority and attorneys for Bailey, but progress has been slow in coming to a final agreement that would make the memorandum legally binding.

Samerjan said that the authority would not discuss the alleged breach, and he characterized the letter as a ploy by Bailey and his attorneys to influence the final talks on reaching the formal agreement.

“We can only speculate that this is some misguided negotiation tactic on [Bailey’s] part,” said Samerjan. Asked if the letter could put the current Monmouth Park meet in jeopardy, Samerjan said, “The simple answer is, no.”

The attorney that negotiated the memorandum of understanding on Bailey’s behalf, Ronald Riccio, did not return a phone call on Tuesday.

John Forbes, the executive director of the New Jersey Thoroughbred Horsemen’s Association, said that horsemen had not been informed about any hurdle to reaching a final agreement on the lease. The association was involved in the discussions over the lease, and was a party to an agreement in the lease over the distribution of purses over the next five years at the track, including a guarantee of $400,000 in purses a day.

“We’re as in the dark as anyone here,” said Forbes. “We haven’t heard a thing, but I’m sure we will.”

Negotiations over the memorandum of understanding nearly broke down just prior to the agreement being reached in late June, with both sides threatening to walk away from the discussions.

The enactment of the memorandum of understanding hinges on the approval of Gov. Chris Christie, who earlier ordered the sports authority to put Monmouth Park and another track, the Meadowlands, up for bid, citing ongoing losses at the tracks. According to financial records released by the state, Monmoth lost approximately $6 million in 2010, despite a $19 million subsidy payment from Atlantic City casinos.