02/28/2007 12:00AM

New panel to assess bids as state loans NYRA $32M


New York Gov. Eliot Spitzer on Wednesday announced the creation of a panel that will hold public hearings this spring in order to evaluate bidders for the franchise held by the New York Racing Association.

Spitzer's panel to evaluate potential operators of Aqueduct, Belmont, Saratoga Racecourse and a casino at Aqueduct will follow similar work done last year by the Ad Hoc Committee on the Future of Racing, which was put together by Gov. George Pataki, Spitzer's predecessor. One week ago, the Ad Hoc Committee issued a full report on its recommendations, which were developed after a year of work.

According to a release from Spitzer's office, the new panel "will invite any entity interested in operating the tracks to make public presentations of its proposal." Bidders have to notify Spitzer's office by March 6 of their intention to make a presentation to the panel, the release said, after which a schedule for public hearings will be developed.

Paul Larabee, a spokesman for Spitzer, said that the governor was confident that the panel will wrap up its work before the end of the year, when NYRA's franchise expires.

"You have to remember, the Ad Hoc Committee already did a significant amount of work on this," Larabee said. "What the governor wants to do is bring in some additional resources . . . that can bring their expertise to evaluating the presentations."

The creation of the panel was announced on the same day that NYRA officials appeared in bankruptcy court in Manhattan and received approval for a $32 million loan from the state. NYRA had been seeking a loan from private or public sources since filing for bankruptcy late last year.

NYRA's agreement with the state on the loan, which will need to be approved by the state's legislature by March 31, followed several weeks of negotiations between NYRA and the Spitzer administration. NYRA had also lined up a $50 million loan from General Electric Capital Corporation, but dropped that loan in favor of the state deal.

"Obviously working with the state is always option number one," said Bill Nader, a NYRA senior vice president.

Nader also said that NYRA anticipated making a proposal in front of the new panel created by Spitzer in the hopes of retaining the franchise.

The panel will be chaired by Richard Rifkin, the special counsel to Spitzer, and include members from the State Racing and Wagering Board, Empire State Development Corporation, and the state's Division of Budget, according to Larabee, though no panelists have been named yet. In addition, the state's Assembly and Senate will be invited to participate, Larabee said.

NYRA's franchise to operate the tracks and the casino has become enormously valuable because of the potential for the casino to generate hundreds of millions of dollars annually for both the state and a private operator.

Four bidding groups initially submitted proposals to the Ad Hoc Committee under the terms of that panel's request for proposals. Three of the groups - Capital Play Pty Ltd, an Australian bookmaking company; Empire Racing Associates, a wide-ranging partnership of racing companies and private business; and Excelsior Racing Association, a partnership including members of George Steinbrenner's family and the casino developer Richard Fields - submitted for-profit bids. NYRA submitted a not-for-profit bid.

Capital Play's bid was disqualified because the company did not provide a $1 million bond to the committee, but the company's chief executive issued a release last week stating that Capital Play would participate in any future effort to identify bidders.

Empire and Excelsior both issued releases on Wednesday stating that they also anticipated making presentations in front of Spitzer's new panel.

In its report, the Ad Hoc Committee ranked Excelsior's proposal slightly higher than Empire's proposal. NYRA was a distant third.

Larabee said that the new panel would not use a ranking system like that devised by the Ad Hoc Committee.

"The purpose of this is not to provide a score or numerical value, it's to determine what is the best option for a very significant industry in the state," Larabee said.