12/29/2007 12:00AM

NYRA extension to avert Jan. 1 shutdown

EmailThe New York Racing Association reached an agreement Thursday night with the state attorney general's office that is expected to avert a shutdown of Thoroughbred racing in New York and allow the association to operate Aqueduct until at least Jan. 23, officials said Friday.

NYRA's franchise to operate Aqueduct, Belmont, and Saratoga expires Tuesday, Dec. 31, and negotiations between NYRA officials and legislative leaders for a long-term extension were still unsuccessful as of late Friday afternoon. The temporary extension is contingent on approval of the New York State Racing and Wagering Board. The racing board scheduled a meeting for Saturday morning to consider the issue.

Dan Toomey, a spokesman for the board, said the board had received documents related to the temporary extension but declined to discuss details because NYRA officials had requested that the documents be protected. Under the state's Freedom of Information Law, companies can block public access to documents that are considered to contain proprietary or sensitive information.

NYRA officials declined to comment on the temporary agreement Friday.

On Thursday, the racing and wagering board approved race dates and racing officials for NYRA's 2008 schedule. The approval was contingent on NYRA reaching either a temporary agreement with the state's Non-Profit Racing Association Oversight Board or a long-term deal with the state legislature. The oversight board has the power to determine a new operator if the current franchise expires, but NYRA officials have said they would try to block a new operator.

Under the temporary agreement, NYRA will not concede any of its legal rights to the racetracks, officials said. NYRA, which is operating under the protection of bankruptcy court, contends that it owns the racetracks, but state officials have disputed that view while conceding that resolving the issue through the courts could take years.

That NYRA officials signed the temporary agreement with the state attorney general rather than with the oversight panel suggests that NYRA was more comfortable that its rights would be protected by the state's top legal official.

Although the temporary extension dispelled the fears of horsemen that Aqueduct would close Jan. 1, it is only a stop-gap measure, allowing state officials and legislative leaders more time to negotiate with NYRA. Any long-term extension has to be approved by Gov. Eliot Spitzer, the assembly, and the senate, but both houses of the legislature are not scheduled to return to session until Jan. 9.

Spitzer and the assembly have supported a 30-year extension to NYRA's franchise in return for the association giving the state undisputed title to the three racetracks. The deal also requires the state to provide NYRA with $75 million to help it emerge from bankruptcy. Opposition has been led by Sen. Joseph Bruno, who has pushed for a 15-year extension and major changes to NYRA's board and management.

Jeffrey Gordon, a spokesman for the oversight board, said Friday that negotiations for a long-term deal were expected to last all day Friday and could continue into the New Year's holiday. The participants include senior staff of Spitzer, Bruno, and assembly speaker Sheldon Silver. Spitzer and Silver are Democrats; Bruno, the senate majority leader, is a Republican.

"All parties are committed to finding a solution," Gordon said. "It's not unusual for negotiations like these to go on over the weekend."

NYRA officials have consistently resisted the idea of a temporary extension because they feared it would sap the sense of urgency behind negotiations for a long-term deal. If no long-term deal is reached over the New Year's holiday, the Jan. 23 expiration date of the temporary extension will set up a two-week period in which legislators will be pressed to either determine a long-term solution or extend the franchise on yet another temporary basis.

NYRA is scheduled to appear in bankruptcy court Jan. 10-15 to ask the judge to approve a financial reorganization plan based on the 30-year extension supported by Spitzer and the assembly. That hearing was initially scheduled for Dec. 27, but NYRA requested an adjournment to allow negotiations to continue. It is not clear whether NYRA would seek another adjournment.

NYRA is currently in an "exclusive period" with the bankruptcy court that prohibits any of its creditors from submitting an alternative reorganization plan. That period will expire in May, and NYRA officials are expected to resist any resolution to the franchise other than a long-term extension because of fears of losing control of the plan for the association to emerge from bankruptcy.