12/21/2007 1:00AM

NYRA no closer to a new deal

EmailThe status of the New York Racing Association's franchise remained in limbo on Friday, 10 days before the expiration of its right to run racing at the state's three largest Thoroughbred tracks.

Officials involved in the negotiations said Friday that little progress had been made on a 30-year extension to NYRA's franchise that is being sought by New York Gov. Eliot Spitzer and NYRA. The extension is supported by the Democrat-led assembly, but opposition to the plan is being headed by Joseph Bruno, the senate majority leader and a Republican. According to an official involved in the negotiations, representatives of the senate presented the state and NYRA with a new deal on Thursday night.

"There are still significant issues," said the official, who spoke Friday on the condition of anonymity.

A spokesman for Bruno, Scott Reif, said that Bruno hoped to be involved in a negotiated agreement by the end of the year that would settle the franchise issue, even if the agreement were informal.

"All of our focus right now is on moving the process forward," Reif said. "We hope to get at least a handshake agreement before the end of the year, and then address that legislatively in January."

A handshake agreement would allow NYRA to continue racing after Dec. 31 until the legislature could address a long-term solution when it comes back into session in mid-January. Any long-term deal would have to be approved by Spitzer, the assembly, and the senate. Neither the assembly nor the senate has any plans to return to session before the end of the year.

According to officials, Bruno is opposed to the 30-year length of the extension and is seeking broad powers for a new agency that would run certain aspects of NYRA's business. Bruno is also seeking a reconstituted NYRA board. NYRA has balked at some of the demands.

The lengthy negotiations are complicating a hearing scheduled for Dec. 27 in bankruptcy court. NYRA, which filed for bankruptcy late last year, is hoping to get approval for a financial reorganization plan that is based on the details of the 30-year franchise extension. Among other things, the extension would finally settle a long-standing ownership dispute between the state and NYRA by giving the state uncontested title to Aqueduct, Belmont, and Saratoga. But without the specific details of a long-term agreement in place, the judge would be unable to allow the financial reorganization plan to go forward.

If the franchise expires without an agreement in place, state law gives the Non-Profit Racing Association Oversight Board the right to select a temporary operator for the three NYRA tracks. However, NYRA officials have said that they would seek to block any other operator from running the three tracks because of their ownership claim.

NYRA's relationship with the oversight board changed significantly on Wednesday when Gov. Spitzer replaced the board's chairwoman, Carole Stone, with his own appointee. Stone was selected to chair the board when it was created in 2005 by Spitzer's predecessor, Gov. George Pataki, a Republican.

Two days before Spitzer's appointment, the oversight board adopted a resolution allowing the chairperson to negotiate a deal with NYRA for a temporary extension of its franchise, without input or approval from other board members. The new chairman, Steven Newman, is expected to work closely with NYRA on a temporary extension if a long-term agreement is not in place.

NYRA officials declined to comment on the selection of Newman, but several officials close to the negotiations said that the appointment strengthened NYRA's hand considerably. NYRA officials did not have a particularly strong relationship with Stone, who said after the meeting on Monday that she would find another operator for the tracks if NYRA declined to accept an extension.

When asked to respond to the governor's move of replacing the chairwoman, Reif, Bruno's spokesman, said, "It's up to the governor to choose who the chairman is. That's his right."