11/12/2014 7:53PM

NYRA: No immediate plans for Aqueduct

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Barbara D. Livingston
NYRA president and CEO Chris Kay said Aqueduct lost $11.9 million for the 2013-14 winter meet.

NEW YORK – Aqueduct isn't going away just yet.

When the New York Racing Association Reorganization Board makes its recommendations to the state regarding the future of the company and its three racetracks, it will not include a proposal regarding the future of Aqueduct, NYRA president and chief executive Chris Kay said Wednesday at a meeting of the board of directors in Manhattan.

The prevailing theory since Gov. Andrew Cuomo appointed a new NYRA board in the fall of 2012 was to consolidate racing into one downstate track – presumably Belmont Park –  and Saratoga. Cuomo has made public comments that the property on which Aqueduct sits could be put to better use such as low-income housing.

However, Kay said that since the current board of directors is only “temporary and transitional … it would not be appropriate to make any decisions that will have such a long-term and permanent effect on not only NYRA but the communities we serve and the horse-racing industry in this state. Thus, our current thought is not to include any recommendations regarding any changes in the operations of either Aqueduct or Belmont as part of our reorganization plan.

“Instead, if there is going to be any change – and we’re not commenting at this point if there is –  that would be the responsibility of the next board, the board that will control NYRA’s future for decades to come,” Kay added.

Kay mentioned to the board that it has invested $14 million over the last year-plus into Aqueduct. However, Kay also claims that Aqueduct’s 2013-14 winter meet lost $11.9 million, exceeding the budgeted loss by $2 million.

The current board of directors was approved in 2012 by Cuomo, who required that the board make recommendations on the future of NYRA within three years, with the expectation of returning it to private control in the fall of 2015. The current board is set to dissolve in October.

Most of Wednesday’s meeting was spent discussing what a new NYRA board would look like, but offered few other details.

Working under the current statutes, the NYRA board will recommend that whoever runs the three racetracks remain a not-for-profit entity. It also recommended that the board be a smaller group than is now in place. Currently, there are 17 board members; NYRA is considering proposing about 13.

As far as any concrete plans for the future, none were offered.

However, Kay and Susanne Stover, NYRA’s chief financial officer, said that NYRA, exclusive of revenue from the video lottery terminals at the Resorts World casino, will show a surplus of $1.5 million 2014, six times what NYRA had budgeted. NYRA is budgeting for a surplus of $2.1 million in 2015.

"Our business plan reflects a business headed in the right direction," Kay said.

This new board has constantly talked about making NYRA profitable without factoring in VLT revenue, though Kay said, “I’m not suggesting in any way that we aren’t entitled to those funds.”

NYRA has become profitable by a combination of cutting workforce, raising prices as well as having a fantastic Belmont Stakes Day, which brought in $4.4 million above budgeted revenue. Kay indicated that there would be a further price increases for next year’s Belmont Stakes, the details of which likely will be forthcoming at the Dec. 3 board meeting.

Kay said NYRA is using a lot of the VLT revenue to take care of pension benefit and federal tax expenses.

As far as racing operations are concerned, Kay said, “We can’t afford to spend more money to operate on a daily basis than we generate in revenue.”

Most of the Sept. 29 board meeting was spent talking about how well the Saratoga meet did financially. It was not mentioned at Wednesday’s board meeting that all-sources handle at the recently concluded Belmont meet was down 9.8 percent, or $32 million, compared with the 2013 Belmont fall meet.

Business has been no better at Aqueduct through the first two weeks of the meet. For the first two weeks of the meet, average daily all-sources handle is $5,774,159, down 22 percent from $7,404,213 through the first two weeks last year. This fall, Aqueduct has run 11 cards, compared with eight through two weeks last year.

Part of Belmont’s handle decline was due to 47 races being taken off the turf due to inclement weather. Kay said there has been talk about putting a synthetic track inside of Belmont’s two turf courses in part to keep fields intact when races are rained off the turf.

“There’s another reason to have a synthetic inner track” at Belmont besides the potential of conducting winter racing, Kay said.

In other news:

• Kay said the 2015 Saratoga meet would remain in its current format of 40 days spread over 6 1/2 weeks. There had been some discussion about racing five days a week, thus expanding by one week the 40-day racing season.

Kay wouldn’t specifically address the question as to why that decision was made. Asked if there was pushback from upstate residents and/or businesses about expanding the meet, Kay said, “It would be fair to say no matter what I’ve said since I started here, there’s always been somebody who gives me pushback.”

• Stover said Aqueduct could host a version of the Claiming Crown that would be held in late March over the inner track before NYRA takes a short break.