03/27/2008 11:00PM

NYRA posts $34M loss

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The New York Racing Association reported a net loss of $34.28 million in 2007, according to documents the association released Friday.

The loss included one-time fiscal year expenditures of $7.09 million for expenses related to NYRA's reorganization plan from bankruptcy, and an income tax settlement of $9.33 million. The tax figure was reduced from an initial $1.6 billion IRS assessment. In 2006, NYRA had a total net loss of $17.83 million.

Despite the dramatic losses, NYRA officials are optimistic that it can be profitable by 2009. Under a new 25-year franchise agreement reached with the state legislature in February, NYRA agreed to surrender title to the land on which Aqueduct, Belmont, and Saratoga sit. That means NYRA will not have to pay real estate taxes totaling $17.07 million in 2008. In addition, NYRA will not have to repay loans to the state's Capital Improvement Fund totaling $4.48 million.

NYRA filed for bankruptcy on Nov. 2, 2006, and hopes to emerge from bankruptcy as early as April 11.

"Despite showing a significant deficit again this year, we are optimistic that in 2009 we will turn an operating profit for the first time since 2001," NYRA's president and CEO, Charles Hayward, said in a press release. "NYRA faces significant challenges in maintaining and improving our facilities and operations due to the lack of resources over the last decade, and will continue to be cash-constrained until distribution of [slot machine] revenues begins."

Though 4,500 slot machines were legalized for Aqueduct in 2001, they have yet to be installed. New York Gov. David Paterson, who took over from Eliot Spitzer earlier this month, has yet to choose an operator for the project.