09/12/2006 11:00PM

NYRA presses for action


Charles Hayward, the chief executive of the New York Racing Association, asked a state oversight board on Tuesday to put pressure on the state lottery corporation to approve NYRA's slot-machine agreement with the casino company MGM Grand and release $19 million in funds as part of a state loan package.

Hayward confirmed his request on Wednesday and said it included an assertion that NYRA would declare bankruptcy by the end of the year if the $19 million were not released. NYRA officials said last year at this time that the association was considering filing for bankruptcy unless the state legislature granted NYRA a loan.

Late in 2005, the legislature passed a bill granting NYRA a $30 million loan package, but only $11 million has been released, Hayward said.

Hayward said on Wednesday that NYRA's cash flow has turned negative and that the association will run out of money by the end of the year without the rest of the loan. NYRA's franchise to operate Aqueduct, Belmont, and Saratoga expires at the end of 2007, and a process is under way to identify potential candidates to take over the franchise.

"I firmly believe that if we get the $19 million, we'll be fine through the end of the franchise agreement," Hayward said on Wednesday.

The loan included two parts, with $5 million from a state economic development agency and $25 million from the state lottery. Hayward said that the state economic development agency had already released the money but that the lottery had released only $6 million of its commitment.

NYRA has been at odds with the lottery corporation for a year over its plan to begin construction on its casino at Aqueduct. NYRA officials have said that the association has filed all the paperwork necessary for the lottery to approve the casino, but that the lottery is stalling on its approval of a management agreement between NYRA and MGM. NYRA submitted the management contract last summer.

Hayward said he asked the oversight board to obtain an explanation from the lottery of why the approvals have not been obtained. In August, a spokesman for the lottery and oversight board said that the lottery was reviewing the plans and that no timetable had been set for approving the application.

Scott Reif, a spokesman for the lottery in governor George Pataki's office, did not return a phone call on Wednesday.

Hayward said that NYRA is required to make a $12 million pension payment on Friday but that the association was hopeful that the federal Pension Benefit Guaranty Corp. would waive the requirement until the loans are released.