02/21/2007 12:00AM

NYRA seeking appraisal of racetrack property


The New York Racing Association has filed a petition in U.S. Bankruptcy Court to receive authorization to hire a consulting company to appraise Aqueduct, Belmont, and Saratoga Racecourse, the three tracks NYRA operates under a franchise agreement that expires at the end of the year.

In the petition, which was filed with the court on Feb. 16, NYRA claims that the appraisal is necessary in order to obtain a $50 million loan from the General Electric Capital Corporation. The petition states that GE Capital will not agree to loan NYRA the money without an appraisal of the tracks, which will be used as a lien against the loan.

The appraisal touches on a complex issue that has pitted NYRA against the state government. NYRA, which filed for bankruptcy on Nov. 2, maintains that it owns Aqueduct, Belmont, and Saratoga, while the government asserts that the tracks are the property of the state.

NYRA said in the petition that the appraisal would seek to determine "the most probable price which the properties should bring in a competitive and open market under all conditions requisite to a fair sale."

The appraisal firm, Brown Harris Stevens Appraisal and Consulting, would charge $50,000 to produce the report.

NYRA is due to appear next in court on Feb. 28. The association was expected to appear in court on Thursday but the date was postponed.

The petition includes an "engagement letter" that NYRA and Brown Harris Stevens officials signed on Aug. 14, 2006, to undertake the appraisals. At that time, according to the engagement letter, the report would be for NYRA's "internal asset review."