10/07/2004 11:00PM

Schwartz leaving NYRA post after four tumultuous years

NYRA chairman Barry Schwartz will step down, effective Dec. 31.

Barry Schwartz, the chairman of the New York Racing Association, will step down effective Dec. 31 after four eventful years at the helm of one of the country's most powerful racing companies, Schwartz announced on Friday.

A member of NYRA's board will be elevated to the chairman's position, Schwartz said. The association will also name a president and chief executive officer in the next several weeks.

Schwartz, 62, the former chief executive of Calvin Klein, said he was leaving to pursue "the personal interests that I've had to neglect for four years now." Schwartz is an avid horseplayer, breeder, and owner, and prior to his appointment to NYRA, he frequently traveled to Japan and other parts of Southeast Asia. Schwartz had indicated in August that he was considering resigning.

"I looked at the calendar six months ago, and saw that the Oct. 13 board meeting would be the four-year anniversary of when I was appointed," Schwartz said on Friday. "I kind of decided then that enough is enough. It's been a great run, but I'm tired, and I want to get back to doing the things I love."

Schwartz's tenure has been one of the most tumultuous in the association's 49-year history as the state-sanctioned operator of Saratoga, Belmont, and Aqueduct. Under Schwartz, NYRA made an unsuccessful bid for New York City Off-Track Betting Corporation; reached an agreement with federal prosecutors to avoid a criminal conviction on conspiracy tax fraud charges; had two dozen mutuel employees plead guilty to various tax-evasion charges; played host to the Breeders' Cup just seven weeks after the Sept. 11 terrorist attacks; and saw three horses fail to win the Triple Crown in the Belmont Stakes.

Schwartz has pushed for changes to benefit the horseplayer, including two different takeout reductions. He was frequently outspoken in responding to criticism from powerful politicians and other racing executives. But his time at NYRA will almost certainly be remembered most for the unrelenting pressure over the past two years applied by state and federal prosecutors as they scrutinized NYRA's operations.

Schwartz said that NYRA would name a new president and chief executive as early as next week but declined to identify candidates. The association had previously discussed the position with Tim Smith, the former chief executive of the National Thoroughbred Racing Association, but the two sides were unable to come to terms. Schwartz said he would spend his remaining time at NYRA "showing the new president the ropes."

The president and chief executive is expected to play a major role in NYRA's daily operations while the chairman's position will likely focus on long-term planning and strategy, Schwartz said.

Stephen Duncker, a former managing director of Goldman Sachs, has recently been responsible for most of NYRA's long-term operations. Duncker along with fellow board member Peter Karches was named co-chief operating officer on an unpaid basis in September 2003 after Terry Meyocks, NYRA's former president, resigned under pressure from regulators.

The investigations into NYRA's mutuel department began under Schwartz's predecessor, Kenny Noe, but they intensified in 2002, when a number of NYRA mutuel tellers pleaded guilty to tax fraud charges. The guilty pleas eventually led to a deferred prosecution agreement between NYRA and the federal government. The agreement requires the association to restructure and operate under the scrutiny of a court-appointed monitoring firm until next summer.

Schwartz said that he has enjoyed his time at NYRA but that the last two years were a "chore." He said he did not feel obligated to remain at NYRA until the monitors leave in June 2005 because NYRA has "put its problems behind it."

"The first two years were great," Schwartz said. "We got a lot done, we were really on a roll, but after the attacks from the attorney general started in earnest, the whole focus was only on those issues, and it became a real chore. But I think we're through it. I really do. I think NYRA is in a great position now."

NYRA's franchise, which is awarded by the legislature, expires at the end of 2007.