02/16/2007 12:00AM

Selection delays may extend NYRA tenure

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With a little more than 10 months before the franchise held by the New York Racing Association expires, mounting delays in selecting a successor have created the possibility that a new operator will not be able to take over by the Dec. 31 deadline.

"Every week that passes, it makes the process a lot more difficult," said Gary Pretlow, an assemblyman and chairman of the Racing, Gaming, and Wagering Committee. "NYRA's franchise may have to be extended for a year if we want to do this right."

The reasons for the delays include NYRA's decision to file for bankruptcy, the reluctance of some key legislators to accept the conclusions of a state panel that evaluated bids for the franchise, and the complexity of rewriting the racing law to allow a new franchise holder to take over. Pretlow, in a recent interview, said that a franchise extension is one of the more likely possibilities to give lawmakers and Gov. Eliot Spitzer time to sort out the issues.

The possibility of an extension underscores the complicated political situation in New York and the high stakes for the racing franchise, which includes the right to operate Aqueduct, Belmont Park, Saratoga Race Course, and a casino at Aqueduct that has not yet opened but is expected to generate hundreds of millions of dollars a year for the franchise holder.

Late last year, a state panel - the Ad Hoc Committee on the Future of Racing - released rankings of three prospective franchise-holders, putting a group led by New York Yankees general partner Steve Swindal, Excelsior Racing Associates, at the top of the list, followed by Empire Racing Associates, a partnership comprising New York political and business leaders, a vast array of racing companies, and the New York Thoroughbred Horsemen's Association. NYRA's bid to retain the franchise was ranked a distant third.

But earlier this year, the speaker of the Assembly, Rep. Sheldon Silver - who appointed three members of the nine-member panel - said the committee's work should be scrapped, contending that the committee was a creation of former Gov. George Pataki.

Skip Carrier, a spokesman for Silver, said on Friday that Silver's position had not changed since he made the statements.

"What the speaker is saying is that the process has to be one in which the governor has to be comfortable," Carrier said. "The governor has the right to look at the process and determine how it goes forward, because he is going to be in office for at least three years of the new franchise holder, and the stakes for New York and the racing industry are too high."

Carrier said that Silver remains confident the franchise can be awarded this year despite the possibility of having to repeat the process of identifying potential bidders.

"The legislature awards thousands of contracts every year in less than 11 months," Carrier said.

Gov. Spitzer has been battling with the legislature, which defied him in its selection of a new comptroller. Spitzer has not made any public statement on the the racing franchise, and his office has not returned phone calls over the past two weeks requesting a comment on NYRA.

It is unclear whether the legislature can do much of anything of substance until NYRA's fate is resolved in bankruptcy court. NYRA is due to appear in court on Feb. 22 to ask for approval of a loan from General Electric for $50 million. NYRA was initially scheduled in court on Feb. 6 but asked for a two-week delay to pursue talks with the state about a settlement of the state's petition to dismiss the bankruptcy. It was unclear Friday if NYRA has had any discussions with the state, although NYRA's senior vice president, Bill Nader, said earlier in the week that "we're always open to talking."

By far the most contentious issue in the NYRA bankruptcy case is its contention that it owns the land and racetracks. Pretlow said that he believes NYRA filed for bankruptcy solely to put the issue in the federal court system and take it out of the legislature's hands, increasing pressure on the state to pursue a settlement with NYRA over the issue in exchange for a franchise extension.

Bennett Liebman, a former racing commissioner who is now the coordinator of the racing and wagering program at Albany Law School, said the land issue and Spitzer's battles with the legislature have moved the NYRA franchise issue into murky territory, with no clear path in sight.

"Sure, they could come up with a way" of awarding the franchise before Dec. 31, Liebman said, "but no one, no one, knows where this is headed. It really is truly up for grabs. The only beneficiary of all this, to a small degree, is NYRA."