09/12/2007 12:00AM

Senate critical of NYRA deal

EmailALBANY, N.Y. - Members of the New York State Senate voiced dissatisfaction Wednesday with the agreement reached by Gov. Eliot Spitzer and the New York Racing Association to extend the association's franchise by 30 years, saying the Senate would seek to modify the arrangement, if not throw the deal out altogether.

The comments came during a three-hour meeting of the Senate's Committee on Racing, Gaming, and Wagering in the legislative office building. No recommendations were made on how they planned to address the agreement, but additional meetings to discuss the franchise, which expires at the end of this year, are likely.

Sen. William Larkin, the committee chairman, said that his principal criticism of the agreement is its lack of specificity.

"Somebody on the second floor just threw this together," Larkin said, referring to the state's executive branch. "They were running out of time and they just wanted to throw something out there."

Last week, Spitzer announced details of a memorandum of understanding between his office and NYRA that would extend NYRA's franchise for 30 years in exchange for the state taking title to Aqueduct, Belmont, and Saratoga - the three tracks operated by the association, which also holds the deeds to the properties. As part of the deal, the state would provide up to $75 million to help NYRA emerge from bankruptcy, and NYRA would help the state select a separate operator for a casino at Aqueduct slated to hold 4,500 slot machines.

Any deal to award the franchise needs the approval of Spitzer, a Democrat, and both houses of the state legislature. The speaker of the Assembly, Sheldon Silver, a Democrat, has already endorsed the deal, but the Republican-controlled Senate has been at best lukewarm to the proposal. Spitzer and members of the state's Republican Party have been at odds ever since Spitzer took office earlier this year.

As the hearing was taking place, Sen. Joseph Bruno, the Senate majority leader, told reporters at a different forum that Spitzer's proposal would need "a lot of changes," and that the agreement "is not going to be the final product," according to a report on Bloodhorse.com, the website of the Blood-Horse magazine. Bruno's relationship with Spitzer has been especially strained ever since an investigation revealed that members of Spitzer's staff attempted to use state troopers to gather information in the hope of discrediting Bruno.

Also on Wednesday, Spitzer said that he wanted to name an operator for the slot-machine casino by Oct. 15. Larkin criticized the plan, saying that the legislature needed more time to review the entire franchise issue.

Bennett Liebman, one of three speakers invited to the Senate committee hearing, was critical of the agreement worked out with Spitzer. A former racing commissioner who is now acting director of the Albany Law School's racing and wagering program, Liebman said that NYRA was "a reasonable choice" to operate the racetracks but that the agreement returns less money from slot-machine revenue to horsemen than the agreements in place between other New York tracks and horsemen. In addition, he said that the proposal did not put in place enough safeguards to require NYRA officials and its board to operate transparently.

Liebman was also critical of a report produced by the inspector general in early July that evaluated four bidders for the franchise on their integrity. Liebman said the report, which was based on assessments by four contractors hired by the inspector general's office, could not be used with any confidence.

"Reading this report, I have to wonder if state government can get anything right," Liebman said. The four bidders were required to submit $1 million each to the state to cover the cost of the reviews.

Steve Casscles, the counsel to Larkin, said that Larkin and other senators had similar concerns about the inspector general's report and that the senate wanted to re-evaluate the bidders on matters of integrity. Casscles said that all four bidders are still in the running. The other bidders were Capital Play, Empire Racing Associates, and Excelsior Racing Associates, each of which put together partnerships seeking to run both the racetracks and casino.

"Gov. Spitzer came out with his recommendation and said that NYRA scored high on this report, but then you look at the report, and you have to ask yourself, 'What is this?' " Casscles said. "So I think the Senate is still asking itself, 'What should this franchise look like?' because right now we have four bidders you still have to consider."