07/20/2007 12:00AM

Spitzer to recommend N.Y. bidder by Sept. 4


New York Gov. Eliot Spitzer will make a recommendation to the state legislature by Sept. 4 as to which company or companies should be allowed to operate New York's three largest Thoroughbred tracks, Spitzer said on Friday.

The Sept. 4 deadlines establishes a date for the recommendation for the first time. The current operator of the tracks, the New York Racing Association, has a franchise to operate Aqueduct, Belmont, Saratoga, and a casino at Aqueduct that expires at the end of this year. Any deal to award the franchise would have to be approved by the legislature.

As part of the Friday announcement, Spitzer said that the companies that have expressed an interest in taking over the franchise should submit amended proposals by Aug. 7 to reflect his office's desire to perhaps split the franchise in two, with one company operating the racing side of the business and the other operating the casino and development side. Spitzer's office has floated the idea of separating the two components of the business in recent months.

The announcement from the governor's office also indicated that Spitzer was hoping that the bidders would explore forming partnerships with each other. During recent meetings with the companies, officials in Spitzer's office have indicated that they are leaning toward awarding the racing side of the business to NYRA, according to participants in the meetings.

"Each of the four may discuss with any of the others a joint venture operation and, in its submission, may present any joint arrangement that has been reached," the release from Spitzer's office said.

So far, four companies have indicated that they are interested in taking over the franchise: Capital Play Ltd., Empire Racing Associates, Excelsior Racing Associates, and NYRA. All four made presentations in April over two days of hearings called by Spitzer.

Empire and Excelsior both released prepared responses to the Spitzer announcement that said the two companies anticipated filing amended proposals. In an interview, Karl O'Farrell, the chief executive of Capital Play, said that his company would also submit proposals.

None of the companies said that it had had discussions with any of the other bidders. O'Farrell said that while Capital is "very pleased with the team we have put together," he said the company was "open to talking to anyone."

When asked whether Excelsior anticipated exploring a partnership Katie Burke, a spokeswoman for the group, said, "Excelsior believes strongly in the strength and depth of our team."

Charles Hayward, the chief executive of NYRA, said that the association did not anticipate a partnership with the other bidders, citing their "makeup and characteristics," in reference to all three companies' proposals to operate the franchise as a for-profit business. NYRA's proposal is for a non-profit company.

"We're going to insist on a higher return to purses and racing, and we don't think that's possible in a structure where you have to return money to shareholders and equity partners," Hayward said.

Hayward also said that NYRA is negotiating a deal to obtain financing that would enable to association to build the Aqueduct casino, and may partner with another existing casino company before submitting a revised bid by Aug. 7.

The Spitzer release also said that the re-submitted materials should include the companies' "current structure and financing or . . . confirm that there have been no material changes since the last submission."

In the past month, two of the companies have made major changes. The New York Thoroughbred Horsemen's Association has dropped out of Empire, and Capital Play recently reached a partnership with the Mohegan Tribal Gaming Authority on its bid. Under that partnership, the Mohegan group, which operates the Mohegan Sun casino in Connecticut, would manage any casino operations for the franchise, according to Mitchell Etess, the chief executive officer of the company.

In addition, Excelsior Racing Associates announced on the eve of the April hearings that it had added several high-profile partners, including casino operator Steve Wynn and real estate developers Steven Roth and Richard Bronson. Materials that Excelsior later submitted for an integrity review included those partners in the structure.