04/01/2007 11:00PM

Steinbrenners pull out of bidding group

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The Steinbrenner family and the real estate development company Tishman-Speyer have dropped out of Excelsior Racing Associates, one of the groups that is bidding on the franchise held by the New York Racing Association, a spokesman for the Steinbrenners and the company said Monday.

The announcement came three days after Jennifer Steinbrenner, the daughter of New York Yankees managing partner George Steinbrenner, filed for divorce from her husband, Steve Swindal, a member of the Excelsior partnership and a general partner of the Yankees. After the announcement of the divorce filing, Excelsior said that Swindal would remain a member of the partnership.

"The Steinbrenner family and all of their related entities have withdrawn from the Excelsior bid," Howard Rubenstein, the Steinbrenner spokesman, said in a statement. "The reason is to pursue other opportunities. We wish them good luck."

Swindal and four members of the Steinbrenner family owned a 23.75 percent share of Excelsior. The stake was nominally held by Kinsman Racing Club, which included Swindal and George Steinbrenner's two daughters, Jennifer and Jessica, and two sons, Harold and Henry. Tishman-Speyer owned a 5 percent share.

The withdrawal of the Steinbrenners will likely have a significant impact on Excelsior's business plan. In a proposal filed last year, Excelsior said that the group's ties with the YES network, a cable channel owned by the Yankees and New Jersey Nets, would benefit its bid by providing a television outlet for races. In addition, the group's bid played up its association with the tradition of the Yankees and the team's marketing experience.

Excelsior said in a statement on Monday that it planned to go forward with its bid and that additional details would be announced later this week. Katie Burke, a spokeswoman for Excelsior, said those details would include how the group's partnership will be restructured.

Last year, the Ad Hoc Committee on the Future of Racing, a state panel put together by Gov. George Pataki, ranked Excelsior's bid first among three bidders. However, Pataki's successor, Eliot Spitzer, said that his office would not be bound by the recommendations. Hearings are scheduled for April 10-11 for presentations from potential operators of the franchise, which includes the right to operate Aqueduct, Belmont, Saratoga, and a casino at Aqueduct.

Four bidders plan to appear, according to Paul Larabee, a spokesman for Spitzer: Excelsior; Empire Racing Associates, a partnership of racing industry companies and New York business people; Capital Play Inc., an Australian bookmaking company; and NYRA. The companies had a deadline of noon Monday to submit written proposals.

Larabee said that Excelsior's proposal would have to be amended if the partnership's structure had changed materially.

"If there is a significant change to the proposal they would have to make note of it to us before the hearings," Larabee said. "And I'm certain it will be a topic of questioning by the panelists."

In addition to Swindal, the Excelsior partnership includes Richard Fields, a casino and real estate developer who was a major contributor to Spitzer's campaign, and the Johnston family of Illinois, which owns the harness track Balmoral Park. The Johnstons are longtime friends of the Steinbrenners. Fields had previously owned a 47.5 percent stake in Excelsior and the Johnston family a 23.75 percent stake.

Capital Play indicated last year that it would submit a proposal but was disqualified for failing to provide a $1 million bond. On Monday, the company reported that its bid included a commitment to invest anywhere from $730 million to $1.8 billion in the tracks and casinos.

Although NYRA has filed for bankruptcy protection, the franchise has never been more valuable because of the prospect of slot machines at Aqueduct and possibly Belmont. Gambling analysts expect a casino at Aqueduct to be the most profitable on the East Coast on a per-machine basis.