Auction nixed, NYRA seeks cash

After state authorities nixed his plan to sell 19 paintings at auction, the head of the cash-strapped New York Racing Association said Thursday that he would concentrate instead on getting state approval to sell 80 parcels of land near Aqueduct.

Charles Hayward, NYRA's chief executive, said that the loss of projected revenues from the auction - approximately $1.3 million, according to NYRA - will put even more pressure on NYRA's cash position, which he said has been steadily eroding. Hayward said NYRA faces the possibility of filing for bankruptcy as early as the end of the year unless the association finds other ways to raise cash.

"We originally projected back in the early fall that we would run out of cash by the end of November," Hayward said. "We did a little better with the Breeders' Cup than we had expected, but I would still say we're truly looking at the end of this month."

The paintings were scheduled to be sold at an auction of sports artwork Friday morning at Sotheby's in Manhattan, but Sotheby's pulled the paintings from the sale after the New York State Racing and Wagering Board threatened to ask the state attorney general's office to seek a preliminary injunction if the sale of the paintings went forward. The racing board contends that the state owns the paintings, and that in order to proceed with the sale, NYRA needs approval from both the racing board and a panel created last summer by the state legislature to oversee NYRA's business affairs.

Both the racing board and the oversight panel have taken a negative position on the planned land sale, which NYRA hopes will raise $20 million. NYRA has already secured a broker to look for buyers for the properties, which are largely vacant lots on the opposite side of the subway tracks adjacent to the Aqueduct grandstand.

Hayward said he is scheduled to meet on Tuesday with Carole Stone, the chairwoman of the oversight panel, to discuss the land sale. Two weeks ago, the oversight board made several recommendations to NYRA to address its cash shortfall, including raising takeout rates, mortgaging several of its contracts, and seeking a loan from MGM Grand, NYRA's partner in a project to build a slots casino at Aqueduct.

The casino is scheduled to open late next fall. Hayward has said that NYRA needs only a temporary solution to its cash-flow problem, based on estimates of the revenue that will eventually be provided by the casino.