New York panel asking for bid scenarios

New York State's Ad Hoc Committee on the Future of Racing is expected to release a document next week outlining the broad guidelines for bidding on the franchise held by the New York Racing Association, a committee member said this week.

The document, framed as a request for proposal, will ask potential bidders to put multiple values on the right to operate racing at Aqueduct, Belmont Park, and Saratoga Racecourse, the three tracks operated by NYRA under a franchise that expires on Dec. 31, 2007, under vastly different regulatory and financial scenarios. The franchise also includes the right to operate 4,500 slot machines at Aqueduct.

The release of the document is one of the first steps toward moving the bidding process for the franchise forward. The document, however, will contain very little detail about expected changes to how racing is conducted in New York, and asks bidders to assume that there will be "no changes, minor changes, or major changes" to the state's racing law, without being specific, according to Jackson Knowlton, the managing partner of Sackatoga Stable and a member of the nine-person committee.

Bidders will be asked to recommend their own changes to the racing law, and to contemplate the value of the franchise with and without slot machines at Belmont Park, Knowlton said. Slot machines are explicitly forbidden at Belmont Park under New York law, in part because of objections from local political leaders and state OTB operators.

The document also assumes that the state owns the racetracks, Knowlton said. NYRA continues to maintain that the association owns the racetracks and the land underneath the facilities.

"What other position is a state organization supposed to take?" Knowlton said. "That is the way it is right now, and until someone proves otherwise, that is the way it is going to stay."

Charles Hayward, the chief executive officer of NYRA, said this week that the association plans to respond to the document as a bidder, perhaps with a strategic partner. Hayward was critical, however, of the document - a draft of which he said he read last week - because of its lack of detail.

"The whole point is to have everyone bidding on the exact same thing," Hayward said. "From what I've read, it sounds as if there's going to be a lot of discretion on the part of the bidders, and if that's the case, the bids are going to be very different, and there's going to have to be a couple rounds of bidding."

Hayward also said that NYRA will continue to press its case on the land claim, and that NYRA plans to present a proposal to the state to resolve the issue in its response to the committee's document.

"We may put forward our business solution as a way to resolve these questions around the land claim, and that may give us a stronger hand than some of the other bidders," Hayward said.

It is unclear exactly how the bidding process will unfold after the document is released, but the state is expected to gather the bids and then begin working for legislative changes using the bids as guidance. Another round of bidding will likely need to take place after any changes are made to the racing law, which will put the state on a tight deadline to award the franchise prior to the expiration date.

J. Patrick Barrett, the chairman of the committee, did not respond to requests for comment this week.