NYRA bankruptcy won't halt racing

OZONE PARK, N.Y. - If the New York Racing Association does not get approval to sell 80 parcels of land adjacent to Aqueduct, it will most likely file for bankruptcy by the end of the month, NYRA president Charles Hayward said Saturday.

Hayward said, however, that he believes a bankruptcy filing would actually enable NYRA to continue racing uninterrupted into 2006. Hayward said that stopping racing "is not an option for us."

Filing for bankruptcy became a greater possibility when the state put a stop to NYRA's intended sale of 19 paintings at Sotheby's auction house last Friday.

"I think a bankruptcy filing will give us a little room to breathe, and I think in terms of running the races, I think it should just be business as usual," Hayward said in Aqueduct's press box Saturday afternoon. "You got plenty of precedent for airlines that have gone into bankruptcy. People worrying about their tickets - they go to the airport and they get on the plane. It's not going to be pleasant, and again it isn't the first alternative. We would really like the state to give us the latitude to work these issues out."

Hayward also said that by filing for bankruptcy, NYRA could ask the bankruptcy court judge to settle the hotly debated issue of whether NYRA or the state owns the land on which Aqueduct, Belmont, and Saratoga sit. NYRA claims it owns the land, but legislators claim the state owns it.

NYRA maintains the franchise to run racing at those three tracks until Dec. 31, 2007. A bidding process will be held to determine who will operate the tracks beginning in 2008.

On Tuesday, Hayward and two other NYRA officials - acting chief financial officer Irene Posio and general counsel Pat Kehoe - will meet with Carol Stone, the head of the oversight panel created last summer by the state legislature to oversee NYRA's business affairs. At that meeting NYRA will seek permission to proceed with a sale of 80 parcels of land on the other side of the subway tracks adjacent to Aqueduct's grandstand as well as a few other things that would help NYRA generate revenue. Hayward estimates that proceeds of a land sale could approach $20 million and enable it to operate until revenue from video lottery terminals kicks in, supposedly in early 2007.

Hayward said NYRA would also ask the panel's assistance in getting the state lottery to approve the VLT project, which would involve the installation of 4,500 slot machines at Aqueduct. The lottery's approval is the last remaining hurdle for the project to continue. The VLT project, which NYRA is doing in partnership with MGM, has been on hold since Aug. 7, 2003. NYRA officials had hoped to get the VLT's operational by the fourth quarter of 2006, but that timetable may have to be pushed back.

NYRA will also seek the state's help in challenging New York City's assessment of the property value of Aqueduct. Hayward said that a victory in that challenge would provide NYRA a windfall of $4 million in tax relief. According to Hayward, NYRA won a similar challenge against Nassau County regarding the assessment of Belmont Park, which netted NYRA $5 million.