NYRA insists it owns state's three major tracks

ALBANY, N.Y. - At the first of what is expected to be numerous public hearings on the future of Thoroughbred racing in New York, the New York Racing Association reiterated its position on Tuesday that the association - and not the state - owns Aqueduct, Belmont Park, and Saratoga Race Course.

Charles Hayward, the chief executive officer of NYRA, told six members of the Ad Hoc Committee on the Future of Racing that NYRA's initial founders in 1955 had purchased the three tracks, plus a fourth that no longer exists, using money that they personally raised. Hayward said that a franchise extension approved by the legislature in 1983 - which included language asserting that the state owned the tracks - "violates some fundamental constitutional rights" that prohibit the state from seizing land.

Hayward's comments, along with supporting arguments from Tim Smith, the head of a horse racing lobbying group that is seeking to reform New York's racing law, show that NYRA is resolute about the issue even though influential members of the state legislature and the governor contend that NYRA does not own the three tracks.

The hearing, at Empire State Plaza in Albany, was the first meeting of the committee, a nine-member panel created through legislation last year. The committee has the job of creating a request for proposals for companies to take over NYRA's franchise to operate racing at the three tracks when the franchise expires at the end of 2007. The committee is expected to issue recommendations to the legislature and governor on which bid to approve.

If NYRA presses its claim as the owner of the three tracks, the process of awarding the franchise would be significantly complicated. The state would likely be unable to award a new franchise without first resolving the ownership issue in court.

The five-hour hearing included testimony from more than 25 people, including representatives of Magna Entertainment Corp. and Delaware North, two racetrack companies that have indicated an interest in bidding on the franchise.

Most speakers agreed that New York's racing law needs to be dramatically reformed before the state awards the franchise. The vast majority of speakers also called for the merger of New York's six publicly owned offtrack betting corporations with the operator of the three tracks, a politically difficult notion that has so far been resisted by officials of the OTB companies.

The ad hoc committee is chaired by J. Patrick Barrett, one of three appointees of Gov. George Pataki, a Republican. Although the committee is supposed to have nine members, the speaker of the assembly, Sheldon Silver, a Democrat, has yet to make his three appointments. The other three appointments were made by the senate majority leader, Joseph Bruno, a Republican.

Bernadette Castro, the commissioner of the New York State Office of Parks, Recreation, and Historic Preservation and a recent appointee to the New York State Racing and Wagering Board, was the most active member of the committee during the hearing, frequently asking follow-up questions.

The committee was scheduled to hold a second hearing on Wednesday in Manhattan. Scheduled speakers were to be D.G. Van Clief, the chief executive of the National Thoroughbred Racing Association; Alan Marzelli, the chairman of The Jockey Club; and officials of Woodbine Race Course.

The committee is expected to hold numerous hearings over a six-month period before providing recommendations to the legislature. A request for proposals is expected to be issued by the middle of 2006.

Frank Stronach, the chairman of Magna Entertainment, the country's largest racetrack operator, told the panel that Magna believed that the state should issue two requests for proposals, one for the racing operations at the three tracks and another for a planned slot-machine operation at Aqueduct. The Aqueduct casino is expected to open by the end of 2006.

Stronach said that Magna was interested in finding a partner in its bid to take over the franchise. Magna Entertainment has lost more than $350 million over the past four years and recently reached an agreement to sell a racetrack in Pennsylvania in order to shore up its balance sheet and eliminate debt.

The afternoon session of the hearing was dominated by representatives of Saratoga Springs, N.Y., the home of Saratoga Race Course. The speakers urged the committee to protect Saratoga's meet regardless of the outcome of the bid for New York's racing franchise.