by Paul Post
SARATOGA SPRINGS – Freed from a massive financial and legal ball-and-chain, New York Racing Association can get down to the business of improving its on- and off-track product.
Officials have pledged a sweeping series of change from adoption of a steroids testing program to construction of modern backstretch dorms at Saratoga Race Course and Belmont, totaling $60 million.
It’s all part of a new era at NYRA, whose next 25-year franchise finally became official on Friday, in conjunction with emergence from bankruptcy that’s weighed the entity down for nearly two years.
"We’ve got a clean run at racing," said an exultant Chairman C. Steven Duncker. "This is really going to turbo-charge what is already the best racing and a great breeding program. "Under the new franchise, the state will assume ownership of the racetracks. Real property tax payments that once belonged to NYRA will now be made by the state – a total of $13.7 million – $1.3 million for Saratoga alone.
The state is also giving NYRA $105 million – $75 million to pay off debt and $30 million for ongoing operations – and writing off $132.6 million worth of past loans from the state. NYRA owes $31 million in back property taxes for Belmont and Aqueduct, for the years 2005 and 2006, but none for Saratoga.
Duncker said the $30 million cash infusion should be enough to keep NYRA profitable until an Aqueduct racino comes on line, perhaps late next year.
Gov. David Paterson is expected to name one of three gaming bidders for Aqueduct within the next couple of weeks. Eventually, 7.5 and 1.5 percent of gaming revenues will go to boosting purses – the amount horsemen get – and breeding programs, respectively.
The hoped-for result is that owners and trainers, lured by greater financial rewards, will send the industry’s best horses to New York with breeding farms springing up throughout the region.
While applauding NYRA’s fresh start, state officials want fans and taxpayers to benefit, too.
"Racing’s important to New York, we’re a leader nationally," said John Sabini, chairman of the state Racing and Wagering Board, the state’s regulatory body. "But at the same time it shouldn’t be a burden to taxpayers. We’ve been bailing them (NYRA) out. We won’t be doing that anymore."
As the state’s racing franchisee, NYRA will lease tracks from the state for one dollar per year.
"We believe it’s a fair agreement and one that will be easier on all parties," Sabini said. "We know where everyone stands now and that’s an important thing."
The NYRA board will go from 28 to 25 people – 14 of NYRA’s choosing and 11 political appointees. Paterson has already made five picks with two more to come. They are:
* Off Track Betting representative – Michael D. Hess, vice president of New York City OTB Corp.
* Breeders’ representative – Chester F. Broman Sr., director, New York Thoroughbred Breeders Inc.
* Horsemen’s representative – New York Thoroughbred Horsemen’s Association President Rick Violette.
* Labor representative – New York State AFL-CIO President Denis M. Hughes.
* Michael Dubb, founder Beechwood Organization and thoroughbred horse owner.
Former Senate Majority Leader Joseph L. Bruno, R-Brunswick, made his choices before leaving office, which new Majority Leader Dean Skelos, R-Rockville Center, will uphold. They are John Hendrickson, the husband of Whitney Stables owner Marylou Whitney, and Albany businessman John Nigro.
Assembly Speaker Sheldon Silver, D-Manhattan, has chosen current NYRA board member Michael Del Giudice as one of his two picks. The other will be named shortly, a spokesperson said.
Duncker said NYRA will announce its board choices early next week.
NYRA President Charles Hayward said that some capital improvements will begin shortly, such as fixing up and adding flat-screen televisions to Belmont’s back yard. Bigger, more expensive projects such as new backstretch employee housing will have to wait until gaming revenues become available, he said.
Recently, the state Labor Department criticized deplorable living conditions that stable workers endure at Saratoga and Belmont. NYRA spent $1 million for new luxury seating and a variety of new dining venues at Saratoga this year.
Hayward, however, said that Belmont’s backstretch medical center has been renovated, a new dental clinic was introduced at Saratoga and that Saratoga’s dorms were upgraded with wooden bunk beds. NYRA has said it will build new condominium-style housing at Belmont and Saratoga when gaming revenues start to flow.
Such work will cost $30 million at each track, NYRA board member James Heffernan said. Four percent of all Aqueduct gaming revenues will be dedicated to NYRA capital projects.
Hayward said that NYRA has hired a consulting firm to review and consider numerous upgrades. This could include everything from new racing surfaces to making Aqueduct more fan-friendly in conjunction with a new gaming center there.
On another front, Hayward said he expects NYRA to work more closely with OTB in the months and years to come. In June, the state took over ownership of financially-troubled New York City OTB, which had threatened to go out of business.
Joint efforts between NYRA and OTB could result in major cost savings and produce more revenue for the state.
"I know that’s a big priority for the governor," Hayward said. "That is front and center."