By PAUL POST
SARATOGA SPRINGS — New York Racing Association will need one more temporary extension before its new 25-year franchise becomes official, President and CEO Charles Hayward said Tuesday.
NYRA had hoped to have its bankruptcy reorganization plan confirmed today, which details how the firm will pay off creditors and emerge from Chapter 11. First, it must resolve its 16-month-old lawsuit against the state.
Also, NYRA is going from a nonprofit to a not-for-profit organization, a legal distinction that will allow it to retain profits. This, too, is a complicated process with details yet to be worked out.
“It’s eventually going to happen,” Hayward said. “It’s just a matter of when.”
NYRA’s franchise expired Dec. 31. Since then it’s been operating with three different temporary extensions. The current one expires Friday and the next will be its fourth and hopefully final one.
“I don’t think there’s going to be any issues,” Hayward said. “It’s just a protracted process.”
The new extension requires approval by a five-member state Oversight Board that monitors NYRA’s business operations. The board is expected to meet Friday in Albany, with some members participating via video-conferencing from Manhattan.
Oversight Board Chairman Steve Newman said he doesn’t anticipate any problem getting the extension approved.
“There’s nothing controversial,” he said.
It’s hoped that the bankruptcy confirmation hearing will be Wednesday, March 19, two weeks from today, Hayward said. The extension might go until April 1, to coincide with payroll processing, or it could be extended for the length of the current Aqueduct meet, which expires April 27. The spring and summer Belmont meet begins April 30.
NYRA filed for bankruptcy Nov. 2, 2006 and shortly afterward filed suit against the state and several top officials, including former Gov. George E. Pataki. In the suit, NYRA maintained its ownership of the racetracks and charged that Pataki and other leaders deliberately caused NYRA’s financial failure so the state could wrest control of the tracks.
In the new franchise agreement, NYRA will turn track ownership over to the state. In return, it gets $75 million to pay off creditors, $30 million to cover operating costs until an Aqueduct racino is built and a roughly $200 million state debt will be forgiven.
Last week, the bankruptcy court approved NYRA’s plan to sell 66 plots valued at $15 million to $20 million. NYRA says it needs the cash to keep the firm running.
“They’re at Aqueduct on the other side of the A train subway line,” spokesman John Lee said. “They’re outlying parcels, not accessible, not involved with racing. It’s been kind of a tax and liability burden on us.”
NYRA will be allowed to hold auctions without further bankruptcy court approval. But it must notify interested parties in its Chapter 11 case before such sales and disclose the purchaser’s identity and offering price.
The so-called “new” NYRA will have a significantly different board makeup. Previously, NYRA could have up to 20 board members of its own, along with eight political appointees.
The reconstituted board will have 14 NYRA members and 11 political appointees including representatives of horsemen, breeders and labor groups and Off-Track Betting.
NYRA Chairman C. Steven Duncker and the board’s three vice chairs will meet soon to decide who NYRA’s representatives will be. Hayward said the board makeup will likely be announced when the new franchise becomes official, sometime in April.