Judge Approves NYRA-NYS Deal
 

From Charlie Hayward's Office.. Alleviates financial concerns until further deals are struck getting the Aqueduct Slots construction going, etc..



BANKRUPTCY COURT APPROVES DEBTOR IN POSSESSION FINANCING;

STATEMENT FROM NYRA PRESIDENT & CEO CHARLES HAYWARD

The United States Bankruptcy Court for the Southern District of New York approved a proposal submitted jointly by NYRA and the State, for the State to provide NYRA with debtor in possession financing during calendar year 2007, of an amount up to $32 million, subject to definitive documentation of a proposed order and the Amended and Restated Credit Agreement.

Today’s court approval will bring the State’s total post-petition funding commitment to $40 million.

The New York Racing Association Inc. (NYRA) is a private, non-profit racing association established in 1955, which owns and operates the three largest racetracks in New York - Aqueduct, Belmont Park and Saratoga . It is a non-profit, non-dividend paying corporation governed by a Board of Trustees, whose members, by law, receive no compensation or dividends. Since its inception, NYRA has contributed more than $3 billion in direct tax revenue to the State of New York .

$3 billion in tax revenue by the NYRA. I just don't see how that can be ignored and that must be a big reason Spitzer is reviewing the bids for the NYRA franchise.

Interesting that the State decided to free up the money now for NYRA. Was it because they didn't want the bankruptcy judge to permit NYRA to use the deeds as collateral for a loan from GE Capital?

It just seems to me, instinctively, that the NYRA franchise is worth a heckuva a lot more than the top bid of $1.8 Billion from that Australian outfit.

It's wide open now and will be decided at the highest levels of NY government in a "transparent process." I think this is good for racing and NYS.

The NY Tracks might be worth something for the Slot value only.

Considering the numbers being wagered at smaller harness tracks that have slots in place already, the NYRA track--Big A for now and possibly Belmont in the future, could make the NY racing very valuable from a bottom line point of view.

I find it hard to believe any court will allow the Property to be awarded to a franchise unless it was authorized some time in the past, in writing. Unless NYRA has proof, that as a franchise, they made some sort of payments for the land. There doesnt seem to be any precidence for that call.

As for someone mentioning that Spitzer is re-evaluating the bids vs going ahead with the Excelsior bid, there may be more to that than one knows.
I know several people who have either written or e-mailed various newspaper reporters (myself included) and or even Mr. Spitzer himself. It is in regard to some comments made by one of the committee members on the management of Excelsior, specifically the people who run, or perhaps ruined (IMO), the Chicago harness tracks--Maywood and Balmoral.

I am enclosing a part of an article I read--link for the full article is listed at the bottom of my post.

Steinbrenner and Swindal are partners with the Johnston family in two Chicago-area harness tracks, one of which (Sportsman's Park) previously had thoroughbred racing. John Johnston is a former jockey and Billy Johnston has been involved in racing, operations and management for more than four decades.
The Steinbrenners also have owned or had interests in several other tracks such as Tampa Downs, Hialeah and Hawthorne Race Course, said Swyer, who personally visited the Chicago tracks. "Their facilities are very impressive," he said. "They invest a lot of money in their facilities."

The part that Mr. Swyer(a committee member) mentioned about facilities being impressive and money being invested is very debatable. I have heard from several horsemen and fans that both facilities are not in the shape that one might believe from that quote. I believe, but have no confirmation other than word of mouth, that Balmoral had several citations for potential fire hazards in the recent past. In addition, three of the top five drivers have left that circuit as purses are no longer strong enough to make a decent living.

I think Mr. Spitzer is doing the right thing by re-evaluating the proposals being made. I think based on Mr. Spitzers no nonsense approach to the law, when he was Atty General, he wants to make the "right" decision. I would love for Mr. Spitzer, or an associate of his, to make an unannounced appearance at the Chicago tracks to see for himself how management is doing an whether the facilities are "impressive". These are supposedly the people with the "experience" to run one of the top racing circuits in the USA?

http://www.saratogian.com/site/news....d=602469&rfi=6

I am not taking sides here, however, in reality -- the payment of taxes does not constitue ownership. There are several forms of agreements, arrangements, entity formations, etc. where a "tennant" or non-owner pays taxes, specifically real estate taxes. This is very common in an arragement known as a "life estate" which is very common in the estate planning field.

In the past, there have been people who said that NYRA has a "life estate" on/over/etc. the land (so to speak). I've never read the agreements so I really can't say -- I guess that's why it will be decided by a judge, LOL.

Eric

Good point. Another aspect is that the interest rate that will be charged by the State is incredibly more favorable than what GECC was going to charge.

Eric

Anyone that says Hawthorne is impressive has seriously low standards.