Friday, May 28, 2010

State Approves Loan of $25M for NYRA by Stephen Geffon - Queens Chronicle

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State legislators approved a $25 million loan to the New York Racing Association Monday night, averting NYRA’s threat to close Aqueduct, Belmont and Saratoga race tracks on June 9 and lay off 1,400 employees.

“Enactment [of this legislation] will provide a bridge until VLT revenues are in place to fund NYRA’s operating and capital expenses,” a memorandum accompanying the NYRA loan bill states. “Absent enactment of this bill, NYRA will not have enough cash to continue the racing season at Belmont beyond the Belmont Stakes and the Saratoga racing season will be canceled.”

Under the terms of the deal, NYRA must repay the loan by March 31, ensuring it is counted within the state’s 2010 fiscal year.

If NYRA does not pay back the loan by the end of next March the state will take the proceeds from the future casino operator — from money to be paid to the association as part of the revenue sharing deal — until the $25 million is repaid.

“When we’re out of money, we stop,” NYRA President and CEO Charles Hayward told reporters at a press conference last week in Saratoga Springs. He said that the association needs $20 million to keep operating the tracks.

Hayward had been warning state officials since last December that NYRA would run out of money this summer.

NYRA officials have also claimed that the bankrupt New York City Off-Track Betting Corp. owes them $17 million. Adding to the association’s cash flow problem is the state’s failure to pick a casino developer for Aqueduct.

NYRA is slated to get a negotiated percentage of the revenue from the video lottery terminals at Aqueduct once they become operational. The state issued yet another request for proposals a few weeks ago and Gov. David Paterson has said a racino developer is expected to be chosen in August.

“The future of Aqueduct’s existence depends on NYRA’s viability,” said state Sen. Joe Addabbo Jr. (D-Howard Beach). “For the sake of my constituents, I intend to work with NYRA and continue to push for progress on the Aqueduct bidding process.”

NYRA is already facing scrutiny by elected officials concerned about its financial and operating efficiency.

Last December, state Comptroller Tom DiNapoli subpoenaed NYRA’s records to examine the millions of dollars in state payments made to the association over the past couple of years and monies owed to the state by NYRA.

The state Senate Racing, Gaming and Wagering Committee and the Committee on Investigation and Government Operations are also looking at the group’s records.

And NYRA’s problems don’t end there. The state Department of Environmental Conservation has alleged that the association violated its discharge permit by allowing horse manure, wastewater and other pollutants to run into Jamaica Bay.

NYRA has been cited with a total of 14 violations by the DEC — three at Aqueduct, nine at Belmont Park and two at Saratoga, according to a Dec. 21 notice sent to the association.

NYRA officials have said the group lacks the funds to fix and improve the facilities.

The association could be fined $37,500 daily for the pollution violations.