Horse Racing

NYRA seeks to convince lawmakers of $455 million bond plan


New York Racing Association, looking to tap $455 million in state-backed bonds to fund rebuilding Belmont Park and finally closed Aqueduct race trackon February 9, openly targeted a new, important audience: the New York State Legislature.

After persuading New York Governor Kathy Hochul to support an extraordinary borrowing scheme—in which the state would issue bonds on behalf of a private corporation—NYRA and its allies now need to convince submit to the legislature, where the idea was killed off last year, to agree. great affiliate program, lasting 30 years.

NYRA President and CEO David O’Rourke is on a long list of people to appear on Thursday ahead of a joint budget hearing by the Council Ways and Means Committee and the Senate Finance Committee. . The overall topics of the day-long hearing were economic development and taxes, but O’Rourke, who sat next to a witness during the hearing scathingly critical of the $455 million loan, focused it all. including his testimony on the Belmont reconstruction proposal.

Among those O’Rourke had to convince were some skeptical lawmakers, who last year halted the NYRA’s loan scheme amid a slew of concerns; Lawmakers who blocked the plan from moving forward last year included Senator Liz Krueger, a Manhattan Democrat and powerful chairwoman of the Senate Finance Committee.

When questioned about O’Rourke, Krueger did not specifically disclose her current position on the loan scheme. But her opening question line was very direct: what if the NYRA franchise wasn’t renewed at its scheduled expiration at 10 years, and under the affiliate plan, there were still 20 years left? for NYRA to repay?

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O’Rourke noted that the Belmont property is owned by the state, and that won’t change if the NYRA loses its current franchise.

“We don’t have to sell the land to pay you off,” Krueger told O’Rourke.

The NYRA president told her state-owned assets would “go up a lot” if the reconstruction project goes ahead.

“But only if someone else wants to take over the horse racing franchise, right?” Krueger asked O’Rourke about the possibility that the NYRA may no longer franchise the Purebred while the loan has not yet been returned to the state.

O’Rourke said the Belmont project is also creating “an incredible amount of green space” at the facility, which will be an even more valuable asset to the state. He also told Krueger that the NYRA had received a pledge that the Breeders’ Cup would return to New York if Belmont was rebuilt.

In lengthy written testimony sent before the hearing, O’Rourke presented lawmakers with the same list of reasons the project should go ahead that the NYRA used with Hochul: a plan to create jobs, won’t cost the state any direct money to fund it, and renovating a centuries-old track that hasn’t seen major improvements since 1968 while “guaranteing future of horse racing in the Empire State for many years to come.”

O’Rourke said the plan would benefit the state, which owns the tracks and properties currently leased to the NYRA under an existing 25-year franchise agreement, because it would significantly improve tells the look, operation and values ​​of Belmont Park, and provides a way to close the nearby Aqueduct and end what he calls the “superfluous, illogical situation” that changes the Purebred race downstream. between races depending on the season. The loan will allow the NYRA to turn Belmont into a year-round racecourse, with new grandstands, luxury boxes and track, along with opening a 45-acre courtyard to host major recreational events at its facility Nassau County.

But the NYRA’s plan was opposed on Thursday by groups representing government watchdogs for animal welfare organizations.

“Why is the State (New York) lending money to build a brand new luxury racing facility when the tracks they’re replacing have poor attendance records?” John Scheib, a Saratoga County businessman with the Coalition to End Horse Racing Subsidy, said in written testimony before two finance committees.

The group, whose members include People for the Ethical Treatment of Animals, and an organization that is pushing to increase public education funding in the state, question the financial logic of the revenue share being transferred. to the NYRA instead of the state government. Additionally, they note that the NYRA’s exclusive racetrack rights will end in 10 years—20 years before the $455 million they claim in state-backed affiliate money will be refunded. fully paid.

“Is there any precedent that exists in State (New York) history of lending half a billion dollars to a private business that has been shunned by banks and other lenders? If private capital does not support it? new Belmont Park, State (New York) should “No. Some of the wealthiest and most successful business executives in the world run the NYRA track; surely they could take this risk instead (New York),” Scheib noted in his written testimony.

The NYRA loan scheme was also opposed on Thursday by Reinvent Albany, a financial oversight group, which urged lawmakers to “gradually phase out unjustified subsidies” for racing at the NYRA track.

Critics argue that the money the NYRA receives from the proceeds of the video lottery terminal at Aqueduct Racetrack should have come to an end long ago for both the NYRA and others who rely on it, including accounts wallet and livestock fund. As a result, they assert that taxpayers will ultimately have to pay the $455 million that Belmont is borrowing because the repayment plan relies solely on the use of lottery revenue-sharing payments. terminal to meet principal and interest costs for the next 30 years. .

The NYRA said its Belmont project could be completed in three years, after which NYRA agreed to terminate the Aqueduct lease so that the valuable 100-acre property could be turned into a number of commercial development uses. other economy.

O’Rourke told lawmakers that Belmont’s aging condition made it impossible for New York State to host the Breeders’ Cup and race track “outdated, non-compliant (America with Disabilities Act) and lacks the modern amenities that fans expect.”

The NYRA president said the racing group must rely on public borrowing rather than the private lending market because the nonprofit corporation is “very attached to the New York government and our mandate to run the race.” Thoroughbred cars in New York are bound to the franchise government.” He presented lawmakers with the idea that since the state owns Belmont Park, the borrowing scheme “equivalent to the NYRA repairing taxpayer-owned property at no cost to the state, while creating enormous economic benefits.”

O’Rourke also pledged to lawmakers that the Belmont construction project would employ union workers and pay prevailing wages—a promise that would increase the cost of the effort but would be a requirement that Lawmakers will insist on, among other unknowns at this time, for any further borrowing on behalf of the NYRA.

“I really ask for your support of this project,” said O’Rourke, noting that backers of the plan include associations, business interests and the racing community.

The state budget, which will or may not include the NYRA alignment plan depending on how it is negotiated between Hochul and lawmakers, is due on March 31.

The NYRA’s borrowing portion of the financial hearing came nearly five hours after the economic development hearing began. It only lasted about 25 minutes.

Unlike where lawmakers heard from councils consisting of representatives of like-minded organizations, the NYRA panel saw O’Rourke and Scheib sitting side by side at a table across from the legislators. in the legislative office building opposite the Capitol.

Scheib has criticized the NYRA over horse safety issues and noted the decline in race attendance and New York tax receipts over the decades. He said the NYRA, at current taxes, would take 83 years to pay the state the betting taxes that the mobile sports betting operation paid New York State during its first year of operation in 2022.

O’Rourke does not specifically address Scheib’s points, except to say that the critic’s comparison of today’s equestrian industry to the level of 1978 ignores changes — especially with regard to appearances on television and off-track betting — seen several generations ago.

Representative Carrie Woerner, a Democrat representing Saratoga Springs, said she sees the race’s impact on many areas of her county, from agriculture to tourism.

Woerner asked O’Rourke about the importance of continuing to winter racing in upstate New York.

“That’s hugely important, especially for the livestock industry in New York,” he said.

He continues to make the continuity of races year-round “part of our core mission”.

NYRA’s plan calls for the racing consortium to return to the state $26 million from a portion of VLT revenue primarily derived from the Resorts World-run Aqueduct Racetrack casino. The NYRA receives approximately $35 million annually in proceeds from VLT’s revenue share. O’Rourke said the NYRA hopes to “accelerate” the repayment plan if the state goes ahead with the $455 million loan; he did not elaborate.

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