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Tuesday, November 21, 2006

Excelsior In The Money

- The surprising decision by the Ad Hoc Committee on the Future of Racing to tab Excelsior Racing Associates as their recommended bidder in a photo finish over Empire Racing appears to have come down in large part to the bottom line; and why should we be surprised?

The nine-member board was split on Excelsior and Empire on many facets of the bid. But Excelsior ran away from the competition with its overall plan for the future of the tracks and its guarantee to provide the state with a $100 million payment to lease the tracks if slot machines are allowed at Aqueduct Raceway and $200 million up-front if slots are allowed at both Aqueduct and Belmont Race Tracks. [Albany Times-Union]
In addition, the NY Times reports on an offer to assume the roughly $60 million worth of outstanding pension obligations to track employees, an offer that Empire did not make.

The potential windfall to the state from a Belmont racino is clearly a strong point for Excelsior, as evidenced by their margin of 97 to 92.5 in the complicated scoring system for the scenario in which Belmont gets a racino. Under the Aqueduct-only scenario, the score was closer at 94.6 to Empire's 93.

But in either scenario, NYRA was far behind, registering a 76.5 in each; though the score came despite attracting no votes for first or second place under the categories of "integrity" and "details of the proposals." Whatsmore, NYRA had no guaranteed payments in its package, instead proposing $101 million if certain conditions were met first.

And while Charles Hayward kept up the good fight, telling the Times: "“When all the facts are evaluated, we are confident NYRA will be the obvious choice," it's becoming clear that the writing is on the wall for the association, which has conducted racing in the state since 1955. Having said that, despite being in the unenviable position of being a bankrupt lame duck with not a single political ally, NYRA will still present a hurdle with its land ownership claim that could tie the process up in court.

Empire, as could be expected given the belligerent tack they've taken throughout the process, went immediately to the attack, releasing, through their PR agency, a statement attributed to Marylou Whitney:
“While I respect the people on the ad-hoc committee, they placed our horses and industry second to inexperienced operators whose real interests lie in developing casinos. As difficult as it is to say, I would prefer the New York Racing Association over the one suggested today.

“Placing our jewel in inexperienced hands would be a mistake that could kill our Saratoga racecourse. If this suggestion is adopted, I believe Saratoga and the New York horse industry will suffer. I know many will choose to race elsewhere....myself included. I have faith that the decision makers will eventually make the right decision that will put our horses first.”
Using obvious symbolism in Ms. Whitney, who has long been a highly visible part of the social scene during the Saratoga meetings, Empire, right off the bat, shows that it will try to raise fears of an unfamiliar entity tampering with the storied racetrack.

In addition, Robert Bellafiore, an Empire spokesperson, derisively referred to Excelsior as a "dog track operator" based on the bulk of its experience which is in harness racing and greyhound racing. [AP]

I'm not familiar with the group being involved with harness or dog tracks. But then again, not all that much is known about them; they don't appear to even have a website. Egads! [EDIT: WRONG - Here it is...though it hasn't been updated in some time as of this edit.] They've remained low key, especially in comparison with Empire. The key figures in the group are as follows:
[Yankees partner and Steinbrenner son-in-law Steve] Swindal; Richard Fields, whose company developed Seminole Hard Rock Casino and Hotel in Florida; Jerry Bilinski, former chairman of the New York State Racing and Wagering Board and an equine veterinarian; New York trainer Gary Contessa; retired Hall of Fame jockey Jerry Bailey; the Tishman Speyer real estate development company involved in the Yankee Stadium project; and the Rev. Dr. Floyd Flake, a former United States representative and senior pastor at a New York church involved with urban development and community outreach programs. [Bloodhorse]
Fields is an associate of the Governor-elect. Some rides that Spitzer took on Fields' private plane was an issue in the election for about 20 minutes. Bilinski is said by Tom Precious in Bloodhorse to be a close ally of Senate Majority Leader Joseph Bruno. So, like Empire, Excelsior has some friends in high places, as well as, according to Bennett Liebman of the Racing and Wagering Law Program at Albany Law School (and the proprietor of the Racing and Gaming Today site), the most significant support from the legislative members of the committee. The two may be "neck and neck" as Empire CEO Jeff Perlee said, but Excelsior would seem, at this early stage, to have the shortest route home.


Green Mtn Punter said...

Surprise, surprise! I was but I guess I shouldn't have been. Excelsior meets my key test of being a non-profit on the racing side, so that is a good start. They can solve their lack of race track experience by bringing key NYRA people on board. I agree with Alan, it is very difficult to envision any scenario in which NYRA could prevail at this point. But Empire will not go away without a duel to the death battle in the back rooms of Albany- Marylou, God bless her, has already indicated as much in Empire's first press release following yesterday's AHC meeting. And what is to prevent any or all of the 3 bidders from "improving" their bids now that the cards are on the table? There is still a long way to go in this race and I have a feeling that there are more surprises ahead, so stay tuned. Next thing you know Empire will sign up the Sheikh of Dubai and the bidding war will be underway. Stranger things have happened.

Anonymous said...

i wish thay would get on whith it already as my dad would say its time to s**t or get off the pot