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Friday, January 09, 2009

Dems Take Charge

- New Senate Majority Leader Malcolm Smith, the first Democrat to hold the position in 43 years, choked up a bit during his acceptance speech on Wednesday. Maybe it was because his party will now have to take sole ownership of the drastic spending cuts necessary to close the estimated $15 billion budget deficit. The noisy protests by union members opposed to the cuts were only the start of the flak the party will receive.

Nothing substantive really happened in the capital on Wednesday in Albany, for a change. Senator Smith's toned down deal with the three dissident senators which was completed the evening before merely and finally affirmed the majority that the Democrats won electorally in November. And Governor Paterson had little new to say in his memorized State of the State, having presented his budget last month.

No mention of Belmont slots nor, of course, the theoretical racino at the Big A. Here's an anonymous commenter who claims that sources tell him or her that Delaware North is holding out for either an agreement regarding Belmont which would raise their percentage split at the Big A, or for separate relief from the terms which they already agreed to. I wouldn't normally mention hearsay such as that from an Anonymous, but I think that's something that we all already suspect.

Elizabeth Benjamin reported in her Daily Politics blog that the Senate's Racing, Gaming, and Wagering Committee is one of two panels still without an announced chairperson; and that Senator Smith is perhaps reserving it for a Republican as a show of bipartisanship. I'm not sure what that means with respect to how high a priority the matter is to him. But, as a reader pointed out the other day, he seems to be on board with slots at Belmont in any event.

- Matt Hegarty had the story in the Form the other day about NYC OTB's cries of poverty with respect to the court ruling requiring them to pay disputed monies, determined to be in the amount of $15 million, to two harness tracks. OTB says they would have to go to the legislature to seek relief.

"We will be unable to operate effectively unless and until the legislature makes an adjustment to the statute, until we are not required to pay out more than is available from our operating funds," [General Counsel Ira] Block said.
As usual, Joe Faraldo, the hard-driving president of the Standardbred Owners Association of New York, refused to back down one bit.
"They have an obligation under the law to make those payments," Faraldo said. "Nothing can remove those obligations. Frankly, it's quite sad to me to see a state agency say, 'We're not going to pay you.' What, exactly, do we have statutes for?"

If the board does not issue an enforcement order, Faraldo said the horsemen are prepared to go to court to seek a declaratory judgment that would force New York City OTB into bankruptcy if it continues to contend that it cannot make the payments. [DRF]
- And finally, a lot of buzz this week about the chances of Rep. Kirsten Gillibrand to be appointed by Governor Paterson to replace Hillary Clinton in the Senate. She was my pick early on, so I just thought I'd point that out. Ms. Gillibrand is amongst six people known to have completed a detailed questionnaire for the governor (not known if Andrew Cuomo has done so.....I still think he's not interested, despite his dancing around the question).
The form, which was due Thursday, also went to [you know who] Kennedy, [Rep. Steve] Israel and [Rep. Carolyn] Maloney, as well as U.S. Rep. Jerrold Nadler and Nassau County Executive Tom Suozzi. [Times Union]
There was a story earlier in the week that Ms. Gillibrand doesn't get along with House Speaker Nancy Pelosi; I don't really see what that has to do with the matter at hand. With Ms. Clinton scheduled to begin her confirmation hearings next week, it won't be long before we find out who the governor picks. More exciting than the winter stakes at the Big A these days to be sure!


Anonymous said...

It is sad that NYC OTB, now owned by NY State is crying poverty. NYRA's takeout was recently raised by 1% to help out the OTB's. I guess it was not enough.

Faraldo is spitting into the wind on this one. Good luck going up against NY State to get your money.

I read where the porno industry applied for TARP funds so maybe Faraldo should do the same.

Anonymous said...

Speaking of the alleged Aqueduct VLT hall, how did the presentation by DelNorth go last night at the Queens Community Board 10 monthly meeting? Not a mention in the press.

Brett said...

1.2 millions free dollars in the Santa Anita P6 pool tomorrow at SA. I am looking $3 million especially being a Saturday. Trevor and Laffitt were very happy.

Anonymous said...

I was thinking about the anon poster's comment that contemplated the Delaware North upfront payment of $370 million being "adjusted" by the state. It made me think about a comment I read from Donahue Peebles after Delaware North was named the winner, suggesting that the Aqueduct development team figured on a 10 year payback based on VLT revenues on the $370 million license fee. This was before talk of the increased fee to the Aqueduct operator if Belmont came on line. So with what the bidders had to go on early last year, what would have ever prompted Delaware North to bid so much of a cash outlay upfront before any VLT results were known and realized? Almost seems like they might have intentionally bid to high in order to win the contest, then hold the state hostage later to get a better deal, while at the same time, eliminating the other bidders. Why any company would be satisfied with a 10 year payback on such a risky enterprise is beyond me?

Anonymous said...

NYRA's should raise takeout to 30%.

Anonymous said...


Last week, Delaware North's financier, Bank of America (BAC.N), aggressively stepped up it's company asset selling, with it's hard earned major assets worldwide, on the block, to raise cash to weather a dismal market at home.
For example; it's hard fought entry into China, CCB - selling initially a $2.83 billion chunk of its holding in China Construction Bank (0939.HK) on Wednesday, at a 12% discount to previous closing price, dragging the Chinese bank's stock 6 percent lower. analysts have stated, more BOA selling will certainly be required.

No way was BOA going to agree to finance DelNorth anywhere near their publicized amount, at the time of winning the bid, within the state's conditions independent body, must delve deeper & get another bidder, ASAP....

Anonymous said...

It's way too quiet in Albany these days concerning this Aqueduct project. What happened to the press conference's showing Bissett from DelNorth, Hayward & Duncker from NYRA and the Governor with those big smiles after the award was announced? Was this just the biggest "fake out' in NY procurement history or what? Please Governor Paterson tell all the horse industry particpants something encouraging, even if it is a "do-over."

Anonymous said...

Unfortunately the losing bidders are unlikely to get financing either, meaning the whole deal may be up in smoke.

Should that be the case, where would that leave the NYRA Franchise deal.?

Anonymous said...

There is money in the market for solid deals and companies with strong balance sheets. My guess is $370 million was just the wrong number and it doesn't compute well in a financing model.

Good question about how a failed Aqueduct deal might effect the racing franchise award. The deeds to the racetracks have been transfered to the state, the creditors have been paid with the money the NYRA got from the state in bankruptcy, the pension accounts are current, oustanding debts to the state have been waived, and the extra $30 million that the NYRA bargained for from the state has either been spent, or is on account with the NYRA. Per the franchise agreement, the state must begin picking up pension payments April 1st, and the state may even have to fund operating budget and capital needs until VLT revenue comes in, unless the NYRA has been negligent. Hard to believe all of the above could be unraveled if a VLT deal isn't completed at Aqueduct, but this has been an unusual process.