Excelsior beats out top companies

Nov 28, 2006 4:33 AM

Republican Gov. George Pataki of New York appointed a study committee to evaluate the bids made for the opportunity to operate the state’s three biggest horse tracks when the franchise held by the New York Racing Association (NYRA) expires in Dec. 2007.

Last week, the committee announced its findings: Excelsior Racing Associates (led by George Steinbrenner’s son-in-law) first; the partnership involving Churchill Downs Inc. (CHDN) and Magna Entertainment Corp. (MECA), the largest operators of racetracks in North America, second, and the much-maligned NYRA, last.

Whoever is granted the franchise will have the opportunity to operate Belmont Park, home to the Belmont Stakes, the anchor to the Triple Crown; Saratoga and Aqueduct. But, the biggest prize will be the chance to set up a slots operation at Aqueduct.

Although NYRA has a contract with MGM MIRAGE Inc. (MGM) to build the 4,000 video slot machine facility, the new franchise holder will probably choose the slots facility developer.

Observers note that it is unlikely that Pataki will be involved in awarding the franchise since his term of office ends in a few weeks. He will be succeeded in January by Atty. Gen. Elliott Spitzer, a Democrat.

Spitzer can follow the non-binding decision of the Ad Hoc Committee on the Future of Racing or decide that the review process be re-started. But, it also has been noted that Spitzer has close political ties to Excelsior partner Richard Fields. Other members of the group, in addition to Steinbrenner’s son-in-law Steve Swindal, are Tishman Speyer Properties, a leading real estate developer in New York City; Jerry Bilinski, a former state racing commission chairman and close ally to Senate Majority leader Joseph Bruno, and Hall of Fame Jockey Jerry Bailey.

Under a complex scoring system, Excelsior scored 94.6 in areas that included integrity and responsibility, financial viability and details that included plans for renovations of tracks and how to improve racing while attracting more bettors to the tracks; Empire scored 93 and NYRA scored 76.5 points.

Both Excelsior and Empire Racing proposed $100 million in up front payments to the state with additional monies to be paid over a 20-year period.

Steinbrenner, not included in the Excelsior filing, has considerable influence as the owner of the New York Yankees. He also is a well-known owner and breeder of thoroughbred horses, maintain a horse farm in Florida.