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Gural gives specifics about the Meadowlands deal

December 17, 2010

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Standardbred breeder, owner and racetrack operator Jeff Gural took his hefty resume of New York City real estate expertise and horse racing smarts to Trenton, NJ, early Friday morning and convinced the administration of Gov. Chris Christie that he could put together a group to lease the Meadowlands Racetrack and take the operation off the state's hands.
"We have reached an agreement that gives us exclusive rights to negotiate a lease to operate the Meadowlands," said Gural. "The winter meet will open Jan. 7 and run through March 31. That's a done deal. But if we don't have a lease deal done by March 31, the state will shut the place down. The governor was clear on that.
"I'm optimistic that everyone will rally around this project," added Gural. "At least the governor has given us a second chance."
Gural says he believes it will take $40-$50 million to build a new grandstand/clubhouse facility--on the track's present backstretch--and launch the new business, which he envisions with a winter meet and a summer Championship Meet. A new business group would own the facility but lease the property presently operated by the state-owned New Jersey Sports and Exposition Authority (NJSEA). The NJSEA leases the property the New Meadowlands Stadium sits on to the New York Giants and New York Jets, which jointly own the stadium. The new harness business group would also get the right to open four off-track betting outlets, but would have no claim to any income generated by the present OTBs. The state had estimated that its Woodbridge OTB was worth $50 million.
The lease would be for five years at $1 a year, and would be renewable. If off-track wagering outlets are established, the NJSEA would be paid 10 percent of the net revenues. Phone betting rights were not included or ruled out in the deal.
"There is a huge amount of work to be done, and I'm hopeful we're going to find some harness people--really any people--to invest in this project," said Gural. "We also need the support of the entire industry starting now. We need the support of trainers and drivers. We need to keep the Meadowlands racing first-class, so we need everyone's help for that right now. If not, we'll lose it all."
The New Jersey legislative leaders and the Standardbred Breeders and Owners Association of New Jersey (SBOANJ) had been meeting since early August to craft solutions so harness racing could remain viable at the Meadowlands, but until Friday morning, the efforts were dismissed by Gov. Christie, who continued to maintain that racing was being subsidized and costing the state money.
Just three days ago Gural decided he wanted to help the SBOANJ negotiate, and a meeting was quickly set up for Friday morning. "I called up Wednesday to see if I could be helpful," said Gural. "At that point they basically said we had to give them a check for $8 million to cover any losses if we raced in 2011. Otherwise, we wouldn't open. That was a scary situation."
Gural and the SBOANJ officials and some SBOANJ directors, along with Republican legislators Ron Dancer and Jennifer Beck met with the governor's staff from 9 am until about 1 pm. The SBOANJ and Gural do not have to come up with any money at this time, but if a lease is not consummated by April 1, the estimated $1.2 million earned for purses from simulcasting will be forfeited to the state to cover any losses incurred from operating the Jan. 7-March 31 dates.
Gural said he has been assured by the governor's office that the NJSEA will work with him on the due diligence for a lease, including full disclosure of harness racing-related financials from business at the Meadowlands. "We will get to see all of the financials; they're cooperating on that," said Gural.
Gural said he will use his experience in building Tioga and operating both Tioga and Vernon Downs to guide him in the process. He also has extensive experience with unions through his position as chairman of Newmark Knight Frank, one of the largest independent real estate firms in the world.
"We must create a business plan where harness racing at the Meadowlands will survive without a purse subsidy," said Gural. "We tried to make the argument that we generate a lot of jobs, but it wasn't a compelling enough argument for Christie. This new business plan is really the future for all of us."
SBOANJ president Tom Luchento said, “We are thankful real estate entrepreneur and harness racing enthusiast Jeff Gural came to our aid during the final stretch of discussions with the Christie Administration.
“While the deal with the Governor to save standardbred racing at Meadowlands is not one hundred percent perfect, it will provide our industry a temporary lifeline, giving us time to implement innovative changes that will foster self-sufficiency.
"We are very grateful to Monmouth County legislators such as Senator Jennifer Beck and Assemblymembers Caroline Casagrande, Declan O’Scanon, Joseph Malone and Ronald Dancer for their commitment to the racing and breeding industry in this state,” said Luchento. “We are especially appreciative to the Democratic leadership of Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver along with Assemblymen John Burzichelli and Joseph Cryan, Senators Paul Sarlo and Ray Lesniak and Assemblymembers Connie Wagner and Ralph Caputo for making this possible,” Luchento noted.  “We need to applaud these legislators for their advocacy of our cause and for the innovative legislation they initiated which offers us a chance to market and grow racing as an entertainment and wagering option.”--By Kathy Parker
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