State officials are close to finishing a deal to lease Monmouth Park to the New Jersey Thoroughbred Horsemen’s Association, which would take over operations at the racetrack on May 1, the New Jersey Sports and Exposition Authority said Monday.
The agency’s board of commissioners today authorized President and CEO Wayne Hasenbalg to complete the lease agreement. Under the deal, the sports authority would lease the Oceanport venue for five years, followed by three 10-year renewal options for the horsemen that would require rent payments starting at $250,000.
The deal, which Hasenbalg said he hoped to complete this week, also calls for the state to turn over control of its off-track wagering facility, in Woodbridge, and the rights to develop additional off-track wagering sites.
A deal to lease the track to Morris Bailey, co-owner of Resorts Atlantic City casino, collapsed in December amid disputes between the Christie administration and the New Jersey Thoroughbred Horsemen’s Association, which represents horsemen at Monmouth Park. At issue were state purse subsidies and a separate racing permit for the Meadowlands Racetrack, which would have allowed the thoroughbred horsemen to also hold racing dates at the North Jersey site.
The sports authority in December ratified a 31-year lease with New York real estate executive Jeffrey Gural. The deal calls for Gural to build a new $70 million grandstand at the 35-year-old track and complete a new off-track wagering facility in Bayonne.
Gov. Chris Christie had been pushing to have both tracks privatized by the end of last year as part of a plan to get the state out of the horseracing industry. The NJSEA has said that from 2008 to 2010, the state suffered combined losses of between $15 million and $20 million each year for the operation of the two racing venues.
“We continued the process that had already begun and merely provided some deadlines, which were hard ones,” Hasenbalg said Monday of the timing of the negotiations. “I think all of the parties realized that it was now or never.”
Similar to the lease with Gural, the horsemen group will pay $1 in annual rent for the first five years, said Ralph J. Marra Jr., NJSEA’s senior vice president for legal and governmental affairs. The structure is designed to help the operators absorb losses during the initial period of the lease, before annual rent increases to $250,000 and then $500,000.
“The idea is that hopefully once they get the (off-track wagering facilities) built out, hopefully they’re going to get into the black and then we get some real rent,” Marra said.
The completed deal for Monmouth Park would be subject to approval by Christie and the New Jersey Racing Commission. Marra said the official closing is expected to be May 1.