TRENTON — Little more than six years ago, New Jersey’s two state-owned horse-racing tracks were making money. But officials said they knew they were facing the abyss. The industry — in which New Jersey was once a leader — was about to collapse because of dwindling purses and declining audience. And with it would go the finances of the...
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The industry — in which New Jersey was once a leader — was about to collapse because of dwindling purses and declining audience. And with it would go the finances of the New Jersey Sports and Exposition Authority, which operates the Meadowlands Racetrack and Monmouth Park.
So the authority sought bids from private track operators who might be interested in buying or leasing the Big M and its historic sister facility in Oceanport. An investment bank was hired to advise the state agency and proposals came in, in the neighborhood of $300 million. But in the end, the state said no to the offers.
It was a colossal misstep, Gov. Chris Christie said today.
"We had an opportunity years ago to be able to sell these tracks to private business, and we squandered that opportunity," Christie said.
His comment came as he was endorsing the findings of a special commission that has proposed selling the state’s two horse tracks while taking over the casino district in Atlantic City. The governor appeared at the New Meadowlands Stadium and the Atlantic City Boardwalk to promote the commission report.
Christie did not explain his comments about the failed opportunity to sell the racetracks. But talk of a missed opportunity dredged up hard feelings today among key state officials and led a number of fingers to point at Sen. Richard Codey (D-Essex), who killed the privatization concept while he was governor for 14 months in 2004 and 2005.
George Zoffinger, who ran the sports authority at the time, said today that the decision to turn away from the offers is haunting the state now. The two tracks are among the facilities the sports authority operates.
"You didn’t have to be a rocket scientist to see there was no future in the business," Zoffinger said. "It was a declining business. It was the best time to sell it. "
And the proceeds, he stressed, "would have kept the Meadowlands in business for a long time."
On Dec. 17, 2003, the sports authority began the process of seeking privatization proposals. By the time the offers came back the following year, Codey had become governor following Jim McGreevey’s resignation. Bids came in from some of the biggest names in the racing and gambling businesses, among them Churchill Downs which owns the site of the Kentucky Derby, and Magna Entertainment, which operates the home of the Preakness Stakes.
The bids were well in excess of the $250 million estimate that the agency’s advisers said were to be expected.
But Codey killed the possible sale.
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Stable workers at Monmouth Park in Oceanport. Gov. Chris Christie announced today that Monmouth Park and other state-owned racetracks have to privatize or be shut down."I came very close to doing it (the sale)," Codey said today.
He said that the potential suitors were really only interested in the tracks if the state went ahead and approved the concept of allowing slot machines at the Meadowlands track. If that had been approved as Codey wanted, that would have raised the potential value of the deal to well over the $1 billion mark.
"I didn’t want a firesale," Codey said.
On a business trip in London, Zoffinger said Codey is "wrong." He said the bids said explicitly that possible future revenue from slots would go to the state, not the track operators. "It was very clear. We weren’t stupid. The problem with Dick Codey is he never read any of this stuff."
Zoffinger ran the talks with potential buyers.
He stressed he had gone so far as to get the horse-breeders associations to agree to the privatization concept.
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Talk of the once-upon-a-time possibility of a sale reopened the long-simmering feud between Codey and Zoffinger. The pair never liked each other and that boiled into public view when Codey inherited Zoffinger as the sports authority head. Zoffinger had been appointed by McGreevey. Few political battles in New Jersey are as heated or as public as the Codey-Zoffinger feud.
Codey remains angry at Zoffinger to this day and contends that Zoffinger was always trying "to dismantle the Meadowlands."
Zoffinger, for his part, said Codey was short-sighted at the time -- both for refusing to allow him to proceed with selling the tracks and for striking a deal with the Giants and Jets that allowed the teams to own their new stadium at the Meadowlands and cut off the key revenue source for the sports authority.
Christie said he was uninterested in reliving the past.
"It was squandered in an awfully bad way," the new governor said of the onetime possibility of a sale, without mentioning Codey. "But we can’t rewind the tape. We have to live with what we have now. The mistakes of the past are ones that we’re saddled with and we now have to try to correct."
According to a special commission created by Christie, the future of horse racing in New Jersey is in doubt. But whatever future it is, the one thing it will not include is state-operated racetracks. Christie said the state is going to stop subsidizing horse-racing purses and "the sports authority needs to get out of the business of running things."
By Ted Sherman and Josh Margolin/The Star-Ledger
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