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N.Y. Commission Approves Certificate Of Incorporation of New Association I Incorporators May Proceed Now to Purchase Stock of Four Existing Race Tracks By BOB HORWOOD Staff Correspondent NEW YORK, N. Y., June 21 Following a one-hour public hearing at its offices at 745 Fifth Avenue, the New York State Racing Commission today approved the certificate of incorporation of the Greater New York Association Inc., formed by a group of members of the Jockey Club, which seeks to acquire control of the four existing New York racing associations with the purpose of constructing a new "Super" Track, rebuilding Saratoga and Eliminating Jamaica. The statement issued by commission chairman Ashley T. Cole follows: "The commission has approved the certificate of incorporation of the Greater New York Association, Inc., in order that there may be an instrumentality through which the incorporators may proceed to the purchase of stocks, contracts to rebuild and other relevant matters. This approval i by the commission of this certificate is simply an approval of the form of the corporate structure of the association. Prices of stock of Aqueduct, Belmont, Jamaica and Saratoga, costs of construction and re- Continued on Page Seire.t ; . N. Y. Solons Okay Certificate Of Incorporation of New Assn. Incorporators May Proceed Now to Purchase Stock of Four Existing Race Tracks t Continued from Page One building and location thereof and other relevant matters are not yet available to the commission. All these matters this commission by law must pass upon and they cannot be presented to the commission for approval until such time as prices of stocks, location of track to be built or rebuilt, track improvements and financing plans are known and presented to the commission for consideration." The next step toward the rehabilitation of New York racing and the eventual construction of a super track at Belmont Park or Aqueduct, will be the submission of options on the property in the four associations to the state racing commission, which will hold another public hearing before approving, or rejecting this purchase. Recently, John W. Hanes, chairman of the board of the Greater New York Association, said that this matter could be disposed of within 24 hours, once the corporation with power to make the offers was approved. However, before the options can be obtained, meetings of the stockholders of the four associations will have to be held, which could be a matter of hours, days, weeks, months or years. The reason-, able assumption is that it will be a matter of days, though Mr. Cole, questioned on this point, said; "I had thought when the law was passed at Albany in April that things would move rapidly, but here it is past the middle of June and we are still taking step one." This mornings hearing got under way at 10:10 a. m. before a small attendance of some 30 persons. The full commission, chairman Cole, commissioners William C. Langley and Leon A. Swirbul, attorney John P. Powers, secretary Harry Millar and state steward Francis P. Dunne, heard j arguments against the proposed corpora- tion presented by Cyrus P. Jullien, president of the Queens County Jockey Club, operators of Aqueduct, and Isidore Bieber, , owner and breeder of thoroughbred horses; i while William W. Dulles, of the law firm of Cahill, Gordon, Reindel and Ohl, and Christopher T. Chenery, a director of the proposed corporation, spoke for the Greater New York Association. Jullierr Clarifies Stand Mr. Jullien declared that he was not opposing the formation of the new association, but merely wished approval of the , certificate of incorporation deffered until such time as the stockholders of the Queens County Jockey Club and Jamaica and Saratoga had been made a "firm offer" for their stock. He declared that the sponsors of the new association had put the "cart before the horse" in asking for approval of the incorporation before any offer for the purchase of stock had been made to any of the existing New York associations except Belmont Park. "The problem which confronts our association is this," Mr. Jullien said. "I have no knowledge of the wishes of the stockholders of the Queens County Jockey Club or the Brooklyn Jockey Club and I dont know if they will favor an offer to purchase I their stock, or not. A meeting will have to be held to determine this if and when a firm offer is made for our stock. If the j stockholders decide to accept, that is well j and good. But if they do not decide to accept, the stockholders are placed in an i. . : extremely awkward position by the commission approval of the new organization, as I can only assume that that will also mean approval of the franchise. "The franchise," Jullien continued, "is very important. It is for 25 years and is irrevocable. The number of racing days in the franchise is also irrevocable. The effect would be to place the Queens County Jockey Club, if it wished to continue to operate as a private enterprise, in a very bad position as we could not get more dates if our track is improved. If we do improve our track, added dates are essential. "This means that the commissions approval of. this certificate of incorporation will have the effect of coercing the Queens County Jockey Club stockholders into accepting terms offered by the new group. We cannot operate in a free atmosphere when we are facing commission approval of a franchise with fixed dates. Two-Thirds of Stockholders Must Approve "The commission," Mr. Jullien declared, "should have assurance that two-thirds of the stockholders in the four existing associations are willing to sell before granting approval of the incorporation. I dont ask that this approval be denied, merely that it be deferred until a firm and definite offer has been made and the equivalent of options have been obtained." Mr. Jullien went on to say that the plan for the Greater New York Association originated with The Jockey Club, which put it through the state legislature and said that he believed that the same group could make a firm offer for the stock in the existing associations. He also said that he felt that the conditions best for commission approval of the new corporation would be one in which financing, options on existing tracks, and a definite plan for improvements, not merely architects plans, but a concrete plan for overallimprovements had been completed. Mr. Jullien referred to a lack of unanimity among Jockey Club members concerning what should be done, then touched on the question of personnel, stating that there were many men who had served many years in the existing associations in key positions and who had done a good job, who were now filled with uneasiness concerning what was going to happen to them. Commissioner Langley then asked Mr. Jullien if he believed that Aqueduct would be precluded from asking for additional dates if the Greater New York Association plan was approved. Mr. Jullien said: "No, but we would be frozen into our present dates and thus forced to sell to protect our investment." Chairman Cole than asked if it was not true that Mr. Jullien had already stated that Aqueduct would be unable to make any substantial improvements without an increase in the share of pari-mutuel revenue allowed by the state. Mr. Jullien agreed, but said that what he asked for Aqueduct was the same perfer-ential treatment given the harness tracks. Continued on Page Forty-Five N.Y. Commission Approves Certificate Of Incorporation of New Association Incorporators May Proceed Nov to Purchase Stock of Four Existing Race Tracks Continued from Page Seren "There is no question," he said, "that we cant rebuild on 4 per cent. But if we were given the same consideration that the trotting people get, we could make substantial improvements." Chairman Cole then called on attorney Dulles to reply to Mr. Julliens remarks, and the lawyer said: "We have to launch -the ship sometime and we need an organization capable of making a firm offer for the stock in the existing associations. All other plans, including these offers, will eventually have to come before the commission for approval in any case. Chairman Cole then asked Mr. Dulles if The Jockey Club was in a position to make the firm offer for stock which Mr. Jullien asked, and the reply was negative. This point came up later in the hearing when Mr. Jullien returned to the attack, stating: "If you approve this corporation, you are approving a free-wheeling organization with no substance and in no position to do anything but makeoffers. Ordinarily, a corporation is v assumed to have an effective organization. Cole Cites Law "Let us assume that the certificate of incorporation becomes a legal entity, authorizing the association to conduct racing, but they havent anything at all. What happens to the other associations if they wont go in?" "They will continue to operate," Mr. Cole said. "No one can stop them." "And what happens to the new association?" Mr. Jullien demanded. Mr. Cole then cited the law recently passed at Albanyr which calls for three initial steps, the formation of a corporation, the acquisition of stock and the approval of plans for improvement and rebuilding. He pointed out that the law does not give approval to conduct racing until the other points have, been approved by the commission. "But that next step gives them the right to ask the commission for an irrevocable franchise," Mr. Jullien insisted. Mr. Cole then declared that Mr. Jullien was objecting to the formation of a legal entity that would be in a position to make an offer, while pointing out that The Jockey Club, as a membership group, could not make any offer. Commissioner Langley then said that he was sympathetic to Mr. Julliens point of view, but added that the Greater New York Association was not a private organization and had nothing tangible except debt. An i organization, he said, was essential if the group was to borrow money. "The Jockey Club," he added, "would be committed to the extent of 33 million dol- I lars and most of the members, unfortunately, are good for it. i Mr. Chenery, who is director, of the new association in charge of financing, then I I interjected rather heatedly: "There is not a chance of The Jockey , Club making an offer for the stock in the existing associations and everyone knows that. The only ones who can make an offer are those, who are going to own the stock.. This is an obvious move by Mr. Jullien to stall this plan, and it is rather naive.", Isidore Bieber, well-known owner and breeder, was heard at some length in op i I position to. the new association. Bieber said: "I am against this plan as a friend of racing and as a horseman. I cm against all mergers of race tracks. California and Michigan have passed laws against racing mergers."" Mr. Bieber then proceeded to read from notes which he said warned of the "dangers and pitfalls" of the plan for the amalgamation of the four associations and creation of a super track. His first objection was on behalf of the residents of Elmont, where Belmont Park is situated, but David Lee, representing the civic council of that community, later said that he Avas sure that any differences between the association and the community could be amicably ironed out over the conference table. Bieber then declared that it was too cold to race at Belmont Park in the soring or fall, but conceded that this might be overcome by heating. Warming to" his subject, he declared that too much racing at any one track wears out the racing strip, the horses and the people, and would drive patrons to New Jersey. . He then spoke eloquently on behalf of Jamaica, declaring that there would be justification for subsidizing that track if necessary to insure its continuance. This, he said, was no time to cut down on the number of race tracks, when it is "raining: horses." He added that "dangerous elements," who, he said, all his listeners could identify, might obtain that property if it were to be sold by the new association. After declaring that he felt that Aqueduct was a better site for a new track than Belmont Park, which he said is already the best race track in the Americas, he added that Walter Donovan, general manager of Garden State Park, had told him that the. Metropolitan Jockey Club course had fully as great a potential as the successful New Jersey track. The racing commission, Mr-. Bieber said, had the power to compel the Jamaica management to make the needed improvements and said that Max Hirsch president of the American Trainers Association, had a plan which would make it an ideal track, while Jules Schwartz, whose Lincoln Maintenance Co., cleans the New York and New Jersey race tracks, had told mm that 20,000 seats could be added to Jamaica at comparatively little expense. In stressing the need for at least three race tracks in Long Island, Mr. Bieber said that Chicago, with a smaller population has four courses, Baltimore has three, plus four half milers. Turning to the theme of taxation, Mr Bieber said that he felt that the great danger in the formation of a non-profit association in New York was that it would spread to other states, with the result that the federal government, losing millions in taxes, would impose a five per cent tax on pan-mutuel revenue. In conclusion, Mr. Bieber said that he Las against improving race tracks, though he believed it to be unnecessary at Belmont Pak, but felt that it should be done at Aqueduct, which next year will be on the subway, and at Jamaica. Returning to the fray after Mr. Jullien I had been heard a second time, Mr. Bieber brought the hearing to a close by asking: I "Suppose Jamaica receives an ultimatum "to sell or else?" "What do you mean by else, " Mr. Cole asked, v "Sell or lose their license." "That is nonsense," Mr. Cole said. "You have been around too long to believe anything like that."
