N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 216: Disposition of racing facilities or certain assets

§ 216. Disposition of racing facilities or certain assets. 1. Any

franchised corporation desiring to grant, give, devise, or sell any

assets including tangible and intangible assets, racing facilities and

real estate shall apply to the commission and to the franchise oversight

board for approval of such disposition, provided, however, that the

approval of such commission and such board shall not be necessary for

the sale of property, other than real property, that is appropriately,

customarily and usually sold by the association in the normal course of

its business. If in the judgment of the commission and the franchise

oversight board, acting individually, the public interest, convenience

or necessity and the best interest of racing will be served thereby, the

commission and franchise oversight board shall each enter an order

granting approval of such disposition and of the terms thereof.

2. Such franchised corporation during the term of such a franchise

shall not pledge, mortgage or otherwise encumber any of the racetrack

facilities or properties acquired after the effective date of this

subdivision without the prior written approval of the franchise

oversight board.

The franchised corporation may incur indebtedness, including without

limitation, the issuance of non-convertible debt securities in

connection therewith, and grant liens on and security interests in

assets and interests, including without limitation, the revenue streams

referred to herein, except that any debt incurred or funds raised shall

be used to promote racing at the franchise racetracks. The franchised

corporation shall not create any lien or security interest in any asset

that runs with the franchise, such as the simulcasting contract, the

repayment of which would extend beyond the term of the franchise. All

incurrence of debt or grant of liens or security interests other than

those arising within the ordinary course of business such as

materialmen's and mechanics' liens first require the approval of the

franchise oversight board.

3. The state through the urban development corporation may borrow to

fund racetrack capital improvements at Aqueduct racetrack, Belmont Park

racetrack and Saratoga race course and borrow on behalf of the

franchised corporation pursuant to franchise oversight board approval

secured against the franchised corporation's right to receive payments

for racetrack capital improvements pursuant to subdivision f of section

sixteen hundred twelve of the tax law, provided, however, the indenture

shall restrict the use of net proceeds to capital expenditures at the

racetrack and provided further that any such borrowing shall be secured

only by such future stream of racetrack capital improvement payments

payable to the franchised corporation. The urban development corporation

shall initially borrow funds necessary for approved capital expenditures

in years one through five and then at appropriate times as determined by

the franchise oversight board for years six through ten, years eleven

through fifteen, years sixteen through twenty and years twenty-one

through twenty-five. The amount of borrowing for approved capital

expenditures shall not exceed the amount that would have been paid out

for facility improvements in the event the full payment pursuant to

subdivision f of section sixteen hundred twelve of the tax law for that

purpose was made.