§ 216 — Disposition of racing facilities or certain assets

§ 216. Disposition of racing facilities or certain assets. 1. Any\nfranchised corporation desiring to grant, give, devise, or sell any\nassets including tangible and intangible assets, racing facilities and\nreal estate shall apply to the commission and to the franchise oversight\nboard for approval of such disposition, provided, however, that the\napproval of such commission and such board shall not be necessary for\nthe sale of property, other than real property, that is appropriately,\ncustomarily and usually sold by the association in the normal course of\nits business. If in the judgment of the commission and the franchise\noversight board, acting individually, the public interest, convenience\nor necessity and the best interest of racing will be served thereby, the\ncommission and franchise oversight board shall each enter an order\ngranting approval of such disposition and of the terms thereof.\n 2. Such franchised corporation during the term of such a franchise\nshall not pledge, mortgage or otherwise encumber any of the racetrack\nfacilities or properties acquired after the effective date of this\nsubdivision without the prior written approval of the franchise\noversight board.\n The franchised corporation may incur indebtedness, including without\nlimitation, the issuance of non-convertible debt securities in\nconnection therewith, and grant liens on and security interests in\nassets and interests, including without limitation, the revenue streams\nreferred to herein, except that any debt incurred or funds raised shall\nbe used to promote racing at the franchise racetracks. The franchised\ncorporation shall not create any lien or security interest in any asset\nthat runs with the franchise, such as the simulcasting contract, the\nrepayment of which would extend beyond the term of the franchise. All\nincurrence of debt or grant of liens or security interests other than\nthose arising within the ordinary course of business such as\nmaterialmen's and mechanics' liens first require the approval of the\nfranchise oversight board.\n 3. The state through the urban development corporation may borrow to\nfund racetrack capital improvements at Aqueduct racetrack, Belmont Park\nracetrack and Saratoga race course and borrow on behalf of the\nfranchised corporation pursuant to franchise oversight board approval\nsecured against the franchised corporation's right to receive payments\nfor racetrack capital improvements pursuant to subdivision f of section\nsixteen hundred twelve of the tax law, provided, however, the indenture\nshall restrict the use of net proceeds to capital expenditures at the\nracetrack and provided further that any such borrowing shall be secured\nonly by such future stream of racetrack capital improvement payments\npayable to the franchised corporation. The urban development corporation\nshall initially borrow funds necessary for approved capital expenditures\nin years one through five and then at appropriate times as determined by\nthe franchise oversight board for years six through ten, years eleven\nthrough fifteen, years sixteen through twenty and years twenty-one\nthrough twenty-five. The amount of borrowing for approved capital\nexpenditures shall not exceed the amount that would have been paid out\nfor facility improvements in the event the full payment pursuant to\nsubdivision f of section sixteen hundred twelve of the tax law for that\npurpose was made.\n