New York real estate developer Jeffrey Gural will pay at least $500,000 annually to operate the Meadowlands Racetrack starting in five years, and build a new grandstand and up to four new off-track wagering facilities, under a contract approved Friday by the board of the New Jersey Sports & Exposition Authority.
The 31-year lease with Gural's entity, New Meadowlands Racetrack LLC, was ratified Friday as the board formally named Wayne Hasenbalg as the agency's new president and CEO. Hasenbalg, Gov. Chris Christie's deputy chief of staff for policy and planning, will succeed Dennis Robinson, who is stepping down to become chief operations officer of Grand Prix of America and bring Formula One racing to West New York and Weehawkin in 2013.
The announcement of Hasenbalg's appointment was made Thursday as part of a significant shakeup of Christie's administration.
According to a summary of the lease contract, Gural will pay $1 in rent for the first five years, then the greater of $500,000 or 10 percent of the company's net operating profits. New Meadowlands Racetrack, in the meantime, will build a roughly $70 million grandstand by late 2016, and add about 1,500 new parking spaces by 2014. The lease becomes effective on the closing date, set for Dec. 24.
The contract also requires Gural's firm to complete a new off-track wagering facility in Bayonne, which is expected to cost about $16 million and be completed by September 2012, according to the sports authority. The proposed 25,000-square-foot project is under way, and has gained preliminary approvals from Bayonne and the New Jersey Racing Commission.
Gural's group also has the right to build and operate three other off-track betting sites. The company will pay the sports authority 10 percent of its net-operating profits beginning in fiscal 2013.
Robinson, whose resignation is effective Jan. 2, said he was gratified to end his tenure with the completed deal, after a year of uncertainty for the employees of the struggling racetrack.
"I was happy to get it done because we worked so hard on it, but at least our employees at the Meadowlands and Monmouth (racetracks) can enjoy Christmas knowing that they have a job," he said.
Robinson said the rent over the first five years was a "recognition of the absorption of operating losses" and the investment being made by New Meadowlands Racetrack during the early stages of the lease.
The lease also notes that Gural's company has the right to conduct gaming at the track if state law changes to allow it, according to the summary. If that happens, and Gural does not exercise the gaming rights, the sports authority will increase the ground rent to compensate for the projected loss of revenue.