By T. D. Thornton
The New York Racing Association (NYRA) and the state of New York asked the Supreme Court of New York Aug. 18 to dismiss a lawsuit filed by two residents that is attempting to block the $455 million state loan to NYRA that will renovate Belmont Park.
In addition, both the state and NYRA want to quash a motion for preliminary injunction that the plaintiffs initiated back on June 22 to try to halt any state money for the project from flowing to NYRA.
The Belmont renovation was approved back in May when the final New York state budget for fiscal year 2024 included the funding.
Belmont was last significantly updated in 1968, and the current, long-planned refurbishment is being undertaken with an eye toward consolidating all of NYRA’s racing at Belmont and Saratoga Race Course, with the state-owned Aqueduct Racetrack property to eventually be sold.
“NYRA’s motion to dismiss should be granted, the Court should issue a judgment in favor of Defendants declaring that the Belmont Legislation is constitutional, and the Complaint should be dismissed in its entirety and with prejudice,” stated a memorandum of law that NYRA filed with the court Friday.
“As Plaintiffs claim fails as a matter of law and is not likely to succeed on the merits, and as the challenged appropriation to NYRA serves an important public interest and Plaintiffs cannot establish irreparable harm, or that the equities weigh in their favor, Plaintiffs’ motion for a preliminary injunction should be denied,” the NYRA filing continued.
The plaintiffs, Jannette Patterson and John Di Leonardo, each identified themselves in the initial complaint as a “citizen taxpayer of the State of New York who has paid, and is paying, New York State income and sales taxes.” They have asked for a judgment declaring that the state’s loan to NYRA “would be an illegal and unconstitutional expenditure, misappropriation, misapplication, or disbursement of State funds.”
The defendants are the State of New York, the New York State Assembly, the New York State Senate, Governor Kathy Hochul, state comptroller Thomas P. DiNapoli, and NYRA.
NYRA’s 30-page memorandum stated that the two plaintiffs “contend that the ‘plain language’ of the Gift and Loan Clause bars the State from appropriating any funds to NYRA.”
The Plaintiffs, however, are wrong “for at least two reasons,” NYRA argued.
“First, Plaintiffs’ insistence upon a strict construction of the Gift and Loan Clause betrays an untenable, ostrich-like approach to settled law. Although one would not know it from Plaintiffs’ papers, the Court of Appeals long ago ruled that the expenditure of public funds to a private entity is permissible under the Gift and Loan Clause if such expenditure serves a public purpose,” the filing continued.
“Moreover, the Court of Appeals and the Third Department have upheld financing arrangements for the construction and operation of sports venues and facilities that serve a public purpose, notwithstanding the co-existence of an incidental private benefit. Thus, the appropriation to NYRA authorized by the Belmont Legislation cannot be equated to an impermissible gift or loan under [the New York state constitution.],” the filing stated.
“Second, although at one point in their Complaint Plaintiffs correctly describe NYRA as a ‘not-for-profit corporation that has the exclusive franchise to operate’ Belmont Park, they otherwise refer to, and analyze, NYRA as though it is a run-of-the-mill ‘private corporation’ for purposes of the Gift and Loan Clause. In doing so, Plaintiffs yet again fail to reference, or even acknowledge, case law from both State and federal courts that uniformly holds that NYRA-as a State-franchisee that operates racing facilities owned by the State on public property pursuant to statute and regulation-is a ‘state actor,’” the filing continued.
“In this regard, the funds received by NYRA will be used to renovate public property and facilities owned by the State. Put simply, NYRA-as a ‘state actor’-is not the type of ‘private corporation’ that the Gift and Loan Clause was intended to cover,” the filing stated.
A separate Aug. 18 memorandum filed by the New York Attorney General’s office on behalf of the state government defendants told the court that “Plaintiffs are not entitled to a preliminary injunction because they cannot make the required showing of irreparable harm. Plaintiffs urge the Court to maintain the status quo and halt the disbursement of funds so that their constitutional argument may be heard. But Plaintiffs’ constitutional argument is meritless and there is no valid basis for the Court to preliminarily enjoin the Challenged Appropriation…”
