It seems relations between the state of New Jersey and a well-known real estate investor have soured, putting a deal to lease Monmouth Park race track in jeopardy. The investor is now claiming the state has changed the terms of the parties’ pre-lease memorandum of agreement and has threatened to pull out of the deal. This is a good example of a how a real estate dispute can threaten what would otherwise be a mutually profitable deal.
The investor claims the state is unexpectedly trying to stick him with operational overruns for the race track. For its part, the government representatives are claiming the threat is nothing more than a negotiating tactic and that the lease will be consummated according to the terms to which the parties originally agreed.
The investor had agreed in principle to a speculative five-year lease of the racetrack. He now claims the actual lease prepared by the New Jersey Sports and Exposition Authority (NJSEA) will make the track’s cost for the season his sole responsibility, which was not a term that had previously been agreed upon. Monmouth Park has been losing about $5 million per year under state management.
New Jersey Gov. Chris Christie has made overhauling the state’s gaming industry a top priority and getting Monmouth Park under private management has been one of his key goals. He said he is not worried about the deal eventually closing, but the chairman of the New Jersey Thoroughbred Association said he is concerned that negotiations have taken a turn for the worse and that this may negatively impact the track and the rest of the races that have been scheduled for the season, which ends Nov. 6.
Source: The Asbury Park Press, “Racetrack lease in dispute,” Bob Jordan and Larry Higgs, Sept. 7, 2011