Cash-strapped Nassau Regional Off-Track Betting Corp., facing a $3 million debt payment to a Manhattan investment bank, will sell their Farmingdale branch building to a church next door for $3.2 million, agency officials said Monday.
The 6,800-square-foot building, at 4747 Hempstead Turnpike, will be sold to Living Faith Christian Church, which plans to renovate the property and use it for administrative offices, counseling centers and ministry training.
The agency expects to close on the $3.21 million sale later this month, said OTB president Joseph Cairo. OTB owes $ 1.2 million on the building’s mortgage and would net $2 million.
“We are streamlining expenses to make OTB break even on the racing side,” said Cairo, adding that OTB has not turned a profit since 2008.
OTB will use the proceeds of the sale, along with other revenue, to settle a $3 million debt with Roosevelt & Cross, a Manhattan investment bank.
In 2014, OTB borrowed $5 million by selling revenue anticipation notes. In December 2015, it paid off $2 million and refinanced, for three months, the remaining $3 million.
The money was due in March, but OTB missed the payment as it finalized a deal transferring its authority to install 1,000 video slot machines to Aqueduct Racetrack in Queens.
Details of the VLT transfer, along with a long-term plan for OTB’s financial future, will be submitted to the State Gaming Commission for approval next week, Cairo said.
The 1.2-acre Farmingdale property has 126 parking spots that the church plans to use to expand its membership.
“OTB is the only property within walking distance on our side of Hempstead Turnpike that can provide enough parking for these things,” the church said in a newsletter.
Farmingdale, one of three branch buildings owned by the agency, has faced declining handles in recent years and is less than four miles from OTB’s Levittown location.
Some of the Farmingdale’s 17 employees could be relocated to other OTB branches. Others, Cairo said, may take a retirement incentive that OTB expects to offer in the coming months. It’s unclear, Cairo said, if layoffs will be necessary.
Nassau OTB has 201 employees — down from 300 in 2010 — and $12 million in total debt, including its operating deficit.
Genting struck a deal in March to acquire OTB’s authority to install 1,000 VLTs. OTB had planned to build a casino at Belmont Park but faced community opposition.
The deal calls for Genting to make a $5 million payment to OTB and another $4 million by year’s end. Next April, Genting would begin making monthly $750,000 payments to OTB, totaling $9 million for 2017. In April 2018 — or sooner if Genting has the VLTs in place — it would send OTB monthly payments of just over $2 million, or $25 million for the year.
Future payments would be $25 million per year, plus an amount adjusted for inflation.