George Steinbrenner III, a major breeder/owner and principal owner of the New York Yankees, died the morning of July 13 in Tampa of a heart attack. He had turned 80 July 4.

Steinbrenner owned Kinsman Stud Farm near Ocala, Fla., and raced in the name Kinsman Stable. He raced numerous major winners and started several horses in the Kentucky Derby (gr. I).

His first Derby starter, Steve’s Friend, also was his initial major winner. Steve’s Friend prepped for the 1977 Run for the Roses with a triumph in the Hollywood Derby (gr. I) but proved no match in the Churchill classic against Seattle Slew, the eventual Triple Crown winner.

Steinbrenner owned Florida Downs, which later became Tampa Bay Downs, and as well as an interest in Balmoral near Chicago. He played a large role in the Florida breeding and racing industry. He served as president of the Florida Thoroughbred Breeders’ Association and was a member of the board of directors of the Florida Thoroughbred Breeders’ and Owners’ Association.

Steinbrenner, who was nicknamed “The Boss” because of his dominating manner during his time with the Yankees, oversaw the team win 11 American League championships and seven World Series titles.

Steinbrenner’s survivors include his wife, Joan; sons Harold and Hank; and daughters Jennifer and Jessica. Hank Steinbrenner helped manage the Kinsman operation the last several years.

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State Comptroller Thomas DiNapoli said that the New York Racing Association would be insolvent in 2011 if the state fails to name an operator for video lottery terminals at Aqueduct.

He also questioned the state’s selection process, because only one bidder remains out of six firms that originally expressed interest in the project.

“New York has got to get it right this time,” he said. “Too much is at stake.”

The New York Division of Lottery recently disqualified two bids for the license to operate the VLTs, meaning only one bid remains from an initial interest list of six entities.

Aqueduct Entertainment Group has filed suit in state Supreme Court, Schenectady County, against the Lottery, Gov. David Paterson, Assembly Speaker Sheldon Silver (D-Manhattan) and Senate Conference Leader John Sampson (D-Brooklyn).

“It looks like the selection of a VLT operator for Aqueduct is still an open question,” DiNapoli said. “When you start with six potential bidders and end up with only one, it begs the question of how the process was handled and whether the state can actually close the deal. The fact is, NYRA can’t make it long without significant restructuring and revenue from VLTs.”

NYRA lost $9-million in 2009 and faces a $19-million shortfall this year. DiNapoli said that his office would put on-site auditors at the New York Racing Association to monitor the association’s cash flow, fiscal condition, and willingness to follow recommendations from an audit his office conducted.

DiNapoli ordered the audit several months ago when NYRA asked the state for additional operating funds but refused to open its books. NYRA later complied with DiNapoli’s subpoena and received a $25-million state loan to keep racing through this year.

However, the combination of declining handle, no Aqueduct gaming, and money owed NYRA by New York City Off Track Betting Corp. is quickly eating up the loan. NYRA President Charles Hayward says $20-million of the loan will be gone by January 1 if New York City OTB does not begin making payments. OTB is shortchanging NYRA nearly $2-million per month and owes the racetrack operator more than $20-million.

But DiNapoli laid some of the blame for NYRA’s fiscal woes at its own doorstep. He said NYRA should have restructured and cut costs more aggressively after emerging from bankruptcy. Overall payroll has gone up $1.9-million since bankruptcy ended, and more than $6-million was spent on personal and miscellaneous services that NYRA failed to justify the need or price for, the audit says.

The audit recommended specific steps such as analyzing current staffing needs and services such as the $900,000 NYRA pays to shuttle horses between racetracks at no cost to owners and trainers.

“NYRA should evaluate whether, and to what extent, the practice of transporting horses between tracks at no cost is necessary to remain competitive and … consider either charging a fee for the service or discontinuing it,” the audit says.

However, prominent trainer and New York Thoroughbred Horsemen’s Association president Rick Violette blasted the suggestion.

“Charging state employees to use elevators at the state capitol instead of stairs makes more sense than charging owners and trainers for shuttle service between racetracks,” he said. “If they want to add to the list of reasons people don’t bring their horses to New York to race, this is a good one.”

Auditors will be in place when the Saratoga Race Course season opens July 23 and stay at NYRA for an indefinite period of time.