The Gold Cup races are said to be the embodiment of Virginia gentility, but lately the two organizations that produce the twice-yearly entertainments held in northern Fauquier County have, ahem, fallen a bit short of that mark.

The Virginia Gold Cup Association, which provides the organization for the steeplechase races, is having difficulty securing a lease renewal with its cousin the Meadow Outdoors Foundation, the group responsible for the upkeep of the Great Meadows racecourse where the events are held.

It would be easy to confuse the two tax-exempt groups as one in the same, since they share money, board members, wealthy pedigrees and a love for the pomp and pageant of steeplechasing. But the recent dispute over each group's commitment to the other is threatening to rattle their symbiosis.

At the core of the disagreement, those involved in the negotiations say, is how much money the Gold Cup should contribute to the upkeep of Great Meadows instead of to other charitable recipients. Thrown into the mix are the egos of the people behind the races.

The Meadow Outdoors Foundation has said it will terminate its lease with the Gold Cup for the use of the track. That lease will expire at the end of this year. Talks over a new lease stalled after the Meadow Outdoors Foundation declined in recent months to sign a version approved by the Gold Cup board in April.

That creates the possibility, however remote, that the races could be leaving their longtime home.

"There is a possibility the Gold Cup could move, but that is a possibility too horrible to contemplate," said George Strawbridge Jr., president of the National Steeplechase Association. The association is the governing body for the Virginia Gold Cup, run in May, and the International Gold Cup, run in October.

It is unimaginable because the relationship has been a profitable one. The Virginia Gold Cup has been run in some form since 1922 and moved from the Broadview course outside Warrenton in 1985. The International Gold Cup moved from Tennessee in 1984. On their side of the bargain, both races have a lavish venue and enhanced promotion.

And because of these races, the Meadow Outdoors Foundation has received millions for its self-perpetuation.

"It's the golden goose," Strawbridge said of the races. "And both sides have the best intentions."

That is the official version, at least, even while partisans from both sides try to disparage each other anonymously. The personality conflicts aside, as with most disputes, this one boils down to money, say those involved in the negotiations.

"One organization is the landlord, and the other is the tenant. That means business rules apply," said one Gold Cup board member.

A key figure in the unfolding drama is Arthur W. "Nick" Arundel, the multimillionaire who donated the land for the course, is chairman of the spring Gold Cup race, serves on the boards of both the Gold Cup and the Meadow Outdoors Foundation and owns part of the land that is used for the running of the spring and fall steeplechase races. Those events draw thousands of tailgaters and a coterie of the region's elite.

Because Arundel serves on both boards and owns part of the racetrack land, he holds great sway over the direction of the Gold Cup, to the dismay of some board members from both groups who said they would like more autonomy.

Arundel, a local newspaper publisher and an heir to a Pepsi-Cola Bottling Co. fortune, bought the land used for the Gold Cup, off Route 17, in 1981 for $2 million. He donated a significant portion to the Meadow Outdoors Foundation in 1983, land records show. He is president of that foundation.

Last year, the Meadow Outdoors Foundation board sent a letter to the Gold Cup announcing that the lease would be terminated. David Snyder, a Warrenton physician and chairman of the Meadow Outdoors Foundation, signed the letter on behalf of the board.

Although some Gold Cup board members said the termination was a surprise, others said it was a normal business practice, since the lease could not have been renegotiated otherwise.

"It's just like any other business arrangement. You have adjustments over the years," said Ernest M. Oare, member of the Virginia Racing Commission and the Gold Cup board.

Other individuals familiar with the negotiations said the termination was the work of Arundel, who is said to be unhappy with Gold Cup's decision to give a grant to another charity instead of devoting all of its spare money to the Meadow Outdoors Foundation.

Arundel said his personal views had little to do with the contract holdup. He confirmed his displeasure with some of Gold Cup's actions, however, including giving a five-year, $100,000 grant to a local free clinic for the indigent.

"I think I abstained from the vote. I was concerned that Great Meadows needed funds for repair and improvements," he said.

Melville "Chucky" Church III, president of the Gold Cup Association, said that the missions of the Gold Cup and the Meadow Outdoors Foundation, although similar, are not identical.

"We have stated many times that Great Meadows is our charity of choice, but so little money has made it to charity that the Gold Cup board made a long-term commitment to one of the most needy and well-deserved charities in Fauquier County," he said.

Whatever the case, running the Gold Cup and the Great Meadows doesn't come cheap.

According to the latest tax records available, from 1998, the Gold Cup Association had revenue of just more than $1 million, with expenses of $994,137. During that same period, the Meadow Outdoors Foundation had revenue of $762,239, with expenses of $757,856.

In 1998, the Gold Cup Association made $20,785 in charitable contributions. During the same period, the Meadow Outdoors Foundation made $485 in cash contributions to outside groups.

Arundel is quick to point out that Great Meadows, set in the midst of Fauquier County's rolling hills and with the backdrop of Pignut Mountain, is an "active charity," since, in addition to the races, it has played host to several other community activities. Those included private and public school youth soccer, wine festivals, horse shows, rodeos and cross-country meets. In the tax records, the foundation estimated that by providing its grounds for these outside groups, it provided $288,192 worth of program services.

In addition, the Gold Cup races contract with local charities to perform such services as parking.

In any case, the two organizations involved in the races are not the traditional philanthropies associated with tax-exempt status.

For instance, the promotional material for the 1999 Virginia Gold Cup boasted that the event "is one of America's leading upscale business marketing events." The literature also noted that "over 36 percent of Virginia Gold Cup spectators earn more than $100,000 annually."

In Great Meadows promotional material, Arundel says, "Something will have gone out of us as a people if in our times we let this remaining open countryside near our Nation's Capital be destroyed. . . . For this countryside is a means of opening our minds and reassuring ourselves of our dignity as a people."

If more money is not committed to Great Meadows, Arundel said, that mission could be hindered.

Thus, he said, the current dispute involves "the question of rent and the commitment of the Gold Cup Association to support Great Meadows. In the last two years, it's begun to go in other directions."

Church said the Gold Cup Association's attorney has found significant conflicts of interest in Arundel's dealings with the Gold Cup and the Meadow Outdoors Foundation, although he would not give specifics. The Gold Cup board will meet this week to discuss the lease situation.

Although he conceded some difficulties, Church predicted an eventual resolution. "If we don't get together, it's the biggest, stupidest thing that has happened in Fauquier County," he said.

CAPTION: The Virginia Gold Cup race has been run at the Great Meadows racecourse since 1985.