Saturday, December 12, 2009
The Bids are in for Maryland Tracks
Yesterday was the final date for interested parties to submit bids for the Maryland Jockey Club piece of Frank Stronach's bankrupt Magna Entertainment empire, comprising Pimlico and Laurel race tracks, the Bowie training center and an OTB. According to the Baltimore Post, one of the bidders is none other than the same DeFrancis family that owned the tracks prior to their sale to Stronach in 2002 and that, to be kind, is viewed with less than total love and affection by most in the Maryland racing community.
The names of all the bidders will be forwarded to Maryland state officials on Monday, but we already know that there's a competing bid from real estate developer Carl Verstandig, in partnership with an unnamed California gaming entity. Among other possible bidders are the family of Peter Angelos, the owner of the Baltimore Orioles, and a group headed by a well-known racing industry figure from Pennsylvania. And there's always the specter of Frank Stronach himself cobbling together some kind of bid, using either his own personal money -- which he may have more of now that General Motors has cancelled his deal to buy Opel -- or once again using his various controlled corporations to pony up the needed cash, at the expense of minority shareholders.
Other potential bidders have been mentioned from time to time, but as of now there's no definite information that any of them submitted bids by Friday's deadline. The actual bankruptcy court auction is scheduled for Friday, January 8th, which will give Maryland a bit of time to exercise its right to match the winning bid. Not that I could imagine any state government paying to buy racetracks in the current economic squeeze. But the state's primary concern is keeping the Preakness in Maryland, and that should be reasonably secure with any bidder -- except, of course, Stronach himself, who, to borrow a term from cycling, is "beyond category" when it comes to unpredictability.
I've raced horses at Laurel and Pimlico, and I've been to the Preakness a few times. For those who don't know the tracks, Laurel is a workmanlike, perfectly satisfactory second-tier race track on the Baltimore-Washington corridor, near enough people to make a go of it with fewer racing days, better promotion and, of course, a share in the slot-machine revenue that will start flowing relatively soon.
Of course, Stronach managed to screw up the slots deal too, by deciding that he didn't have to comply with the rules saying his slot application for Laurel should be accompanied by a check for the deposit. You know, like putting some money down when you buy a house or a car. Oops, sorry, I guess people don't do that much anymore, but you get the idea. As a result, the license for nearly 5,000 slot machines went instead to the Arundel Mills shopping center, just up the road from Laurel, although that deal is currently mired in zoning conflicts. Shopping center tycoon David Cordish, who heads the group that's tentatively been awarded the slots license, was also rumored to be among the potential bidders for the Maryland Jockey Club assets in the bankruptcy court auction.
But let's assume -- which I know may be unreasonable in Maryland politics -- that a deal can be worked out whereby some of the slots revenue goes to support Maryland racing, which is on life support and which might well die without some sort of cash infusion. Lots of Maryland horse farms have already been sold or converted to other crops, and stallions have been leaving the state for the greener pastures of Pennsylvania, and along with those farms and stallions go the jobs of the people who take care of the horses and the traditions of Maryland racing that go back at least to the 18th century. Shame on both Stronach and Joe DeFrancis for letting things reach this point.
Pimlico is, to put it kindly, a bigger challenge than Laurel. The track is located in an African-American neighborhood northwest of downtown Baltimore, and affluent white would-be racegoers use the location as an excuse not to go, just as whites in Miami stopped going to Hialeah once the neighborhood around that track became predominantly Hispanic. And the track itself needs a total makeover; the barns and backstretch are run down, and the grandstand makes Aqueduct look like a luxury resort.
But with a bit of vision, a little of the slots money, and a reduced racing calendar, Pimlico might well be brought back to something approaching its glory days. There's decent public transportation, a glorious history, and a neighborhood where jobs aren't all that easy to come by. A smart track operator would make Pimlico more a part of its community, engaging the people who liove near the track as both employees and racegoers, and making going to the races once again the thing to do for Baltimoreans. That probably means running only on Friday nights and weekends, but that's a whole lot better than closing the place down.
Presumably we'll see in the next few days what the various bidders are offering, and how the legal issues surrounding the slot-machine revenue will play out; DeFrancis managed to get Stronach to give him a share of future slots money, when Stronach bought the Maryland tracks in 2002. That deal, if it's not undone by the bankruptcy court, would severely hamper any new owner's attempts to rebuild racing in Maryland. Let's hope the court does the right thing and cancels the contract. If it does, then a new operator -- i.e., someone other than the discredited DeFrancis and Stronach -- might have a chance to make Maryland racing respectable again.