Posted: Oct. 9, 2019
The principals in discussions that resulted in a broad agreement that would facilitate a total rebuild of Pimlico Race Course and Laurel Park and solidify Thoroughbred racing’s future on Oct. 8 discussed some details and how the projects would impact day-to-day racing in Maryland.
During a roughly two-hour meeting organized by the Maryland Thoroughbred Horsemen’s Association, the agreement and its ramifications were outlined by Alan Foreman, the MTHA’s general counsel who represented the overall horseracing industry; Alan Rifkin, counsel for the Maryland Jockey Club; and William Cole, the former Chief Executive Officer of the Baltimore Development Corp. who represented the city of Baltimore in talks that spanned about three months.
The plan, along with financial details, was first announced Oct. 5. It requires approval from the General Assembly, which will begin its 2020 session Jan. 8. In a joint statement, Senate President Thomas V. “Mike” Miller and House of Delegates Speaker Adrienne Jones voiced support for the proposal, which would keep the Preakness in Baltimore.
As with a previous proposal, a new Pimlico would have a small stabling complex for ship-ins only during the Preakness meet and any other meets held there. At Laurel, the entire stable area would be leveled and replaced with new barns and dormitories.
The redevelopment projects would cost $375.5 million ($199.5 million for Pimlico and $173.3 million for Laurel) based on available proceeds. The funding would come from the existing Racetrack Facility Renewal Account, which derives money from a 1% cut of casino video lottery terminal revenue, and bond proceeds from annual debt service.
The General Assembly would have to extend the life of RFRA for the duration of the term of initial debt issuance. The plan assumes a RFRA cash balance of $27.5 million as of March 31, 2021 and annual contributions of $8.5 million, which is the Thoroughbred industry’s 80% share of the capital improvement fund. Bond proceeds based on the RFRA contribution would total $348 million.
In addition, the city of Baltimore would contribute $3.5 million a year from its VLT share, and horsemen would contribute $5 million a year from the Purse Dedication Account, which is funded by 6% of VLT revenue.
The Maryland Stadium Authority would be the construction and funding agent for the projects, which would require a combined $150 million in demolition, infrastructure and site work, according the documents.
Foreman noted that horsemen under what is known as the “10-year agreement” have used pari-mutuel revenue to pay for additional racing dates and programs such as the Maryland Horsemen’s Health System. Because there isn’t sufficient revenue from wagering to pay $5 million a year for the redevelopment projects, the legislature will be asked to change the law to allow for the $5 million a year to come from the PDA.
“We believe we will earn that money back,” Foreman said. “This is an opportunity to lock the industry in for another 30 years. Put a price tag on that one. To us, $5 million a year from the Purse Dedication Account is a small price to pay to preserve and reset this industry. We have very much excited Baltimore city with this plan, and we have very much excited the people in this state.”
Though the timeline clearly hinges on what occurs during the 2020 General Assembly session, the principals noted the redevelopment projects—they could take up to four years—will require industry-wide cooperation.
Cole noted the Laurel project would come first, and that would mean all racing with the exception of the Maryland State Fair at Timonium meet would be held at the current Pimlico facility for at least 10-14 months. During the period in which the Laurel backstretch is being rebuilt, Timonium may be called upon to offer stabling and training, and part of the old Bowie Training Center may be used as well, he said.
“Timonium may well play into our plans,” Cole said. “We would be committed to working with Timonium on its various capital needs. There also may be a need to reactivate some stabling at Bowie but we don’t have a specific date at this time.”
Rifkin noted that when Pimlico is under construction, the Preakness will remain there and not be moved to Laurel. “There may be a year when we’ll have a Preakness with temporary facilities,” he said.
Foreman called the Laurel project “truly transformational for the industry.” Along with new barns for about 1,600 horses and a dormitory complex for 380 workers, Laurel would get a synthetic Tapeta surface that could be used for training and racing as needed. The existing tent barns would be repurposed.
“We’re going to do the best we can to get the best barn area in racing,” Foreman said. “The accommodations for workers has to be addressed first and foremost. And we are laser-focused on the safety and welfare of our horses with this plan.”
The Oct. 8 meeting at Laurel was attended by Anne Arundel County Executive Steuart Pittman. Most of the Laurel property is located in Anne Arundel County.
“I was skeptical as to where this (effort) would go, but I’m transitioning to cheerleader,” Pittman said. “Laurel is a number one priority (for the county) but I’m really glad the Preakness would stay in Baltimore. I think we can really sell what this sport does to the public at a horse-centric racetrack.
“There is going to opposition to this, I’m sure. We’re all going to have to sell it to the General Assembly.”
A key component of the plan is that the The Stronach Group, which owns the MJC facilities, would donate the land on which Pimlico sits to the city. In keeping with an earlier MSA study, the racing surfaces would be rotated 30 degrees to open up parcels of land that could be developed by the city.
A new entity would manage the property, which would have year-round uses, and lease the racing operation to the MJC. The cost of any temporary structures necessary to accommodate Preakness attendees would be picked up by TSG, not the city; Rifkin estimated the cost at $8 million to $10 million a year to “build out” Pimlico for the Preakness.
The principals noted the current Stakes Barn would be incorporated into design plans, there would be a museum on the first floor of the permanent clubhouse structure, and there would be an off-track betting area as well for year-round simulcasts.
The clubhouse and multi-purpose center at Pimlico would cost $65.1 million. The new clubhouse and paddock at Laurel has a price tag of $68.1 million.
“This is a very exciting time here in Maryland as we tackle today’s issues and plan for the future,” MTHA President Tim Keefe said. “Keeping the status quo here in racing in Maryland is not an option. This plan is not perfect but it’s as close to perfect as we can get.”
(Photo courtesy of Jim McCue)