Threatening financial clouds will not wash out Rosecroft's season opener

January 10, 1991|By Ross Peddicord | Ross Peddicord,Evening Sun Staff

The Rosecroft Raceway will open its 1991 season tomorrow night the identical way it closed out 1990.

The same dark cloud of an imminent bankruptcy, a possible foreclosure, a cocaine scandal, bad debts and industry infighting still hangs over the state's deeply troubled harness industry.

But, Rosecroft will open, even if track owner Mark Vogel has to file for bankruptcy protection.

Paul Mark Sandler, one of Vogel's attorneys, said late last night that Vogel's negotiations with the First National Bank of Maryland should be resolved today "in a good way."

Sandler said he wouldn't rule out Vogel filing for bankruptcy, but when asked if the agreement meant Vogel could be named debtor-in-possession, which would give him control over the track, Sandler said "Yes, something like that."

Despite these problems, there is some optimism for Rosecroft's future, according to members of the Maryland Racing Commission, which are regulating the tracks' continued operation.

Jack Mosner, a banker who sits on the board, said the currently indebted facility and its companion track, Delmarva Downs, should be current in paying their past due bills by March 1, even though other industry sources say it could take much longer.

At a racing commission meeting at Timonium yesterday, Mosner and other commissioners said their only priority right now is to ensure that Rosecroft opens on schedule and remains a healthy, viable enterprise.

The commission did not directly address:

* Vogel's well-publicized financial problems -- "That's between Vogel and the bank," chairman Ernest Colvin said. "Rosecroft will open under the same operating agreement the commission had with Vogel last fall -- we control the money."

* Vogel's admitted cocaine abuse, which some commissioners have said should be reason to deny him a license -- "We're only interested right now in continuing the operation of the tracks," Mosner said.

* Infighting among two factions of harness horsemen. The commission advised them to work out their differences quietly, among themselves. "Timing is important, and yours is the worst," Mosner said to members of the Maryland Standardbred Horsemen's Association, which wants to replace Cloverleaf as the harness horsemen's official organization.

Despite Vogel's financial difficulties, "We are talking about a track with a very healthy cash flow," Mosner said of Rosecroft. The track is scheduled to operate 218 nights this year.

The commission assumed financial control of the tracks last fall after Vogel siphoned off about $3 million in racetrack funds to help bail out other struggling businesses. The commission appointed James Murphy, Rosecroft's general manager, as trustee and proceeded to revamp a business plan for the track to ensure Vogel could not withdraw any further funds and all past due accounts would eventually be paid.

One big glitch occurred last week when the tracks' mortgage lender, the First National Bank of Maryland, froze track operating accounts after Vogel defaulted on two loan payments.

"But the bank showed an expression of good will by keeping the horsemen's accounts open, which they could have also seized," Murphy said. "They emptied the operating account, which consisted of about $100,000, but we still have the bankroll to open up. We just have to set up the mechanism to open up other accounts, which is now being negotiated with First National."

Thomas Russow, president of Local 27 of the United Food and Commercial Workers' Union, which represents about 200 track workers in mutuels, admissions, parking lot and security departments, said he was concerned because the checks of some employees had bounced last week after First National froze the operating accounts. He also said that the bill for employees' health insurance benefits paid by the track was two months' past due and that the track had no money to pay a $278,000 bill to the workers' pension fund, due in two weeks.

Murphy said Rosecroft will re-issue checks to any employees whose previous check bounced, will pay the health insurance this weekend and would have the pension fund bill paid by March 1.

Russow said union officials will be at the track tomorrow night to monitor the situation. "We have got to ensure our people that they are going to be paid."

Meanwhile, Murphy said Vogel's problems with First National will not interfere with operation of the tracks.

"What it boils down to is that Mark wants to own and sell the tracks on his own time frame, and the bank wants things done sooner," Murphy said. "They want their money [about $10 million] and to expedite a sale."

Meanwhile, it is to everyone's benefit to continue racing at Rosecroft. The tracks are certainly more of a salable commodity to the bank if they are operating; they are apparently Vogel's one business venture that generates income; and the commission certainly wants to ensure that hundreds, even thousands of jobs are available for track workers and horsemen.

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