Investors may join De Francis

December 12, 1993|By Ross Peddicord | Ross Peddicord,Staff Writer

Two groups have confirmed that they have talked with Laurel/Pimlico operator Joe De Francis about becoming investors to help him buy out minority partners Tom and Bob Manfuso.

One is a group of local horsemen headed by Arnold Heft, part owner of USAir Arena in Landover. The other is led by Arnold Stansley, owner of Toledo (Ohio) Raceway.

"We are interested and we have been in touch with Joe," said Heft, who owns a large stable of thoroughbreds. "Other than that, I have no comment."

Stansley said yesterday that De Francis told him two groups are seriously vying with Stansley to purchase the Manfusos' shares in the tracks. The third group reportedly is GTECH Corp., the Rhode Island-based company that owns AmTote International, suppliers of the tracks' pari-mutuel equipment as well as suppliers of Maryland's lottery system.

Guy Snowden, chairman of the board and chief operating officer of GTECH, is in London and was not available for comment. "He couldn't say anything anyway since GTECH is a publicly owned corporation," said company spokesman Bob Rendine.

Two other possible investors -- Crown Central Petroleum chairman Henry Rosenberg and H & S Bakery owner John Paterakis -- did not return phone calls.

Heft is a director of the Maryland Thoroughbred Horsemen's Association and has been instrumental in negotiating with De Francis on a number of issues, including the compromise last year to keep one side of the Pimlico Race Course barn area open for winter training.

A source said the Heft group has been negotiating with De Francis for the past two months and is scheduled to meet with him Wednesday.

De Francis, who attended a Washington Redskins game at RFK Stadium yesterday with team owner Jack Kent Cooke, declined to comment.

Stansley and his partner, Jim Ledbetter, own Toledo Raceway and one-third of Trinity Meadows racetrack in Fort Worth, Texas. They had expressed interest in purchasing Rosecroft and Delmarva raceways, Maryland's two harness tracks, earlier this fall.

"But buying into Laurel and Pimlico is now on the front burner," Stansley said. "We've got some partners in other investments and we're in the process of gathering the money. We're sold on the idea."

De Francis' efforts to attract potential investors to buy the Manfusos' shares has been seen as a problem for two main reasons.

According to unaudited reports, the two tracks have lost about $4.1 million during the first nine months of this year. In addition, any new partner apparently would have limited, and not controlling, status.

Although Hollywood Park is expected to become a partner with De Francis in the Maryland Jockey Club's bid to build a track in Virginia, Hollywood Park's executive committee did not want to buy the Manfusos' shares in the Laurel/Pimlico enterprise unless it could have control of the tracks.

However, Stansley said he did not regard these problems as major obstacles.

"I think Joe is a great businessman," Stansley said. "And he works hard. I was in a meeting with him two weeks ago. He had the flu, but he sat there and crunched numbers with me for seven hours.

"And I also think the numbers are great. They do a great job on the revenue side at these tracks. It's the overhead expenses that are so high. The fact that they can keep three backstretches open all year around amazes me and shows me how strong [financially] these tracks really are. I know. I'm in the racing business and I know how much it costs to keep one backstretch open.

"I also think there's a tremendous future in Maryland. It's my understanding that within 30 months, there could be 18 off-track betting parlors open and if Virginia comes into play and the Maryland Jockey Club is successful there, then there are additional opportunities as well as the possibility of the [Redskins] stadium being built."

De Francis has been negotiating with Redskins owner Cooke, who says he wants to build a stadium in Laurel. Cooke wants to buy 55 acres of land and put up a 78,600-seat stadium that he envisions as part of a complex to include the track and an arena for hockey and basketball.

De Francis is the majority stockholder in Laurel Race Track, and the Manfusos are minority partners. The two sides have been struggling for control of Laurel and Pimlico since Frank De Francis, Joe's father, died in August 1989.

In October of that year, they signed a stockholders agreement that included a Russian roulette provision allowing one side to buy out the other. The Manfusos have offered to sell De Francis their shares for $8.2 million.

De Francis has until Jan. 12 to buy out the Manfusos or sell his shares to them for the same price.

Attorneys for De Francis and the Manfusos are scheduled to meet tomorrow to continue negotiations on a settlement that would pave the way for resolution of the buyout.

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