Legal fight puts future of Va. track in danger

January 19, 1995|By Ross Peddicord | Ross Peddicord,Sun Staff Writer

RICHMOND, Va. -- The chairman of the Virginia Racing Commission expressed concern yesterday that legal challenges might prevent the building of a racetrack scheduled to open in 1996 near Richmond and operate in conjunction with Laurel and Pimlico racecourses.

In addition, the development of a series of off-track betting parlors that were anticipated to open before the track is finished is being put on hold while the state's Attorney General's office determines if the parlors can be installed while the track's future is in question.

Shenefield, the board's chairman, said Arnold Stansley, the operator of Colonial Downs, the state's first proposed pari-mutuel racecourse, "has got to have valid expectations if he'll ever build the track."

The legal challenges are being brought by losing applicant Jim Wilson against the commission for its decision to award the license to Stansley. Wilson was one of five applicants that applied for the franchise.

A Richmond circuit court judge is expected to hear arguments tomorrow in a motion filed by the commission to dismiss Wilson's suit.

Shenefield said Wilson's action could impede the construction of the track "by a minimum of a year and under a nightmare scenario as long as two years" if a series of appeals and regulatory response are followed through by either party.

"He [Wilson] is slowly bleeding the whole process," Shenefield said, adding that Stansley "has got to be skeptical of the whole thing and worrying whether he can keep his financing package together."

Stansley testified before the commission at its regular monthly meeting yesterday that by April he and his partner, Jim Leadbetter, will have spent nearly $5 million in start-up costs at Colonial Downs, but after that construction will start to slow down unless further financing is obtained.

Authorities of New Kent County, site of the track, and Stansley's other financial consultants told the commissioners at their December 1994 meeting that the sale of bonds to finance the bulk of the track's construction will be delayed until the Wilson litigation is concluded.

Shenefield, in his seventh year as chairman, said he is so personally frustrated by the developments "that if a track is not built by the time my term expires in 1999, then I'll be looking to do something else. It seems we spend all of our time specializing in legal proceedings."

Neither Wilson nor his attorney, Lawrence Framme III, attended yesterday's meeting in which Shenefield made his comments, but Framme has said that Wilson, by filing his appeal, is responding to numerous complaints from Northern Virginia and Maryland horsemen, who do not support the Richmond track.

Stansley said he has selected sites for initial OTB parlors and is ready to submit a licensing application to the commission for the first outlet. A track operator is allowed to maintain up to six OTB facilities, but there is some question whether they can be functioning before the track is open. Wilson's suit has further complicated that issue, too, Shenefield said.

"Suppose we give Stansley an OTB outlet in 1995, and then he pulls the plug on the track in 1996. What happens then?" he asked. "These are the issues that the AG's office has to be decide."

Commissioner Ernie Oare also decried the Wilson suit, saying that "while we're messing around in the appeals process, riverboats could come in first before the racetrack. The matter of timing is crucial. They [casinos] could slam the door on 35 years of work to bring pari-mutuel racing to Virginia."

Bill Thomas, a lobbyist representing Colonial Downs and the Maryland Jockey Club in the Virginia General Assembly, said a bill permitting riverboat casinos is expected to be introduced in the legislature in the next couple of days.

A similar bill was rejected last year and Thomas believes there is "a reasonable prospect" that it will be defeated again. "But never in my experience have I seen so many resources applied to a single issue," he said. "Because of that, you don't know for sure what can happen."

Virginia division of the Horsemen's Benevolent and Protective Association and the Virginia Harness Horse Association asked the commission to formally recognize them as official representatives for the state's thoroughbred and harness horsemen, respectively, at Colonial Downs.

But Stansley told the board that he wanted to negotiate with a variety of horsemen's groups before he would pick what organizations he would work with at his track.

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