Pimlico owner says slot machines would speed improvements

Magna Corp. had pledged to restore racetrack with or without gambling law

October 09, 2003|By Ed Waldman and Greg Garland | Ed Waldman and Greg Garland,SUN STAFF

When Magna Entertainment Corp. purchased Pimlico Race Course last year, it promised to renovate the aging facility with or without the legalization of slot machines.

The company says it is standing by that pledge. But, facing the growing prospect of casinos and other competitors in the state, Magna is stressing its need for slots to swiftly restore Pimlico to its past grandeur.

"If we get slot machines we'll get a much quicker build of the facilities at both Pimlico and Laurel," Sue Floyd, a spokeswoman for Magna said yesterday. "If we don't get slot machines, it's still a longer term process. But MEC is still committed to the new facilities."

During a presentation of Magna's plans to the House Ways and Means Committee on Tuesday, company President Jim McAlpine said the Maryland racetracks face intense, competitive pressures from Delaware and West Virginia, which allow slots at their tracks, and said the situation will grow more critical if Pennsylvania approves slots at tracks this year, as expected.

In an interview after his remarks, McAlpine said that the future of the Preakness at Pimlico depends upon "the economic viability of horse racing in Maryland." But when asked directly if he was saying that the Preakness will leave Pimlico if lawmakers don't approve slots, he said that wasn't the case.

"We don't intend on moving it," McAlpine said. "Our goal is to make it here."

Magna, which is based in Canada, bought a majority stake in the Maryland Jockey Club, owner of the tracks, for $117.5 million in a deal that was completed in November. Magna, the largest owner of racetracks in North America, vowed to revitalize Maryland racing by transforming Pimlico and Laurel into entertainment centers, upgrading stable areas and providing friendly service.

Maryland Jockey Club President Joseph A. De Francis said yesterday that keeping the Preakness, the second leg of horse racing's Triple Crown, at a "viable and successful" Pimlico was one of Magna's "top corporate priorities."

"From a personal perspective, as I've said many times, the very last thing that I would ever want to see happen would be to see the demise of the only rightful home for the Preakness, which is Pimlico," he added.

"And I want to make it very clear, that is as strong and unequivocal a statement as can possibly be made without any qualifiers or caveats or weasel wording.

"Having said that, the ability to achieve that objective, to achieve that goal, to achieve that priority, is not something that is within my unilateral control or the unilateral control of the company. It is going to be dependent upon a very large number of complex economic conditions."

Thomas F. McDonough, chairman of the Maryland Racing Commission, said that he didn't regard McAlpine's comments to the House Ways and Means Committee as representing a change in its position on redeveloping Pimlico and preserving the Preakness.

"He said that slots will affect the pace of redevelopment at Laurel and Pimlico -- not the fact of the redevelopment," McDonough said. "I don't think the Preakness is in jeopardy. I'm not concerned with losing the Preakness."

Aside from tradition, the Preakness is tightly bound to Maryland by a 1985 law that cut the state's taxes on horse racing. If the owner of Pimlico were to sell the rights to the Preakness to an out-of-state track, its taxes would revert to pre-1985 levels. The law gives Maryland the right of first refusal to purchase the rights to the Preakness and would allow the Maryland Racing Commission to revoke all of Pimlico's racing days if the Preakness were moved.

Racing commission member John B. Franzone, who is often critical of the Maryland Jockey Club, said he is not surprised that the issue of the viability of the Preakness has been brought into the slots debate.

The Maryland racing industry has been lobbying for years to have slots approved for racetracks. A bill, backed by Gov. Robert L. Ehrlich Jr. that would have awarded them to Magna and the state's other racetrack owners, was killed in the legislature last spring. But since then, legislators have been studying alternatives such as state-owned slots facilities, as well as hearing from lobbyists who want full-scale "destination" casinos.

"It's very clear that [Maryland Jockey Club officials] are reading the tea leaves and they know that they are in desperate trouble with this slot bonanza that they are looking for," Franzone said.

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