Plans called for razing and rebuilding the track's grandstand and clubhouse and installing 1,200 slot machines, plus development of adjacent retail space and condominiums.
`Misguided ideas'
As was often the case with major proposals, Stronach pushed through the plans with little analysis or discussion, according to Roncelli, the former director.
"I think Gulfstream was already being torn down before the board said, `Let's do it,' believe it or not," Roncelli recalled. "What are you going to do at that point? There's a wrecking ball tearing the building down. Are you going to say no at that point? There wasn't much discussion on that issue. I had plenty of conversations about what I thought about it."
Roncelli still laments the product, which opened in January 2006 with a grandstand that had just 900 seats, compared with 14,500 previously. "The new Gulfstream is a monument to misguided ideas about what a racetrack should be," wrote Andrew Beyer, longtime racing columnist for the Washington Post.
Magna financed the redevelopment with more than $160 million in loans from its parent, MI Developments - one of several moves that sparked a lawsuit from one of MID's largest shareholders, Greenlight Capital Inc. The New York investment firm alleged in court papers that MID was acting as Magna Entertainment's "banker of last resort" because the racing company was so mismanaged it couldn't borrow money elsewhere.
Ontario's Superior Court of Justice rejected the case in 2006; Greenlight is appealing.
Gulfstream has kept losing money since the renovation, largely because it has taken in by far the least slots revenue among the three South Florida facilities allowed to operate the gambling machines. In the three months that ended in September, the Hallandale Beach track generated $74 per machine a day, while Mardi Gras Racetrack & Gaming Center and Isle Casino & Racing took in $167 and $214, respectively.
Company officials have conceded that Magna failed to mount a major marketing campaign until at least six months after the casino opened. Nearby construction of retail shops blocked part of Gulfstream's parking lot and led some people to think the facility was closed, said David Roberts, director of Florida's Division of Pari-Mutuel Wagering.
Also, according to documents filed with the division, the slots operation gave away $1.3 million in revenue during the three months that ended in September in the form of "promotional credits" distributed to gamblers. That amount far exceeded the credits given out by Gulfstream's two nearby slots competitors.
