Suitor wants to raze Pimlico

Verstandig says he would build shopping center

Sun Exclusive

April 03, 2009|By Hanah Cho | Hanah Cho,hanah.cho@baltsun.com

Interest in Maryland's thoroughbred tracks put up for auction by their bankrupt owner is growing with the emergence of another potential buyer, who envisions razing historic Pimlico Race Course and building a shopping center in its place.

Pikesville developer Carl Verstandig, whose America's Realty LLC often invests in distressed urban retail projects, said Thursday that he will not bid on the Preakness Stakes, the storied racing event held at Pimlico and the second leg of the Triple Crown. He instead wants to buy Pimlico and Laurel Park in hopes of redeveloping there with new shopping centers. Verstandig said he can pay for the properties with cash.

So far, Verstandig is the only potential bidder for the Maryland tracks with no interest in buying the Preakness, whose fate has been the source of anxiety among state lawmakers and the racing industry. And his suggestion of razing Pimlico worried those in horse racing, given the track's long tenure in playing host to the Preakness, which is set for its 134th running next month.

Verstandig said he sees value in turning Pimlico's racetrack into a neighborhood shopping destination. But Verstandig said he is open to building around the Baltimore racetrack if, for instance, preserving the Preakness there is a legal requirement.

He would not detail how much he plans to bid for the properties; the Pimlico site has 116 acres, and Laurel encompasses 236 acres.

Meanwhile, Verstandig's proposal for Laurel Park calls for developing a regional center anchored by retail shops, restaurants and possibly a racetrack. Racing could continue there if it can operate profitably, Verstandig said in an interview.

"We think as far as land value, they're both extraordinary locations in terms of accessibility, population and the right components for development," said Verstandig, president and chief executive officer of America's Realty.

"What makes us unique is that we don't have any interest at all in the Preakness as part of the acquisition," he said. "That's what distinguishes us from the other parties, which could work in our favor or not work in our favor."

Verstandig is the latest buyer to express interest in acquiring the state's thoroughbred tracks since last month's Chapter 11 bankruptcy filing by Canada's Magna Entertainment Corp., which owns Pimlico Race Course, Laurel Park and the rights to the Preakness Stakes.

Under bankruptcy protection, for which it filed March 5, Magna wants to auction Laurel, Pimlico and other tracks, including Santa Anita Park in Southern California. Magna does not specifically mention its intention to sell the rights to the Preakness.

A federal bankruptcy judge is reviewing the request, with some creditors and other parties objecting to the auction process. Magna has asked the court to delay discussions on its auction request scheduled for Friday in Wilmington, Del.

Baltimore developer David S. Cordish also revealed this week that his company will bid on Laurel Park, Pimlico and the Preakness.

Unnamed principals

Cordish, whose Cordish Cos. bid against Magna for Anne Arundel County's sole license to operate slot machines, said his proposed casino at Arundel Mills mall would help support the state's beleaguered racing industry and the two tracks. Laurel Park's bid for slots was disqualified after Magna failed to pay the mandatory application fee, and Pimlico is not designated as a slots location under state law.

Meanwhile, Heritage Racing LLC, whose principals are unidentified, was created last month with the sole purpose of preserving the Preakness at Pimlico. And Baltimore Orioles owner Peter G. Angelos has said that he and his family want to help Maryland keep the Preakness, the state's single largest sporting event.

May 16 race

Maryland officials are working to keep the Preakness, with attorneys asking the bankruptcy court to affirm the state's claim to the event, which is scheduled for May 16. Maryland law gives the state the right to match any accepted bid to buy the racing event, but bankruptcy courts can disregard state laws if they feel the laws are not in creditors' interests.

"One of the problems you have here in bankruptcy is that you have two parcels of land that are potentially very valuable for real estate purposes," said Alan Foreman, attorney for the Maryland Thoroughbred Horsemen's Association. "I think you'll get a huge outcry if Pimlico gets bulldozed and gets developed as a shopping center or otherwise."

Even if Maryland secures the Preakness, the greater concern is that "you could have a situation where Laurel gets developed for commercial real estate purposes and all you're left with is Pimlico," Foreman said.

"What do you do with that facility? It's not capable of year-round racing."

Senate President Thomas V. Mike Miller acknowledged the interest in the two tracks, but noted that the value of the properties has declined because of the recession.

Magna paid $117 million for the two tracks and a training center in Bowie.

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