"If the state were a private lender who tried to get a lien after the case were filed, that would not be permitted," Derby said.
The attempt to invoke eminent domain in the case of a beloved and endangered sports franchise is, like the Preakness, a part of Maryland history.
On March 30, 1984, in a bid to prevent the Baltimore Colts football team from skipping town, the General Assembly gave the city the authority to take sports franchises by eminent domain.
The city immediately filed a petition to condemn the Colts - but it was rejected by a federal judge because the team and its property had absconded to Indianapolis the day before.
If the federal court were to allow Maryland to assert its right of condemnation over Magna's assets, the state would have to pay fair market value for the assets, which is why O'Malley's proposed legislation also gives the Maryland Economic Development Corp. the right to issue bonds to cover acquisition costs.
In a court filing Sunday with the U.S. Bankruptcy Court in Delaware, Magna listed the net book value of Pimlico Race Course as $17.7 million: $7 million for the land and $10.7 million for the track's facility.
The net value of Laurel Park was listed at $42.4 million, according to court documents. The land was valued at $7.1 million and the track's building at $35.3 million.
The court documents do not estimate a value for the Preakness, but the annual race is a major money-maker that attracts more than 100,000 revelers and supports Maryland's faltering thoroughbred industry for the rest of the year.
John B. Franzone, chairman of the Maryland Racing Commission, welcomed O'Malley's proposed legislation.
"I think the governor is taking all the right steps to ensure that horse racing remains viable in the state of Maryland," he said. "Obviously, the problem here is that he is not in ultimate control. ... Certainly federal law seems supreme here."
Despite the limited time left in this legislative session, Senate Majority Leader Edward J. Kasemeyer said lawmakers would have time to pass a bill, though he said they would have to address potential criticism about spending state dollars for this purpose in a recession.
"It can be done," said the Democrat, who represents Baltimore and Howard counties. "Time is not the issue."
Meanwhile, the Pikesville developer who provoked the legislative activity with his plans to redevelop the track into a shopping center said Monday that he's in partnership talks with two racetrack operators interested in keeping the Preakness at Pimlico.
Carl Verstandig, president and chief executive officer of America's Realty in Pikesville, said one operator is interested in Magna's entire racetrack portfolio, while the second wants only the Maryland tracks.
Verstandig declined to reveal the operators' identities.
He said his preference would be to buy the excess land around both tracks and redevelop only those areas into retail centers.
"They want to maintain racing at both facilities, from what I'm told, and upgrade and keep the Preakness," he said. "I'm very much for keeping the Preakness."
Baltimore Sun reporters Hanah Cho and Laura Smitherman contributed to this article.
