Tracks' Potential Buyers Are Raising Their Hands

Auction Of Laurel Park, Pimlico Gets Under Way

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

The sale of Maryland's thoroughbred tracks and the storied Preakness Stakes began Monday with potential bidders submitting initial proposals for Pimlico Race Course and Laurel Park.

The names of interested purchasers are not made public during the initial bid stage. A lead, or "stalking horse," bid for the Maryland assets will be announced Nov. 9, "if we have someone worthy of it," said Brian Rosen, a New York-based attorney representing Magna Entertainment Corp., the bankrupt owner of Laurel Park and Pimlico.

The auction is scheduled for Jan. 8.

But several names have emerged since Magna filed for bankruptcy protection in March.

Pikesville shopping center developer Carl Verstandig said Monday that he has entered into an agreement with two unidentified bidders to buy the excess land surrounding Pimlico and Laurel Park for $38 million if either one emerges as the winner. Verstandig is interested in transforming the land at Pimlico into a mix of offices, retail shops and restaurants, while developing Laurel Park's land into a retail center.

Meanwhile, Joseph De Francis, a former owner of the two tracks, who objected to the speed of the auction process, said he and his partners are not submitting an initial bid. But he left open the possibility that they may do so at a later time.

A second round of bids is due Dec. 4.

"We'll be anxious to see who submits ... and will monitor the process closely," De Francis said. "At this stage in the process ... we're very interested in the process and interested in what happens to the tracks. Whether or not we will submit a bid by Dec. 4 at this point is an issue we're studying very carefully."

De Francis has a financial stake in Laurel Park under a profit-sharing agreement that would split any potential slots proceeds with Magna. Last month, Magna asked a bankruptcy judge to reject the deal reached in 2002 when De Francis and other owners sold their controlling interest in the Maryland Jockey Club, the umbrella organization for the two tracks.

Baltimore developer David Cordish said as recently as two weeks ago that he's interested in bidding on the two tracks and the Preakness, the second leg of thoroughbred racing's Triple Crown.

Cordish, whose Cordish Cos. is being considered for Anne Arundel County's sole license to operate slot machines, did not return a message Monday.

Part of the auction includes a provision that any party submitting a bid for the Preakness must agree not to move the race outside of Maryland.

The prospect of the state's single largest sporting event leaving the state had riled up the racing industry and lawmakers, prompting Magna to withdraw an earlier proposal to auction the Maryland tracks in the spring. That plan did not take into account the state's "right of first refusal" for the Preakness, which gives it 60 days to review a deal and the right to match any bid.

The state must give notice by Dec. 21 of its plan to assert its right of first refusal at the Jan. 8 auction.

To ensure that the Preakness would stay in Baltimore, Maryland lawmakers also passed a law this year granting the state the right to seize the event under eminent domain.

Verstandig said it made sense for him to partner with the two potential bidders because of the state's right to outbid the highest bidder.

"At the end of the day, if either one of the groups get the assets, I end up with what I want, and they would run the tracks," he said.

Auction timeline

Monday:: Initial bids due.

Nov. 9:: Magna will provide to the court a lead, or "stalking horse," bid for the Maryland assets.

Dec. 4:: Second round of bids due.

Dec. 7:: The state will be given names of other bidders.

Dec. 21:: Deadline for state to inform Magna that it intends to assert its right of first refusal at the auction.

Jan. 8:: Auction

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