Cordish urges state to seize tracks

Company says newly approved slots site at Arundel Mills could help tracks

November 04, 2010|By Nicole Fuller and Hanah Cho, The Baltimore Sun

Developer David Cordish called on the state Thursday to seize Pimlico and Laurel Park racetracks from the Maryland Jockey Club and sell them to his company, insisting that it could return the beleaguered properties to profitability using the proceeds from its recently approved slots casino at Arundel Mills mall.

Maryland's horse racing industry depends on the operation of the two tracks and the Preakness Stakes. On Thursday, Cordish, president and chairman of the Baltimore-based Cordish Cos. ratcheted up the pressure on the Jockey Club, which has said it plans severe cutbacks in its racing schedule.

Cordish encouraged the state to take advantage of a 2009 law that he believes allows Maryland to seize the tracks, saying, "I have a lot of confidence in the leadership in this state." If the properties were for sale, Cordish said, he would likely try to buy them with other business partners. The company would continue to operate the properties for horse racing, officials said.

"We'd be delighted. We're ready, willing and able to do it," Cordish added, noting that the struggling tracks could flourish under the right ownership. "It all depends on who owns it. Time after time, we've taken over businesses and they've thrived."

In response to Cordish's comments, Mike Gathagan, a spokesman for the Jockey Club, repeated Thursday that the tracks are not for sale.

In 2009, the General Assembly passed a law granting the state authority to take over the tracks in the wake of the bankruptcy of the Jockey Club's then-owner, Magna Entertainment Corp. At the time, the move was presented as a last-ditch option to ensure the survival of the Preakness Stakes, the second leg of horse racing's Triple Crown. The Jockey Club has not made any suggestion that the still-profitable Preakness is in jeopardy.

Shaun Adamec, spokesman for Gov. Martin O'Malley, said the eminent domain authority was granted "under the threat of losing the Preakness" and to be employed only if necessary.

"It was put out there as a way to show those who would seek to pull the Preakness out of Maryland that we would do everything we can do make sure it doesn't happen," he said. "It's still considered a last resort. If there's a private industry solution to this, then that would obviously be preferable."

Cordish won final zoning approval from Anne Arundel County voters on Tuesday to construct a billion-dollar slots casino and entertainment complex at the mall after a bitter campaign in which supporters and opponents spent a combined $6 million. Cordish defeated an opposition that was financed by the Jockey Club, which had hoped to steer slots to Laurel instead.

The war of words between Cordish and the Jockey Club continued Thursday at a news conference at Cordish Cos.' downtown Baltimore headquarters.

Cordish dismissed statements made on Wednesday by Tom Chuckas, president of the Jockey Club, who said he was moving forward with plans to drastically curtail racing at the tracks, although attempts to cut the racing schedule would need approval from state regulators. Cordish called those comments "their latest nonsense, their latest noise."

Cordish pointed to his casino, expected to open sometime in 2012, as an important untapped revenue source for the tracks, as the company said it intends to aggressively pursue plans to open a temporary casino while simultaneously building its permanent structure. A temporary casino could open as early as next year.

Cordish said he wants to "expedite" development of the 4,750-machine slots parlor, a process that would include a temporary site that would likely hold about 2,000 slot machines and could being operating in as few as five months. That move could quickly generate revenue for the state and county, and would include a 9.5 percent share to the horse racing industry that would result in $60 million alone from the Arundel Mills site. State regulators said they would welcome a proposal for a temporary casino.

The Jockey Club's plan, which must be reviewed by the state's racing commission, would eliminate live racing at Laurel Park and turn the facility into an off-track betting site. It also would close a Bowie training center. And it would run a 40-day annual meet at Pimlico around the Preakness Stakes — a schedule too short to sustain the industry in the state, according to racing boosters.

Lou Ulman, the chairman of the Maryland Racing Commission, said in an interview Thursday that the regulatory agency would do its "best to convince the Jockey Club to continue to operate on some basis at Laurel."

The Jockey Club plans to submit its new operating plan to the commission at a meeting scheduled for Nov. 29.

Ulman said another option is to look for potential legislative solutions next year, including converting some of the slots revenue allotted for improving tracks into operating costs or some "other things that could be done to allocate funds to allow them to stay open and keep the thousands of jobs that the industry provides."

Adamec said it's too early to say what legislative options would be feasible.

Ulman said using eminent domain would be "very difficult to sell legislatively" because the difficulty of assessing fair market value for the two tracks and the Preakness.

For the state to exercise eminent domain would be "an expensive and complicated process," said Alan Foreman, attorney for the Maryland Thoroughbred Horsemen's Association.

"But I guess every option has to be on the table now because this industry is not going to survive based on what's happening," he said.

nicole.fuller@baltsun.com

hanah.cho@baltsun.com

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