On Feb. 24, the first phase of a study on the costs associated with renovating Pimlico Race Course was released. The study, conducted by the Maryland Stadium Authority in conjunction with its economists and equine specialist, has placed an approximately $300 million price tag on the renovation of Old Hilltop, the 147-year-old racetrack that sits at the corner of Northern Parkway and Pimlico Road.
The release of the findings is merely the first step in a fascinating, three-sided, high-stakes chess match among the Maryland Jockey Club, owners of the state's two racetracks Pimlico and Laurel Park plus the Preakness Stakes; the state of Maryland and the city of Baltimore.
The next step may be still another study to explore how these renovations would be financed and how a track currently scheduled for 12 days of racing in 2017 could generate enough additional revenue to show a return on this investment. But the project team that authored the first study awaits further direction from the Maryland Stadium Authority.
After all, there is the considerable issue of convincing whoever winds up paying for an upgraded Pimlico that they should invest a substantial chunk of money into beautifying a facility that has one gigantic day of business -- that being the third Saturday in May.
Among the candidates who might be asked to contribute are the state of Maryland, the city of Baltimore and the Maryland Jockey Club, and perhaps there are even other sources -- but none of that is clear right now. In particular, how the city would come up with a share of this initial estimate for a track renovation is hard to imagine.
I am sure the figures tossed around -- the actual range was $248 million to $321 million -- are merely a starting point in a discussion on how to make this whole endeavor make some sort of fiscal sense to all parties involved. It's important to also keep in mind, this initial approximate $300 million figure is going to grow at the rate of Pinocchio's nose.
And that is just where the rub is. If you are the Maryland Jockey Club, you own a more updated and modern facility about 20 miles away that resides in the middle of the incredible megalopolis of Washington, D.C., and Baltimore. It also happens to be the case that Laurel Park sits on an unusually valuable 100 acres of mostly undeveloped land.
The Maryland Jockey Club has laid out a vision for Laurel Park that would include a residential component, dining and retail, all near the racetrack and all served by an expected MARC rail station.
So, what would be the business sense for the Maryland Jockey Club in making a capital investment of, say, well more than $150 million (and to be clear, that's just a hypothetical number) in another facility? What exactly does the Maryland Jockey Club get for its investment?
I know it's not apples-to-apples, but think about the Orioles or Ravens being asked to move into their new stadiums, while at the same time going into their coffers for $150 million to help fix up Memorial Stadium, so the O's could play a weekend series against the Yankees and the Ravens, a game against the Steelers -- just for the nostalgia factor. Think Orioles owner Peter Angelos or Ravens owner Steve Bisciotti would take a bite out of that apple?
At the end of the day, that is what Baltimore is asking of the Maryland Jockey Club -- to go against the good business sense of developing the racing company's overall Laurel property just because Baltimore will be harmed if the Preakness leaves. But is that really true? Aside from the hit from a prestige standpoint, will the city and state lose much in revenue? People who would have come and stayed in Baltimore hotel rooms to go to Pimlico will still stay in Baltimore.
It wasn't too many years ago, 2008 to be exact, that PressBox did a cover story entitled “The Preakness in Twilight” on the notion Maryland stood a fairly decent chance of losing the Preakness altogether. PressBox posed a couple simple questions to three powerful people: then-Stadium Authority head Fred Puddester, former head of the Stadium Authority and the man who negotiated the Browns move to Baltimore for the state of Maryland John Moag and U.S. Rep. Elijah Cummings.
However, that was before the referendum to allow slot machines in Maryland and the rise of a robust casino industry. Along with the slots came an infusion of a lot of money into the veins of the racing industry, mainly for purses, but also for facility renewal. In fact, so much money has been generated for the racing industry since the advent of slots that the racing product within Maryland has enjoyed something of a renaissance, and the financial health of the horsemen and ancillary breeding folks has improved.
This overall improving environment has allowed the Maryland Jockey Club to move forward with capital improvements at Laurel that have cost tens of millions so far and have enhanced the physical plant to the point that the Maryland Jockey Club is making a strong bid to host the first Breeders' Cup event in the state at Laurel Park in 2020 or 2021.
Another aspect of today's racing climate that has changed things is the fact there hasn't been any word from the Magna Group, parent of the Maryland Jockey Club, about moving the Preakness to one of its other notable racing properties, such as Santa Anita in Southern California or Gulfstream Park in Hallandale Beach, Fla.
Without the implied threat that Maryland could lose the Preakness, the state should be less alarmed at the notion of a Pimlico closure, with the Preakness simply moving about 25 miles further south, but still firmly in Maryland.
So, if the Maryland Jockey Club would like to simply close Pimlico, sell off the land and then put their all-out development plan in place at Laurel, who's to blame them?
Issue 231: March 2017