Funding for those options would be authorized by emergency legislation now speeding through the General Assembly. Introduced this week by Gov. Martin O'Malley, the bill also would authorize the state to seize other Maryland assets owned by financially distressed Magna Entertainment Corp., including major horse tracks and large parcels of land.
Pimlico Race Course and Laurel Park would be legally sound and fiscally wise.
"There is no analysis at this point, and I think there has to be," said Sen. Rona E. Kramer, a Montgomery County Democrat, adding that to proceed with a purchase without detailed studies would be "extremely irresponsible."
Del. Anthony J. O'Donnell, the Republican leader in the House of Delegates, called O'Malley's eminent domain request "overly broad" because it would authorize the seizure not only of the Preakness and its Baltimore track, Pimlico Race Course, but virtually every other Maryland asset of Magna.
Still, O'Malley's emergency condemnation plan seems headed for passage in the General Assembly's final days - with a majority of lawmakers recognizing that the measure's greatest potency could be as a negotiating tool.
Del. H. Wayne Norman Jr., a Harford County Republican and bankruptcy attorney, said a bankruptcy judge would likely "frown" on the state's eminent domain claim. But he predicted that the state could use the proposed law or existing statutes to negotiate an agreement with Magna's creditors, and that the judge would eventually let a sale to the state go forward.
Even though state acquisition of much of Maryland's thoroughbred industry would raise a thicket of legal and practical issues - such as how to fairly value intellectual property like the second jewel of the Triple Crown or who would operate the race courses - Maryland needs to equip itself with all available options, said Joseph C. Bryce, O'Malley's chief legislative aide.
While a 1992 law gives Maryland the right to match any agreed-upon price for the Preakness if it is offered for sale, the statute could work against the state's interest, Bryce said.
He outlined a scenario in which a private bidder agrees to pay an inflated value for the race and an artificially deflated value for the tracks - thus raising the price for Maryland taxpayers if the state's right-of-first refusal were deemed valid by the federal court.
The Senate's budget committee approved the eminent domain legislation Thursday, and a floor vote is expected Friday. The House of Delegates plans a work session on the legislation Friday. The presiding officers of both chambers support the bill, and it is expected to pass before the General Assembly adjourns for the year Monday.
Annapolis officials are increasingly alarmed at the prospect that the Preakness could go the way of the Colts football team, which in 1984 abruptly departed Baltimore for Indianapolis. "The consequences of doing nothing are likely to be far worse than any complication we may encounter by passing ... this legislation," Bryce said.
Gregory A. Cross, a Baltimore bankruptcy attorney retained by the state, told lawmakers that Maryland would "likely" participate in an expected auction of Magna's assets.
Many lawmakers pressed officials for the state's long-term intention for the Preakness and tracks. Bryce acknowledged that at the moment "there is no plan on how to ultimately use and dispose of or maintain the assets" if they are acquired.
Baltmore Sun reporter Julie Bykowicz contributed to this article.
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