The city of Baltimore and the owners of the historic but dilapidated Pimlico Race Course have come up with a way to keep the prestigious Preakness Stakes at the 149-year-old track in Northwest Baltimore.
The parties briefed The Baltimore Sun on the deal that could end vexing problems that have lingered for decades over funding for improvements, sports fans’ changing tastes, and tensions between local leaders, neighbors and the operators of the track. Last winter, the city sued the track owner, and officials of The Stronach Group said they were committed to holding the Preakness at Pimlico only through 2020.
Now, The Stronach Group has pledged to donate the land to the city or an entity created by the city for development in and around the track. Pimlico’s antiquated grandstand and clubhouse would be demolished. A new clubhouse would be built and the track rotated 30 degrees to the northeast to create nine parcels of land that could be sold for private development.
In all, Pimlico would receive $199.5 million as part of the project. Training and stable operations would be consolidated at The Stronach Group’s track at Laurel Park in Anne Arundel County, which would receive $173.4 million for improvements. The Stronach Group would look to divest itself of the Bowie Training Center.
Baltimore city and state legislative leaders hailed the plan as one that would keep the 144-year-old race, the second leg of racing’s Triple Crown, at its longtime home.
“This is an historic moment,” Democratic Mayor Bernard C. “Jack” Young said in a prepared statement. “The Preakness Stakes is an important part of the city’s legacy and future.”
Belinda Stronach, the chairwoman and president of The Stronach Group, which owns the Maryland Jockey Club, said the agreement contained “transformative plans for the racing industry in Maryland.”
But even those who drafted the agreement acknowledge it would require multiple changes to state law by the General Assembly in 2020, the assumption of new responsibilities by the Maryland Stadium Authority, as well as the possible creation of an organization to own and run the site. Alan Rifkin, who represented the jockey club in four months of discussions to develop the plan, said he did not know what would happen to the recommendations if there was not swift legislative approval.
“I don’t have a crystal ball,” he said.
The estimated timetable calls for construction to be completed in three to four years after it’s approved by the legislature. Under the deal, the Preakness would remain at Pimlico even during construction.
[ More: Key takeaways from the plan ]
Crucial to the plan is convincing lawmakers to extend the life of a subsidy for the tracks called the Racetrack Facilities Renewal Account. The state’s casinos each pay a certain percentage of their slot machine profits into the fund, which is used for upgrades at the tracks.
Backers of this new Pimlico and Laurel proposal want to use that money to help pay off $348 million worth of bonds, to be issued by the stadium authority, that would finance most of the $375.5 million redevelopment.
But casinos are only required to pay the money for 16 years after they open. So, the racetrack renewal money will start running out in 2026 and be gone after 2032. For the plan to work, lawmakers would have to change state law to extend the payments from casinos to cover the 30-year payback of the bonds.
The proceeds would be used not only for the Pimlico track and community redevelopment, but also for Laurel Park. Laurel would receive a new clubhouse and training facilities, an all-weather track, new stables and new housing for backstretch workers.
Changes at Pimlico
The “Old Hilltop” track is steeped in history. Pimlico is where Man o’ War romped to victory in the 1920 Preakness and the first tote board was introduced in 1933. Seabiscuit upset War Admiral there in a 1938 match race, and Secretariat overwhelmed the Preakness field in 1973.
The new Pimlico could create a different feel for the Preakness, which is Maryland’s largest and splashiest sporting event and has been called Baltimore’s “Super Bowl.”
Infrastructure improvements and the new clubhouse would address past problems that have embarrassed the track and the city on Preakness Day, including out-of-order bathrooms, leaking roofs and structural issues that closed a portion of the grandstand.
A berm would be built into the infield to allow for temporary suites around the third turn and down the stretch. The Stronach Group pledged to pay $8 million to $10 million a year for the fan accommodations, which would only be needed during the Preakness meet.
The Stronach Group would sign a lease for a minimum of 30 years to use the property for two months each year to prepare for and run the Preakness, and Rifkin said the company would extend the lease after that.
Still to be determined would be whether celebrations around the meet would continue to include an infield concert.
For use the rest of the year, the plan proposes half a dozen athletic fields in the infield, areas to host markets and festivals, and banquet and event space in the grandstand.
From feuds to lawsuit to deal
While Pimlico has had its own troubles, so has the family that founded The Stronach Group. The Canadian family has been embroiled in a legal feud that has pitted its patriarch, Frank, against his heir apparent, Belinda.
The senior Stronach, who founded the company, sued his daughter a year ago, charging her with mismanaging the firm while spending lavishly on herself. Other family members jumped into the fray with suits of their own and this summer, Belinda Stronach sued her father for defamation.
At the same time, preserving the Preakness at Pimlico seemed like a long shot.
The future of Pimlico had long been a subject of debate and government studies. In December, the stadium authority released a sweeping redevelopment option that was projected to cost $424 million, an amount The Stronach Group called far too costly.
During the 2019 General Assembly session in Annapolis, the company unsuccessfully sought bond funding to begin creating a so-called “supertrack” at Laurel, a project that could have sidelined Pimlico.
Meanwhile, Baltimore leaders expressed dismay after The Baltimore Sun reported in February that since 2013, The Stronach Group had used 87% of its state subsidies to pay for renovations at Laurel Park.
The Stronach Group had said it wasn’t worth spending more than $400 million to rebuild a track that hosts just 12 racing days a year.
A month before the 2019 Preakness, the Maryland Jockey Club said it was closing off 6,670 seats in the Old Grandstand’s open-air section for safety reasons.
But Baltimore and The Stronach Group began making progress in talks after the city in June dropped the suit against the company that alleged it was “openly planning to violate Maryland law by moving the Preakness” to Laurel. State law says the race can be moved to another track in Maryland “only as a result of a disaster or emergency.” The city asked a court to grant it ownership of Pimlico and the Preakness through condemnation.
The suit was withdrawn after Young took over as mayor following the resignation of Democratic Mayor Catherine Pugh in a scandal involving the sale of her self-published children’s books.
Negotiators said Young was instrumental in the plan being crafted, although the first step in the four months of discussions was made by The Stronach Group, which offered to donate the land it owns at Pimlico.
The new plan relies on the General Assembly approving complex legislation in the session that starts in January, to be called the Racing and Community Development Act of 2020.
The officials who developed the proposal are selling it to legislators as a way to fund needed improvements without tapping new general funds.
“The plan lives within the racing industry’s means,” Rifkin said.
Rifkin, city representative William H. Cole and Alan Foreman, who represented the state’s thoroughbred industry, spent 120 days developing the agreement after the city dropped its lawsuit. Asked if the legislation needed to be approved in the next session, the three responded in unison: “Yes.”
[ Pimlico Race Course to close nearly 7,000 seats just a month before thousands arrive for Preakness Stakes ]
State Senate President Thomas V. Mike Miller and House of Delegates Speaker Adrienne A. Jones issued a joint statement expressing optimism about the plan.
“We are pleased that the parties have come together to negotiate a win-win for the racing industry and the communities of Baltimore that ensures the Preakness will remain in Baltimore city and that we have sustainable racing at Laurel Park year-round in Maryland,” the Democrats wrote.
They added: “We look forward to working with Governor Hogan to move this project forward for the good of the city and the state of Maryland.”
The office of Gov. Larry Hogan, a Republican, declined to comment, except to say he had received a letter describing the plan.
It’s not guaranteed that lawmakers will agree to extend the casino payments. The measure could face opposition from casino owners, as well.
The letter to Hogan was signed by the mayor, Stronach, Baltimore County Executive Johnny Olszewski Jr. and Anne Arundel County Executive Steuart Pittman Jr. The county executives are Democrats.
It also was signed by Rifkin, Cole and Foreman.
The letter said the proposal presents “a path to ensure the continuity of the Preakness Stakes at Pimlico and enhance thoroughbred horse racing for the benefit of the entire state.”
In a statement, Olszewski said he looked forward to working with legislators on the plan.
“The horse racing and breeding industries are an important part of Baltimore County’s economy and history," Olszewski said.
More improvements for Laurel
Under the new plan, Laurel Park would remain the primary site for year-round thoroughbred racing in Maryland with an extensive reworking.
In addition to a new clubhouse, The Stronach Group plans to add a Tapeta-brand synthetic track alongside the existing dirt and turf tracks.
[ Pimlico vs. Laurel: A look at the facilities ]
All of the barns would be replaced with structures with room for more than 1,500 stalls. Some would be located on the existing backstretch area, with others on the opposite side of the track near the intersection of Route 198 and Whiskey Bottom Road.
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In doing so, The Stronach Group would give up the chance at doing commercial or other development at that intersection, but would enable Laurel to house enough horses to keep racing viable.
The existing dormitories — which have come under scrutiny for their subpar living conditions — would be torn down and replaced with housing called “Laurel Commons.”
Bowie future uncertain
Under this new proposal, Bowie would get no investment at all.
Earlier this year, The Stronach Group had proposed spending $40 million to reopen the training center using Racetrack Facility Renewal Account money to secure financing.
The new plan calls for possibly donating the land to Bowie State University or the city of Bowie.
Sen. Douglas J.J. Peters, a Democrat who represents Bowie, said he’s hopeful a land donation will come through and the property can be put to use. He said the city looked at purchasing the land earlier, but the property was “in limbo” while negotiations over the fate of Pimlico and Laurel took place.
"You could build fields there. There’s just a lot of things to do with that open space,” Peters said.