Loose rein on Columbia's horses; Costly Horse Center provides benefits few residents seem to want; $1.5 million lost since 1986

THE BALTIMORE SUN

Of all the recreational facilities that make Columbia one of the region's most attractive communities, the 88-acre Horse Center stands out -- for the wrong reasons.

Few residents use it. Few think it's important. And, year after year, it loses money -- their money -- with losses totaling an estimated $1.5 million since 1986 and $250,000 more projected over the next six years.

The center's supporters say it epitomizes the best of the planned community because riding lessons, horse shows and boarding stables are benefits that help distinguish Columbia. But the history of the center suggests another story.

Years of poor management, rubber-stamp decision-making by the Columbia Council and a philosophy that condones losing money raise questions about how Columbia governs itself and spends its budget of nearly $50 million a year, an investigation by The Sun has found.

The person most responsible for keeping the center alive was Padraic M. Kennedy, the longtime unofficial "mayor" of Columbia until his retirement last year. As president of the Columbia Association (commonly referred to as CA), he made key decisions about the center at the same time he had a strong personal interest in its fate.

Kennedy rode and boarded horses at the center, located on Gorman Road, and, until recently, kept a show horse in the stable. His children took riding lessons and competed in horse shows. And the businesses of his son and daughter-in-law put on the center's top-rated shows until last month.

None of that influenced his judgment, Kennedy said in a written response to The Sun's inquiries. He said the center "fit right in with the kind of recreation services CA was set up to offer."

"I was an advocate for all of [the association's programs] because I firmly believe they are programs that enrich the very fabric of Columbia and make living and working here such a special joy," he said.

While Kennedy, current Columbia officials and center users defend the need for the facility, its record since opening under association management in 1974 raises serious questions about the benefits Columbians receive:

Community officials assert the center is a place where residents who don't own horses can take lessons. Yet only about 600 of Columbia's 87,000 residents -- less than 1 percent -- use the center each year, and of those just 112 take lessons.

Nearly 60 percent of those who use the center aren't from Columbia. Because the center loses money -- a projected $94,000 this year -- Columbia homeowners must make up the difference. (The center charges residents an average of $24 for a riding lesson and $435 for monthly board; nonresidents pay $29 and $465, respectively.)

In a recent survey rating Columbia facilities and services in order of funding priority, residents ranked the center last.

If the Horse Center were to close, there are more than a dozen private horse facilities in Howard, Baltimore and Montgomery counties where Columbians could go, including the Patapsco Horse Center in nearby Catonsville, which Howard Recreation and Parks officials selected to run its summer riding program this year.

Goal is to break even

Despite these issues, Columbia officials are preparing to pour more money into the center. Hoping to increase use by residents and have the center break even, the Columbia Council embraced a 10-year plan last spring that calls for $885,000 in capital improvements and projects an increase in annual operating expenses from the current $682,000 to more than $1 million.

The goal is to break even in fiscal year 2006 -- after ringing up another $250,000 in losses, according to official estimates.

"If you don't put money into something at all, you can't expect it to succeed at all," M. J. Miller, a Columbia resident and Horse Center patron, told the council during testimony on behalf of the facility in April.

The plan was prepared over a matter of weeks and recalls earlier promises of fiscal reform.

In 1980 budget documents, Columbia officials predicted the center would become one of the "most profitable businesses" run by the Columbia Association, which acts as a sort of government in the unincorporated city, assessing property owners annual taxes and funding a range of services and facilities.

Association staff devised the new 10-year plan.

"I was glad to see [association officials] were thinking more creatively," said Jean S. Friedberg Jr., a council member. "But if you're going to do it in the totally correct way, you might need to do market studies and go out and study a successful horse center somewhere else. You put more into it."

Friedberg is one of 10 members of the unpaid, elected council, whose role is to set policies, approve budgets and oversee the association. For years, said former member Alex Hekimian, the council "didn't spend a whole lot of time questioning proposals" from the association about the Horse Center and other facilities, but was more of a rubber stamp. Last spring, the first year without Kennedy at the helm of the association, the council began asking tough questions about the center's operation.

"I think CA should take some of the blame for not having a more successful Horse Center," Friedberg said in an interview. "We need to have clear-cut standards and guidelines for our facilities and what constitutes an acceptable level of resident vs. nonresident pricing and participation. That has not been spelled out."

Center's losses played down

Association officials acknowledge that the center has long been a money loser and has had other problems. But they strongly defend its value and play down the annual losses. They say most services that Columbia provides residents must be subsidized -- from the annual association levy on property owners -- to remain affordable.

"If you restricted CA to just profit-making activities, Columbia would look far different than it does today," Kennedy said. "It certainly would no longer be the envy of communities across the country."

Every year, Columbians pay for that philosophy. Only five of the association's dozens of facilities and programs -- including three health clubs and before- and after-school child care -- are profitable.

"Absolutely everything else that CA does loses money, and that's appropriate," said Rob Goldman, an association vice president. "We're a community service organization. We're not a business."

For the most part, the council has agreed. "I don't think anyone ever expected [the Horse Center] was going to make money. I didn't," said Lanny Morrison, a former council chairman.

Officials note other examples: The 23 outdoor pools are projected to lose $1.3 million this fiscal year, the two golf courses, nearly $700,000. But the pools and greens are used by far more people, 37,800 and 8,100 respectively, a higher percentage of whom are residents.

The SportsPark, which has 40,000 annual visits compared with the Horse Center's 35,000, is expected to lose $102,000, but the 5,000 residents who use it make up 75 percent of patrons.

The association's informal "community service" philosophy has caused problems before. Two years ago, the association modified its spending practices after a Sun investigation revealed it had been using questionable purchasing policies. An independent audit done after the newspaper articles found "inadequate purchasing and contracting policies and procedures for a quasi-governmental organization the size of CA."

In the case of the Horse Center, without clearly defined performance standards, it's hard for the association to determine how much money is too much to lose.

But, say some familiar with the horse industry in and around Howard County, the center could be making a profit if it were better marketed and managed.

Said Friedberg, the council member: "I don't know how you make a Horse Center profitable, [but] there are many people running horse centers profitably all across the country. So I would argue that we ought to be probably doing something like breaking even."

Kennedy proposed takeover

Many of the center's problems -- from too few lesson horses to lax maintenance -- are rooted in the Kennedy era, when he called the shots as association president. It was Kennedy who proposed in 1974 that the association take over management of the center on a "no cost" trial basis from Columbia's developer, the Rouse Co., which had let the facility close.

Kennedy rode there in the early days. His son, Oliver, took lessons, cleaned stalls, boarded a horse and competed in horse shows. His daughter, Erin, was a competitor on the horse show circuit.

Kennedy's management of the center was called into question in 1986. Jose deOliveras, a former acting manager of the facility, charged that it had been emphasizing particular forms of riding favored by Kennedy to the exclusion of other types. DeOliveras, who was succeeded as manager by Kennedy's personal horse trainer, Tommy Serio, said this management method "doomed [the Horse Center] to financial failure from the outset."

The association hired an attorney and had its accounting firm audit the center's finances and operations. The association's board of directors eventually issued a report clearing Kennedy -- who had called the charges "outrageous and untrue" -- of any wrongdoing.

But that report also said the facility "did not comport with the high standards of management and operations it expects its facilities to attain."

Oliver Kennedy said it was deOliveras who managed the center poorly. "The beginning of the downfall in terms of the physical plant [was] when he took it over," he said. "He was not a businessman, for one."

An independent Horse Center panel released its own report documenting "numerous management deficiencies," which led to an inefficient use of resources and service problems.

Padraic Kennedy's ties to the Horse Center deepened after 1986. Because it had had difficulty finding a "solid management team," in Kennedy's words, the association leased the facility to horseman Russ Walther in 1987 and to Allan Gohrband in 1989.

Oliver Kennedy was paid as an independent contractor to put on horse shows and was promoted professionally by Walther during that time. In 1991, he launched the Columbia-based Equestrian Sports and Promotions and continued running the center's shows, though he made more money working other events around the country, he said.

"I think [Padraic Kennedy] had an interest in keeping the Horse Center going because he had a son who eventually got into professionally running horse shows," said Shirley Geis, a longtime county 4-H volunteer who has dealt with Padraic Kennedy and has run programs out of the center.

Kennedy disputes that. Oliver Kennedy says he hasn't profited.

"I would say if someone thought that I benefited out of that place, that place has cost me more money than I would have ever made out of it," Oliver Kennedy said. "It's not that great a facility that it would help me."

The association continued losing money -- more than $500,000 -- during the lease period. When, at the end of 1995, Gohrband fell behind in his rent payments and announced he was going out of business, Padraic Kennedy told council members that the association would reassume management rather than let the center close.

The association never seriously pursued selling the facility or letting it close, Goldman said in an interview. "The fact is, the Horse Center's an asset" that would cost more to close than keep open.

During the transition, the association turned to Kennedy's future daughter-in-law for help. Rachel Kennedy, who until recently based her business, ESP Farm, a division of Equestrian Sports and Promotions, at the Horse Center, taught staff the basics of running the facility, said her husband, Oliver Kennedy. Association staff needed help early, Kennedy indicated: Sometimes they mistakenly referred to riding rings as "rinks."

Rachel Kennedy gave up running the center's horse shows last month. She was paid a flat rate of $500 a day for the run of the show, half the market rate, Oliver Kennedy said. Though it has not done so before, the association plans to run those shows itself.

How well the center will do financially under its new plan is anyone's guess. Although the last council took on the issue more aggressively, membership on the only elected Columbia-wide group changes regularly.

With its commitment to the 10-year plan, the council has effectively answered the question whether the association should be in the equestrian business.

But Hekimian, the former council member, has doubts.

"I don't think that you can necessarily afford to be all things to all people," he said. "Perhaps if the Horse Center is not going to be a viable facility because it continues to have so few Columbia residents and continues to pile up losses, that's not the kind of facility we ought to continue providing."

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