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Racing stance is wait and see

THE BALTIMORE SUN

Joseph A. De Francis was ecstatic, bubbly even. After announcing the sale of a majority interest in Pimlico and Laurel Park to Magna Entertainment Corp., he gushed: "Everyone affiliated with Maryland racing should pop a champagne cork and celebrate."

That was Monday. Six days later, the reserve of champagne at Maryland liquor stores remains secure.

In a curious reaction to such a monumental announcement, many people involved with Maryland racing yawned. Others expressed doubt that this new Magna-De Francis partnership would produce dramatic improvements to unappealing facilities, uninspiring racing and, perhaps most important, the cynical mind-set that drags down thoroughbred racing in this state.

Erwin Mendelson, one of the most mild-mannered members of the Maryland Racing Commission, expressed most succinctly what several of his colleagues stated in separate interviews.

"I'm tired of hearing all the BS," Mendelson said. "I want to see something happen."

Before Magna can add Pimlico and Laurel to its burgeoning empire of tracks in North America, it must gain approval from the Maryland Racing Commission. The nine-member board has become bolder and more outspoken in recent years as broken promises from track management have piled up like roadside litter.

Despite issuing admonishments with increasing exasperation, commissioners have stopped short of trying to force De Francis to follow through with plans for upgrading his tracks. Now, commissioners seem emboldened by the clean slate of a new deal and the approaching entry into Maryland of the world's largest owner of racetracks and its billionaire chief, Frank Stronach.

"We are in the driver's seat right now," Mendelson said. "I want to hear from Stronach what he's bringing to Maryland racing that Joe De Francis couldn't bring. Magna has the money, apparently. Are they going to plow some of it into Maryland?"

To gain entree into the troubled waters of Maryland racing, Magna must win the approval of the commission, whose members were appointed by the governor. The panel expects to hold a hearing on Magna at its Sept. 23 meeting at a site yet to be determined.

"I'm a bit skeptical," said commissioner Terry Saxon. "We've all been burned in the past. Any promises made to us, we want to be in a position where we have some assurance that they will be carried out."

And it's not only commissioners who seem intent on demanding action. Prominent trainer Tony Dutrow, a member of the board of directors of the Maryland Thoroughbred Horsemen's Association, said he is fed up with inaction and false promises.

"I want Joe [De Francis] and Frank Stronach to show me how this new partnership is going to help the horse industry," Dutrow said. "Show me."

Added trainer A. Ferris Allen III, vice president of the MTHA: "There's such a long shopping list of things that need to be done. Where do you start, and how soon?"

Stronach, the 69-year-old chairman of Magna, was unavailable to comment. And Jim McAlpine, president of Magna, declined through a spokesman to elaborate on comments made at Monday's news conference announcing the Magna-De Francis alliance.

De Francis and his sister, Karin, would retain 49 percent ownership of Pimlico and Laurel Park. They would remain president and vice president, respectively, of the tracks. Joe De Francis would still be in charge of day-to-day management.

Subject to racing commission approval, Magna would assume 51 percent ownership of Pimlico, Laurel and the Bowie training center in a deal valued at $117 million. Pimlico and Laurel would become the 13th and 14th tracks acquired in just four years by the Canadian-based conglomerate.

Its philosophy of transforming tracks into entertainment centers and bringing racing into homes and sports bars via television and computer could revolutionize the sport. But Magna has suffered from the same affliction that plagues Maryland. It has unveiled colossal plans at its largest tracks, Santa Anita Park in California and Gulfstream Park in Florida, but has not yet delivered.

De Francis said that he and Magna leaders want to analyze the situation in Maryland before unveiling plans.

"Making physical improvements to these facilities is at the top of the list with me and Magna," he said. "We want to do our homework so that when we come up with a plan, we want to be able to implement that plan."

Implementation is the key with racing commissioners. Lou Ulman, chairman of the commission, and other members of the panel said they plan on finding out how far they can go in compelling Magna to carry out its plans.

Ulman, a lawyer, wants to know whether a stipulation that would keep the Preakness in Maryland could be made part of the sales agreement. Mendelson, an accountant, wonders whether the commission can require Magna to put money for track improvements into an escrow account.

"Can I force them to spend $200 million in six months? No," Ulman said. "But what can I do? And more important, what are they planning on doing?"

Said De Francis: "It's difficult for me to talk for Magna. But Maryland is very important to them. The Preakness is the only Triple Crown race they're involved with. When they set their priorities, Maryland and Maryland racing will be very high on their list."

John Franzone, a member of the racing commission and its immediate past chairman, repeatedly has called for track management to upgrade its tracks, take better care of its patrons and reach out to new customers. Those are Magna's expressed goals. Still, Franzone is skeptical.

"I like what Magna's talking about," Franzone said. "But unfortunately, how realistic is it? They're talking about turning tracks into Vegas-type destination locations.

"Well, the casinos I've been in in Las Vegas, they're not a metal building and a couple of sofas. You're talking big, big money here. With the revenue stream racetracks have, somebody's got to show me how that's doable."

Franzone and other commissioners also want to explore the management arrangement between De Francis and Magna. According to De Francis, he could force Magna to buy him out at any time, but Magna could not force him out until the end of the fourth year.

"They talk about keeping the same management," Franzone said. "Well, I'm not sure anybody's been totally overwhelmed by their performance. And their history with partnerships is not good.

"Now, we've got a new owner. Any business partnership is a difficult thing, especially when the prior ownership stays in management. If you look at the business world, that arrangement more often fails than succeeds."

Ellen Moyer, a racing commissioner as well as mayor of Annapolis, said she doesn't know a lot about Magna, except what she's read in the newspaper. But she knows about Maryland.

"I hope this owner does not consider us to be a secondary state, because we're not," Moyer said. "We have a wonderful history of horse racing that has never been marketed very well. We deserve facilities as attractive as Keeneland's, and our racing needs to be as strong as Churchill Downs'.

"We've heard lots of words in the past about what the tracks are going to do. Words are cheap. We need to find some way to ensure that the words are backed up."

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