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In Baltimore's lawsuit, we get a preview of the endgame for Pimlico and the Preakness

Baltimore Mayor Catherine Pugh is suing the owners of Pimlico Race Course, the Stronach Group. The lawsuit filed Tuesday is an effort to block them from moving the Preakness Stakes or using state bonds for Laurel Park improvements.

Many Baltimoreans have compared the prospect of losing the Preakness to the city’s loss of the Colts a generation ago. But what we’re looking at here isn’t a Mayflower-vans-in-the-night situation. No, what Pimlico’s owners are doing is more like moving to a new house one carload at a time, and they’ve been doing it in full public view for nearly a decade.

That’s what explains both the urgency and the legal difficulty of Baltimore’s lawsuit against the Stronach Group. Pimlico’s owners have, as the suit alleges, conducted a systematic effort to invest heavily in their other Maryland thoroughbred track, Laurel Park, and not in Pimlico, which company officials claim is at the end of its useful life. State law prohibits the company from moving its most valuable asset — the Preakness Stakes — from Pimlico to Laurel or anywhere else absent a natural disaster, but as the city’s suit alleges, the company seems intent on creating an unnatural one. The Stronach Group says it will hold the second leg of the Triple Crown at Pimlico this year and next, but it has made no promises beyond that. Meanwhile, it is seeking during this legislative session to make the state a partner in the effort by requiring that 80 percent of the racetrack renewal funds generated by Maryland slots taxes go toward paying off bonds for a massive facility improvement program at Laurel and a nearby training center in Bowie.

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We don’t know what a judge will make of the city’s request that the courts declare that moving the Preakness to Laurel is illegal, given that the Stronach Group hasn’t actually announced plans to do that, or that the Laurel improvement funding legislation violates the statutes governing the Maryland Economic Development Corporation and constitutional restrictions on the use of state debt to benefit an individual company, given that it hasn’t passed yet. The city is asking the courts to see the handwriting on the wall and act pre-emptively to stop what looks likely to happen before it does. The city will certainly face questions about whether its action is premature before even getting to arguing the merits. Stronach has already indicated that.

But if nothing else, the suit offers a sense of how the city thinks this slow-motion conflict might be resolved. Mayor Catherine Pugh has been notably aggressive and open about her criticism of the Stronach Group this year, including dredging up the allegations and counter-allegations in lawsuits by the company’s founder, Frank Stronach, and his daughter and successor, Belinda, who are engaged in a nasty family feud. That seemed like a curious strategy given that Baltimore’s preferred outcome is for a massive redevelopment of Pimlico into a year-round, mixed-use facility — a $400 million-plus vision that would require the active participation of (and substantial investment from) the track’s owners.

But in the final section of the suit, Baltimore reveals its endgame: getting the Stronach Group out of the picture entirely. The suit says that the city has been “unable to agree with [the Stronach Group] on a price to be paid” for the racetrack, the Preakness and assorted tangible and intangible property related to it, and therefore it is seeking to acquire them through its powers of condemnation related to economic development and revitalization. Perhaps Baltimore is bluffing, thinking the threat would be enough to bring the Stronach Group to the bargaining table on a Pimlico redevelopment. After all, the Preakness is responsible for an outsized share of revenue for the Stronach Group’s subsidiary, the Maryland Jockey Club.

Or perhaps Baltimore would actually go through with acquiring the track and the race; it could then sell the land to another developer and enter into an agreement with some entity to run the Preakness. Despite the price tag for the city’s preferred redevelopment plan, it’s not so far fetched, given Sinai Hospital’s desire to expand, real estate trends in the area and the possibility of redeveloping the site in such a way that it has year-round uses beyond horse racing.

The bottom line: Baltimore is signalling that it’s ready to play hardball.

And whatever may happen in court, Baltimore isn’t alone on this. Gov. Larry Hogan this week reiterated his desire to keep the race in Baltimore (even as he said he didn’t know how to accomplish that), and Baltimore County lawmakers are joining with the city delegation to oppose moving the race. Lawmakers need to demonstrate their commitment by rejecting the legislation authorizing the MEDCO bond plan for Laurel. Aside from legitimate questions about its constitutionality and the wisdom of legislative meddling in MEDCO, the bill runs counter to a decades-long commitment to keeping the Preakness in Baltimore. State Sen. Bill Ferguson, a Baltimore Democrat, is pushing a failsafe amendment to the legislation, requiring that the bond financing be authorized only after the Board of Public Works approves a redevelopment plan for Pimlico that can be completed within six years. That helps, but the better course of action would be to reject the legislation altogether. The state doesn’t need to be a partner in Stronach’s disinvestment in Baltimore.

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