While Baltimore leaders celebrate a deal to keep the Preakness Stakes in the city, tough questions await the proposal in next year’s General Assembly session.
Wouldn’t the money proposed to renovate the Pimlico Race Course and Laurel Park tracks be better used for teachers and schools? When will lawmakers be able to see written copies of legislation and proposed lease agreements? Why didn’t Prince George’s County, which has a closed horse track, have a seat at the table during negotiations?
“I’m really happy to hear, after all these years of contention, that the parties were able to find a path forward,” said Del. Anne Kaiser, a Montgomery County Democrat who is chairwoman of the House Ways and Means Committee, which is likely to hear any racetrack bond legislation. “As with everything, we need to dive into the details to learn more about the deal. How will this impact education funding down the line? What trade-offs will we have to make?”
The city of Baltimore and the Stronach family, owners of the historic but dilapidated Pimlico, said Friday that they had come up with a way to keep the Preakness at the 149-year-old Northwest Baltimore track.
Under the terms of the $375 million deal, roughly $200 million would be used to rebuild Pimlico, which The Stronach Group would give to the city and lease back. A new clubhouse would be built and the track rotated to create parcels of land that the city could sell for private development. Training and stable operations would move south to Laurel Park in Anne Arundel County, which would undergo a roughly $175 million renovation.
But there are still several key elements left unresolved to make the vision a reality.
Democratic Sen. Nancy King, chairwoman of the Senate’s Budget and Taxation Committee that oversees racing and gambling, said she’d been given a basic briefing of the proposal over the phone but that she needs to learn more about the details. Her committee will scrutinize the plan, as it juggles a projected budget deficit, the possibility of legalizing sports betting in Maryland and finding money to pay for ambitious public education reforms suggested by the state’s Kirwan commission on education.
“Every time I hear the Senate president making speeches, he says: ‘We’re going to talk about Kirwan. We’re going to talk about school construction. We’re going to talk about sports betting.’ He lists all these things and they’re all in my committee,” King said.
The parties have not yet drafted proposed legislation, but plan to do so before the next General Assembly session starts in January. The bill is expected to be complex and is tentatively dubbed the “Racing and Community Development Act of 2020.”
Any law would need to authorize the Maryland Stadium Authority ― or another state entity ― to borrow money for the track redevelopments by issuing bonds. The stadium authority would be given responsibility for administering the money, a job now done by the Maryland Racing Commission.
The Stadium Authority also would manage the construction projects.
The legislation would make changes to three state funds that get money from the state’s cut of casino revenues. The funds would be used to pay off the bonds over 30 years.
One fund is the Racetrack Facilities Renewal Account; another is a fund that subsidizes purses for winning horses; and a third is money that goes to the city of Baltimore to use in Park Heights. The racetrack facilities fund and the Park Heights money are set to expire once each casino reaches its 16th anniversary, which will happen from 2026 to 2032, so the legislation would have to extend diversion of casino money to those funds.
Legislation also is needed to allow those three funds to be used to repay the bonds.
That’s already happened once before. The funds initially had an eight-year lifespan. That’s been pushed to 16 years, according to Alan Rifkin, the lawyer for The Stronach Group.
Under current law, when the 16-year window ends, the casinos would keep paying the money, but it would go to the state’s Education Trust Fund.
Supporters of the plan say they aren’t worried about diverting money to the tracks that otherwise would go to education.
“There are any number of significant policy issues a state has to wrestle with. Education is among them,” Rifkin said. He noted the plan has support from Baltimore’s mayor and county executives in Anne Arundel and Baltimore counties, who are all pushing for more money for schools.
Sean Johnson, lobbyist for the Maryland State Education Association, said his members work hard to protect funding for public schools. But he noted that projections for education spending currently go through 2025, before any additional casino money would come to the Education Trust Fund.
“I’m confident there’s enough space to accomplish both our goals on fully funding our schools and the General Assembly’s goals on any number of things,” Johnson said.
While the leaders of the legislature, Senator President Thomas V. “Mike” Miller and House Speaker Adrienne A. Jones, have said they support making the Preakness deal happen, calling it a “win-win,” it’s encountering some early opposition.
Del. Dereck Davis, a Prince George’s County Democrat who is the influential chairman of the House economic matters committee, said he will not vote for the deal in its current form.
Davis said he agrees the Preakness should remain in Baltimore, but he’s disappointed the deal doesn’t do more for a shuttered racing center in Bowie. Under proposed legislation in the 2019 General Assembly session, the Bowie course was in line for a $40 million upgrade to reopen as a training site.
Under the terms of the new deal, The Stronach Group would give the land to nearby Bowie State University.
“I’m extremely excited they were able to reach agreement. As great as Laurel is, you can’t mess with the history and tradition of the Preakness in Baltimore,” Davis said. “But to me it’s totally unacceptable as it relates to the Bowie training facility. It appears Prince George’s was completely left out of it.”
Davis noted that no one from Prince George’s was included in the negotiations, and County Executive Angela Alsobrooks didn’t sign a letter endorsing the deal, even though all other county executives with tracks in their districts did.
“I don’t know why anyone would think we would go for this,” Davis said. “Why would anyone from Prince George’s support that? I think we should have been at that table during those negotiations. As excited as I am for Baltimore, for me to be able to cast a vote for it, we’d need to go back to the table to figure out what we’re going to do with Bowie.”
But Bowie State President Aminta H. Breaux said she was “grateful” for the potential land donation.
“As Maryland’s oldest historically black university, acquisition of this property would be tremendously important to the university as we continue to grow, providing opportunities to enhance our athletic programs and expand health and recreational activities for our students," Breaux said. “Working with the city of Bowie, we also envision becoming an even stronger community partner by offering opportunities for the residents of Bowie and Prince George’s County to also enjoy recreational activities at this site.”
Bowie Mayor Fred Robinson also endorsed the plan.
“At the end of the day, Bowie could end up with a very large piece of green space that could stay green forever,” Robinson said.
Maryland Policy & Politics
In reaching the agreement to keep the Preakness, the second leg of horse racing’s Triple Crown, in Baltimore, the parties already have overcome significant obstacles, including decades of debate over how to improve and maintain the site, a lawsuit by the city that sought to seize Pimlico from The Stronach Group, and a bitter battle in the legislature this year over the company’s plans at that time to continue to improve Laurel.
“As with everything, we need to dive into the details to learn more about the deal. How will this impact education funding down the line? What trade-offs will we have to make?”— Del. Anne Kaiser, a Montgomery County Democrat and chairwoman of the House Ways and Means Committee, which is likely to hear any racetrack bond legislation
Mistrust between city leaders and Stronach officials had been fanned by legal troubles within the Stronach family and the discovery that the company already was spending much of the funds it received from the state on Laurel, while Pimlico continued to deteriorate. Failing facilities, including leaky roofs, broken-down bathrooms and electrical problems, repeatedly embarrassed Baltimore on Preakness Day, when it was the city’s chance to shine on national television.
The parties that reached the Preakness agreement — the city of Baltimore, The Stronach Group and the state’s thoroughbred industry — have not memorialized their agreement on paper. Rather, they’re working on what amounts to a handshake deal after four months of discussions.
“We have operated, at least for the last couple of months, on the understanding that if we’re ever going to get there, we have to operate on good faith and we’ve done that,” said Bill Cole of Margrave Strategies, who represented the city and Democratic Mayor Bernard C. “Jack” Young in talks.
Rifkin, who’s representing The Stronach Group, said a written agreement isn’t necessary. He’s spoken with City Solicitor Andre Davis about the deal and how to push it forward.
“There is the promise by all parties that one thing that is crystal clear is that we’re all bought into this,” Rifkin said.
Baltimore Sun Media reporter Rachael Pacella contributed to this article.
This article has been corrected to say that two, not three, of the funds that would be used to pay off construction bonds for Pimlico Race Course and Laurel Park would need to be extended for several years.