Baltimore officials trying to retain the Preakness Stakes and save Pimlico Race Course floated a half-billion-dollar plan to the track’s owner to pay for improvements there while also funding renovations at two of the company’s other Maryland tracks.
It’s the plan Baltimore Mayor Catherine Pugh — now on an “indefinite” leave of absence — referenced when she traveled to Annapolis on March 21 to testify against a state bill that would accelerate improvements at Stronach Group’s Laurel Park horse track and Bowie Training Center, a proposal city officials believe would lead to Preakness being relocated to the Anne Arundel County track.
While the mayor said she thought city officials had worked out a deal with Stronach, the Canadian company said a day later that, despite meetings with city officials, “at no point in time was a proposal presented or discussed that had any feasible financial plans for the City, State or for the thoroughbred racing industry.”
The city's so-called “Triple Crown” proposal, a copy of which was obtained by The Baltimore Sun, involved spending $545 million to upgrade Pimlico, Laurel and Bowie, and laid out a complex scheme for where to get the money and how to pay it back. It proposed using a variety of funding sources, including some that would require changes in state law and others that don’t even exist.
Bill Hecht, a Stronach executive, called the proposal a “non-starter” that is not viable and relies too much on taxpayer subsidies.
Anthony Manganaro, a retired developer who was a part-owner of Always Dreaming, the 2017 Kentucky Derby winner, said he thought he had “a deal on a concept to negotiate a deal” with Stronach officials before the company publicly dismissed the talks.
As the General Assembly heads into its final day on Monday, Stronach is hoping to get approval instead for a deal that would accelerate the Laurel Park renovations by issuing state bonds. In order to receive the money from the bonds, Stronach would be required to meet targets for redeveloping the Pimlico property under a proposal moving through the state Senate. If the Senate approves that bill on Monday, it would move to the House of Delegates in the final hours of the session.
Stronach officials have made clear that they see the future of their horse racing business at Laurel, where they want to turn the facility into a “super track.” They’ve only promised to run the Preakness Stakes race, the second leg in horse racing’s Triple Crown, at Pimlico through 2020.
The city’s proposal called for Maryland Economic Development Corp. to issue $360 million worth of bonds for the projects — $240 million for Pimlico and $120 million for Laurel and Bowie.
The bonds for Laurel and Bowie would have been paid back through the state’s Racetrack Facility Renewal Account, funded by a portion of slot machine revenue. The proposal counted on using racetrack renewal money for 20 years, although under current law, slots money will stop going into that account before the bonds are paid off.
The Racetrack Facility Renewal Account gets slots money for 16 years after each casino opened. After 16 years, that money goes into a state education fund instead.
The state’s six casinos opened between 2010 and 2016, so the racetrack renewal account will begin to dry up in 2026 and be gone entirely in 2032.
The General Assembly would have to change state law to keep that money going to the tracks — instead of education — to pay off the bonds.
The $240 million of bonds for Pimlico renovations, meanwhile, would have been paid off by a mix of other sources: existing local aid from the casinos, existing payments that horse owners now make to the tracks, a new lottery game and a portion of proceeds from sports betting, which hasn’t been legalized in Maryland.
On top of that, the Triple Crown plan counted on the city to approve a new tax-increment financing plan to pay for $145 million worth of infrastructure to support Pimlico’s redevelopment. Such plans rely on a project’s future tax revenue to pay off the spending.
Other sources include taking $25 million in state money known as Project Core that is used to tear down vacant homes, $5 million already set aside for a Preakness museum and $10 million from the Stronach Group selling personal seat licenses for track-side suites and a hotel at Pimlico.
The Stronach Group would have been required to donate the Pimlico property to the city or the state as its investment in the plan.
Hecht, the Stronach executive, said that he doesn’t believe there’s any support to spent more taxpayer subsidies on the racing industry. He said the company “never walked away from the table” and is open to hearing any about viable proposal involving Pimlico that “works for the community and works for the city of Baltimore.”
“We also have never been informed that Anthony Maganaro is a duly authorized representative of the city or the state of Maryland. And until such a time, we don’t believe that such a proposal from him has any credibility to it,” said Hecht, who serves as CEO of Stronach Properities, a division of Stronach Group.
Alan Rifkin, the attorney for the Maryland Jockey Club and the Preakness Stakes, questioned Baltimore officials’ actions.
“We’e offered to meet with city officials but haven’t seen any willingness on their part to meet and discuss,” Rifkin said in a statement. “There seems to be a belief with some city officials that waiting us out is a strategy. I wouldn’t bet on the success of that strategy.”
Baltimore officials tell a different story. They thought they made progress with Stronach on the plan.
James Bentley, a spokesman for Pugh, said in a statement that the mayor believed the Stronach Group was “interested in a solution” based on discussions between the parties.
“We firmly believe that a three-track solution is possible and that we shouldn’t have to choose between Laurel, Bowie and Pimlico,” Bentley said. “We should be working together for Maryland’s Triple Crown solution to improve all three facilities.”
Bill Cole, head of the Baltimore Development Corp., the city’s economic development arm, recalled a phone discussion between himself, Manganaro and Mike Rogers, a Stronach executive, where “there seemed to be real momentum.”
But soon after, Cole said: “Literally, they just shut it down and said, ‘We’re not interested.’”