The long-running competition between Maryland’s two biggest horse racing tracks — Laurel Park and Pimlico Race Course — might be entering the final stretch with the tracks’ owner and Baltimore boosters betting on vastly different finishes.
The Stronach Group is spending significant political capital to support its vision to tear down the nearly 149-year-old Pimlico, redevelop the 110-acre site and relocate the Preakness Stakes to an $80 million, state-subsidized “super track” at Laurel — perhaps by 2021.
Pimlico “is just falling apart,” says Tim Ritvo, chief operating officer for Stronach.
Baltimore Mayor Catherine Pugh, meanwhile, represents those who want to rebuild Pimlico, keep the Preakness there and establish a work group to start planning a $400 million redevelopment outlined in a recent Maryland Stadium Authority study.
“We will fight this with every fiber of our being,” Pugh said. “The Preakness belongs to Baltimore.”
The fate of Pimlico has been debated for years. But this time Stronach-backed legislation before the General Assembly could move the company closer to victory. And as the two sides make their case in Annapolis, Stronach appears to be much further down the path toward its vision than many Baltimore officials realized.
The Baltimore Sun examined seven years of financial records submitted by Stronach to the Maryland Racing Commission detailing how it invested $112 million in state grants, subsidized support from the horse industry and its own cash from 2011 to 2018. The company directed almost 80 percent of that money — $89 million — to Laurel, spending just $23 million at Pimlico.
The bulk of the money, $45 million, came from Maryland’s slots-funded Racetrack Facilities Renewal program over the past five years. Roughly 87 percent of those funds went to Laurel, The Sun’s review of records found.
Stronach invested an additional $3 million of its money for additional improvements at Laurel, the company said.
State law does not dictate how much money the Maryland Jockey Club, the Stronach affiliate that runs the two tracks, must spend at each.
Meanwhile, as the company favored Laurel financially, it was adding to the number of racing days there. In 2011, the company offered 114 days of racing at Laurel, increasing that to 159 days last year. Meanwhile, racing at Pimlico fell from a high of 37 days in 2015 to just 12 days last year. Nonetheless, last year Pimlico accounted for 40 percent of total operating revenues of $66 million for the two parks.
The difference in investment at the two tracks is obvious to anyone who visits.
The hulking Pimlico presents a worn, industrial facade that ushers patrons into a grimy interior of mismatched colors and materials, frequent leaks from faulty plumbing, crumbling and missing ceiling tiles and puddles of rust-colored water on the floor. It has the feel of an abandoned warehouse.
Laurel offers a more luxurious experience with far more amenities. There are shiny white barns with steeples, built at a cost of $3 million to $4 million each. The grandstand is adorned with floral arrangements, couches and chess sets. The women’s restroom features a lounge area with a couch and stylish rug. The track has carved out comfortable space for other types of gaming — rows of monitors and high-back chairs are provided in a room that hosts video game tournaments. And another room is ready if Maryland legalizes sports betting.
Despite visual clues — and records that have long been available for public inspection — some Baltimore officials expressed anger and surprise when told this week the specifics of the imbalance in spending.
It is “absolutely ridiculous” that Stronach has been spending so much on Laurel and so little on Pimlico, said Del. Dalya Attar, who represents the track’s Northwest Baltimore neighborhood. Del. Tony Bridges shared her surprise.
“They have intentionally put money somewhere else,” said Bridges, who grew up selling snacks from grocery carts to Preakness revelers outside Pimlico.
Todd Eberly, a professor of public policy at St. Mary’s College, says no one should have been surprised.
“This is a situation where politicians say they’re shocked and appalled to have discovered something they should have known for years,” Eberly said. “You can just look at the two facilities and you easily realize that the money has been going to Laurel not Pimlico… If they had been paying attention a few years ago, you could have possibly prevented the imbalance.”
Asked whether government officials should have monitored the spending patterns and flagged them, Pugh said she was generally aware of the disparity. But she said she felt reassured because Stronach was participating in the stadium authority study about the future of Pimlico, a $426,000 analysis that the company and the city both helped finance.
“We remain in conversation” with Stronach, Pugh said. “We want them to come back to the table.”
Del. Samuel “Sandy” Rosenberg, a Baltimore Democrat who represents the Pimlico area, agreed with Pugh.
“We were aware of” a funding disparity, “but looking to the long term,” Rosenberg said.
“Our focus for the last two or three years has been on the study and having a process where everybody was participating — the state, the city and the track — and not raising issues regarding how the money was currently being spent. Because if the study works out, then the money will be spent appropriately at Pimlico.”
But he acknowledged that “there has to be greater overview than there is now.”
Meanwhile, Gov. Larry Hogan has not rushed to support Pugh despite saying in the past that he supports holding the Preakness at Pimlico. And Senate President Thomas V. Mike Miller and House Speaker Michael Busch are not showing any signs of resisting the Stronach-supported legislation that has bipartisan support from lawmakers in the Laurel area. A House committee in Annapolis on Friday held the first hearing on the measure, as well as a competing proposal from Pugh to form a work group to plan the rebuilding of Pimlico.
Only Comptroller Peter Franchot has been unequivocal in his support of Pimlico and whether state officials could have done more to raise concerns about spending before now. He sees the spending disparity and the new threat to Pimlico as part of a “series of broken promises” to Baltimore that he says the state was “handed by the gambling industry when we legalized slot machines.”
“Hindsight is useless and we should have never reached this point,” Franchot said Thursday of the scramble to keep the Preakness in Baltimore.
Good business sense
Spending on Laurel only makes good business sense to Ritvo and those in the industry since Laurel is hosting so many more days of racing. City and state officials had been discussing plans for restoring Pimlico for years before the Ontario-based Stronach took full control of the Maryland Jockey Club in July 2011.
“We’ve asked the city — and [the mayor] can beat me up all she wants — ‘What’s your plan? How are you going to fund this?’ ” Ritvo said. “We think from a business perspective you’d only invest in one place.”
City officials consider a rebuilt Pimlico — with the prestige of the Preakness, the second leg of horse racing’s Triple Crown — vital to the redevelopment of a distressed area of Baltimore. Rosenberg and others say new development in the area — three new schools, an expanded recreation center and a public library project — could be derailed by Stronach’s vision to move the Preakness to Laurel.
In the city’s vision for the track, a new plaza would serve as a saddling area during Preakness week and be used the rest of the year for public concerts, performing arts, festivals and open-air markets. The stadium authority study in December states that realignment of the tracks and infield could encourage private development, including an expanded LifeBridge Health medical campus.
Ritvo said the company has not ignored Pimlico and has invested in maintenance to keep it operational. For example, the track has been equipped with rows of new flat-screen televisions. But he said it would be wasteful to embark on improvements that would require massive investments.
“Pipes are blowing up and exploding. It’s embarrassing,” he said. “Come Preakness day, we dress it up as best we can.”
Public financial records show that Stronach entered into agreements with the state’s two main horse organizations — the Maryland Thoroughbred Horsemen’s Association and the Maryland Horse Breeders Association — in which they contribute their state-legislated shares from wagering on horses to Stronach to support operations.
Since 2012 the horsemen groups have contributed $39 million to Laurel and $9.8 million to Pimlico. The money is part of the $112 million in spending reviewed by The Sun.
Maryland’s horse racing industry has received a big financial boost since the state’s first slot machine casino opened in 2010. A portion of the revenue goes to the tracks. That money did not start out flowing primarily to Laurel.
When it began to flow in 2011 into the Racetrack Facilities Renewal program, state law required it to be split evenly for three years — a total of $7.8 million of state funds for Pimlico and $7.8 million for Laurel.
After that, The Stronach Group was free to spend it on either track as long as it financed public-oriented renovations and not administrative and office repairs. The Maryland Racing Commission signed off on all the spending in public meetings.
If Pimlico supporters weren’t worried before about the disparate spending, they are now that Stronach is pushing its legislation in the General Assembly. It would enable the Maryland Economic Development Corp. to issue bonds worth $120 million to finance $80 million in improvements to Laurel, plus $40 million for a training center at the former Bowie Race Track.
Stronach’s vision was unveiled in a Feb. 8 letter Ritvo sent to Hogan, Miller and Busch. In it, Ritvo reiterates the stadium authority study’s findings that Pimlico “has reached the end of its useful life" and that he believes the $424 million estimated cost to redevelop the site and build a brand-new racing facility is not feasible. The solution: Use the renewal fund money and $60 million from Stronach to build the “super track” at Laurel to “preserve the Preakness in Maryland.”
“When Ritvo announced their plan to move the Preakness by 2022, I believe that’s when the gloves came off,” said James Bentley, a Pugh spokesman. “We were perfectly content with private, closed-door negotiations prior to that announcement.”
So Pugh wrote three of her own letters to Hogan, Miller and Busch to object, saying Stronach is “in disarray” and that the state should not be rewarding a wealthy, Canadian company.
Her urgency seems warranted as Miller has said he supports the “super track,” Busch has not responded to requests for comment and Hogan has not repeated what he had said the last two years — that he “wants to see the Preakness stay in Baltimore.”
Instead, Hogan struck a more business-friendly tone: “Stronach Group doesn’t want to invest in the track, and they own the track. Many of us would like to see the Preakness stay in Baltimore and stay at Pimlico, but there’s a lot of money that needs to be invested and the owners of the track don’t want to do it, and the city doesn’t want to do it and the state doesn’t want to do it. So, we’ve got to figure out some kind of a solution.”
Comptroller Franchot says the state dropped the ball.
“The Preakness Stakes must always be contested in Baltimore at Pimlico,” Franchot said. “The state should not have put itself in this position where a Canadian corporation could come into Maryland and assume stewardship of one of our most storied, civic treasures and proceed to reduce it to virtual ruin.”