Tag Archives: Racing

The Laurel Preakness? Get Real

By Barry Rascovar

May 25, 2015 — The Stronach Group, which owns Maryland’s two thoroughbred one-mile tracks, is making noise, once again, about moving the crown jewel of Free State racing, the Preakness Stakes, to Laurel Race Course.

 

Pimlico Race Course

Pimlico Race Course

It’s a non-starter — and the Stronach folks probably know it.

Legally such a move can’t take place without General Assembly approval, which won’t happen.

From a racing standpoint, owner Frank Stronach would have to be brain-dead to transplant the Preakness.

All the fabled history would be lost. Laurel races couldn’t be compared with the 140 years of past Preakness performances at Pimlico. Different track, different racing surface, different times for traversing a mile and three-sixteenths.

Laurel, as built, can’t hold 140,000 fans; Pimlico can and did this month. Nor is it a certainty Laurel could draw even a respectable Preakness crowd.

It’s an isolated, suburban site where families are more interested in their kids’ soccer games than a horse race. No one can walk to the track, or catch a bus, easily. Few folks from the Baltimore region would make the long trek.

Sure, Laurel’s a nice, more up-to-date track, but to borrow from Gertrude Stein, “There is no there there.”

Diminished Triple Crown

A Laurel Preakness would diminish the prestige and currency of racing’s Triple Crown, thus devaluing Stronach’s Maryland holdings.

It also would be perceived as a huge slap at Baltimore just when the city is trying to recover from April’s civil unrest and the black eye it received nationally and internationally. The bitterness from such a move would be harsh and unforgiving.

On paper, consolidating Maryland thoroughbred racing at one track might appear a no-brainer, but it isn’t once you start peeling back the multi-layers of reality.

What the Stronach folks really want — given the fact a one-track racing schedule is illegal and probably a long-term money-loser — is concessions from Baltimore City and the state of Maryland to offset the two tracks’ operating losses, estimated at $5 million to $8 million annually.

There are a number of ways politicians could provide the track owner with financial help.

Subsidy Options

The state legislature, for instance, could revise the division of slots revenues slightly to allocate up to $10 million annually if the Stronach Group holds a spring-summer meet at an upgraded Pimlico.

The state already guarantees each of Maryland’s two standardbred tracks $1.2 million a year for just 40 days of racing. The money comes out of the slots revenue designated for bolstering purses at those harness-racing tracks at Rosecroft and Ocean Downs.

Stronach’s thoroughbred tracks are expected to receive nearly $46 million in slots revenue for purse awards in fiscal 2017 and close to $50 million by 2020. Surely the law could be amended to let the tracks apply for a subsidy from that account to offset operating losses .

Pimlico logo

Both the state and city also could work with the Stronach Group to float inexpensive bonds for some of the improvements at Pimlico.

Baltimore City, which already is giving over $100 million in tax breaks and another $300 million in public subsidies to developers of Harbor Point downtown, could offer a similar but smaller package of infrastructure improvements and long-term tax rebates if the Stronach Group turns Pimlico into a redeveloped, multi-entertainment center.

Stronach’s Contribution

While Frank Stronach has dragged his feet in putting dollars into his Maryland tracks, he has been a good corporate citizen, even footing the bill for an expensive machine tool-and-dye training school south of the Pimlico track that taught inner-city residents the skills needed to secure good-paying, in-demand jobs.

Thanks to millions in slots revenue already designated for future race track improvements, Maryland has signaled its willingness to help revitalize thoroughbred racing.

Now it needs to seal the deal in a way that ensures Pimlico’s future and offers hundreds of new jobs for the depressed community that lies to the historic track’s south and west.

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Racing: Green MD Industry

 

By Barry Rascovar

June 2, 2014 — Not far from my home, down a steep patch of Greenspring Avenue on the way to Glyndon, lies a glorious environmental sight — and a stark contrast between the past and present for Maryland’s horse industry.

Descending into the Worthington Valley, a broad, green panorama of horse farms reveals itself.  This is prime Maryland horse country.

As the $1.5 million Belmont Stakes approaches, with the best chance in decades to witness racing’s elusive Triple Crown for three-year-old thoroughbreds, it’s appropriate to review the state of Maryland racing.

Sagamore’s Renaissance

The vast 530-acre thoroughbred spread known as Sagamore Farm, restored to its earlier glory by UnderArmour founder Kevin Plank, dominates Worthington Valley, highlighted by Sagamore’s white painted fences and corporate training center mansion atop a distant ridge.

Sagamore Farm, training track

Sagamore Farm, training track

Far to the right lies Hunt Valley and the blueblood horse farms that have hosted the grueling, four-mile Maryland Hunt Cup timber race for 92 of its 118 years.

In the foreground, though, lies beautiful but empty barns on 100 acres of land. Their sad fate underlines the fragility of Maryland’s horse industry, just as Sagamore Farm and the Maryland Hunt Cup illustrate the strength of the industry’s future.

The empty barns used to have a sign on its gates that read “Maryland Stallion Station.” Prominent horse breeders joined together in 2003 to make the Worthington Valley once again famous for its thoroughbred champions.

Maryland Stallion Station

Maryland Stallion Station

What the owners didn’t count on was Maryland’s resistance to doing what neighboring states had done to resuscitate their horse industries: legalize slot machines and dedicate a small portion of the proceeds to rebuilding race  tracks and dramatically boosting purses — the lifeblood of the industry.

Horse owners quickly recognized there was money to be made in Delaware, West Virginia and Pennsylvania as purses soared at tracks in those states. They took their horses and left Maryland.

Meanwhile, politicians in Annapolis ignored the obvious trend and resisted legalizing slots.

Declining Racing Industry 

As a result, Maryland’s horse industry spiraled deeper and deeper into decline.

At its worst point, the state lost 80 percent of its stallions, mares and foals because of the poor business climate here.

Finally, the industry’s distress became so obvious Gov. Martin O’Malley asked his Labor Secretary, Tom Perez (now U.S. Secretary of Labor) to study the state of racing in 2007.

Tom Perez

Tom Perez

His impartial and persuasive report laid out the facts.

Citing a University of Maryland study, he wrote, “The horse racing and breeding industry in Maryland accounts for over 9,000 jobs, and has an economic impact of more than $600 million.”

“A decade ago Maryland led its neighbors in handles and purses — the amount bet on races and the prize money awarded to winners — and the number of horses being bred. These statistics are the lifeblood of the racing industry. But the introduction of slot machines in Delaware and West Virginia has resuscitated and revitalized the previously moribund horse racing and breeding industries in those states. As a result, Maryland’s horse racing and horse breeding industries have been placed at a distinct competitive disadvantage.”

Perez continued, “The economic impact of slots on the horse racing industries in surrounding states is undeniable. Slots have generated thousands of jobs in these areas, and are subsidizing other priorities, such as education and transportation. In fact, Marylanders playing slots in Delaware and West Virginia are subsidizing education and other priorities in these states to the tune of approximately $150 million per year.”

Out of State Competition

The fate of Maryland Stallion Station confirmed Perez’s findings. It couldn’t compete against breeding farms in neighboring states offering generous racing subsidies.

Who would want to breed valuable race horses in Maryland when the purses, coupled with large bonuses for locally bred thoroughbreds, were growing huge in nearby states, thanks to slots revenue?

Maryland Stallion Station barn, 2005

Maryland Stallion Station barn, 2005

The owners of Maryland Stallion Station made a valiant effort, but they couldn’t overcome the state’s lack of favorable business conditions.

They relocated their stud animals in 2008 and went out of business.

Revived By Slots

Eventually, with the booming success of Maryland Live! Casino at Arundel Mills, the state’s racing slowly started to rebound, just as Perez suggested.

Sagamore’s fortunes are proof that this formula — tying a percentage of slots revenue to the racing industry — works. Both Sagamore’s breeding and training businesses are on an upward track.

The optimism of horse owners, trainers and breeders on Preakness Day illustrated the turnaround that is taking place.

Most encouraging has been the breeding uptick at Sagamore Farm in Baltimore County, Bonita Farm and Country Life Farm in Harford County, the Rooney family’s Shamrock Farms in Carroll County and the impressive Northview Stallion Station in Cecil County.

Northview Stallion Station

Northview Stallion Station

But danger still lurks in Annapolis.

Politicians already are talking about reneging on their agreement with the racing industry and stripping away some of the slots money reviving the industry. They want the money for other, more politically appealing programs.

What these politicians ignore is the giant environmental benefits flowing from a strong racing industry. They should review Tom Perez’s findings:

Green Racing

“Horse farms occupy over 685,000 acres of land, roughly 10 percent of Maryland’s open space. Horse racing and horse breeding go hand in hand. Preserving a viable horse racing industry helps maintain horse farms and protect open space. . . .

“The importance of reviving horse racing and breeding in Maryland extends beyond merely supporting the industry. Every breeder that can’t sustain his or her business because of a declining industry means one more farm that might succumb to development pressures. Growth in Maryland will continue, and without a vibrant horse breeding sector those open spaces could become prime real estate for developers.”

Perez noted that Maryland’s agricultural land is disappearing. Between 1970 and 2005, the state lost one million acres of farms to development — one-third of the state’s farmland.

“Retaining Maryland’s agricultural land is critical to the environment, and particularly the health of the Chesapeake Bay,” he wrote.

Sprawl Buffer

“The key to keeping farmers on their land is ensuring their operations remain economically viable. . . . As Maryland’s population grows and development pressures force farmers out, protecting the state’s horse industry becomes more and more critical to sustaining the legacy of rural Maryland and maintaining a healthy environment.”

Perez concluded that the racing industry “is an important economic engine for Maryland, and provides an important buffer against sprawl development.”

The governor’s office reports that Maryland’s horse industry today is valued at $5.6 billion. The horses are worth $714 million. The farms employ 28,000 people.

It also notes this surprising fact: Maryland contains twice as many horses per square mile as Virginia, Texas, California or Kentucky.

This state’s racing traditions run deep as symbolized by the large crowds drawn annually to the Preakness and the Maryland Hunt Cup.

Maryland Hunt Cup timber race

Maryland Hunt Cup timber race

After Baltimore’s Horseshoe Casino opens late this summer, more slots dollars will flow into thoroughbred and standardbred racing purses. When the MGM Grand Casino opens in about two years at National Harbor, still more revenue will come racing’s way.

What lies ahead could turn into a grand revival for horse racing in Maryland.

Necessary Upgrades

Of course, that will depend on the ability of track owners to use slots revenue for major modernization upgrades that appeal to 21st century sports lovers.

The industry also must find a way to underwrite year-round racing. (There will be no Maryland racing at all this summer.)

Maryland’s political leaders have a responsibility to foster the growth of horse farms and high-quality racing in places like the Worthington Valley.

It’s great for the environmentl, strengthens an important agricultural business and is a sport worth saving.

Worthington Valley

Bucolic Worthington Valley

A prosperous racing industry is a decided plus for citizens of the Free State, one that politicians need to encourage, not discourage, in Annapolis.

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