Plan for the state to take over Pimlico Race Course gets first review in Annapolis

The architects of the deal that would allow Maryland to take ownership of Baltimore’s historic Pimlico Race Course, renovate it and run thoroughbred races there made their case for legislation to enable the agreement to a House of Delegates committee Tuesday.

The Stronach Group, which has owned the dilapidated Pimlico track for more than two decades, has signed a deal to transfer the track to the state as soon as this summer, if all goes to schedule, said Greg Cross, chair of a state authority that developed the plan. Proponents have less than three weeks to get a bill passed in the Maryland General Assembly.

“With this approach, the state would be investing in itself and the equine industry,” said Cross.

The state would use hundreds of millions of dollars from state-issued bonds to tear down the grandstand, build new seating and track facilities and construct housing for track workers. There are also discussions about a parking garage and a hotel for the site.

A yet-to-be-created nonprofit organization would eventually take over the day-to-day racing operations at the track. The nonprofit will adopt the name of the Maryland Jockey Club, the organization that’s been associated with thoroughbred racing in the state since the 1700s.

The state would also build a new training center at a location still to be selected.

The legislation seeks $400 million worth of bonds to pay for the combined costs of the Pimlico renovation and the new training center.

Stronach would exit the thoroughbred industry in Maryland while still maintaining ownership of the rights to run the Preakness Stakes, which it would license to the state for $3 million per year, plus 2% of the gross betting handle on Preakness Day and the Black-Eyed Susan Day, Cross said.

Stronach would also retain ownership of the Laurel Park track, and the company has yet to announce plans there.

The whole plan tracks closely with a proposal that was put forward by the Maryland Thoroughbred Racetrack Operating Authority led by Cross in January, dubbed “Pimlico Plus.”

Cross told lawmakers that this plan is likely to succeed where past plans to save the thoroughbred racing industry have failed.

“Despite best intentions, they all failed largely, in my opinion, because they were always half steps,” Cross said. “And because at the end of the day, the state lacked control over the implementation.”

This time around, the state will have full control without relying on a private, profit-seeking company. And with one track to support instead of two, the costs are more manageable.

“The MTROA believes that if this legislation is enacted, it will position the industry to succeed for the next 100 years,” said Cross, whose day job is as a lawyer with the Venable firm in Baltimore.

Cross said the racetrack authority projects that it will make “seven figures” — at least $1 million — annually while racing is temporarily conducted at Laurel Park during construction at Pimlico. After that, it will work on new financial projections at Pimlico, but he expects the operation to be even more profitable at a brand-new track with other revenue streams, like renting the space for events and festivals.

In order for the plan to happen, state lawmakers need to make changes to an existing law that allows the state to issue bonds for racetrack construction projects, paying the money back with existing racing subsidies from casino and lottery proceeds. Back in 2020, the state passed a law authorizing $375 million worth of bonds for renovations to both Pimlico and Laurel — plans that fell apart due to a combination of pandemic delays, cost overruns, inflationary pressures and an unexpected potential tax hit on Stronach.

“This industry is important for a lot of reasons, not just pride,” said Eric Luedtke, a former lawmaker who is Gov. Wes Moore’s chief lobbyist. “People talk about the history of Maryland racing. People talk about the fact that the Preakness has been run in the state of Maryland for now almost 150 years and how much of a part of our culture it is. But it is also a key part of our state’s economy.”

No one representing the Stronach Group, also known as 1/ST Racing, testified before the committee.

Baltimore Mayor Brandon M. Scott sent a deputy mayor, Justin Williams, who said the redevelopment of Pimlico is “a beacon of hope for economic revival and community development” to complement a forthcoming library, new parks and other amenities in the works in Park Heights.

The team pitching the plan ran into serious questions from lawmakers during more than an hour of questioning in the House of Delegates Ways and Means Committee.

Delegates from Baltimore pressed for more investment in the neighborhoods surrounding the track.

“Our priority is the community,” said Del. Dalya Attar, whose district includes the track. The community has suffered disinvestment for years, and “it’s about time we get things going.”

Del. Malcolm Ruff pressed whether, if there’s any money left over after paying off the bonds, some funds could be used in the neighborhoods.

The legislation includes a provision that the transfer and redevelopment of the track must be done in coordination with a group called the Pimlico Redevelopment Community Compact. Cross and other officials have met regularly with members of the compact from the surrounding neighborhoods.

Bishop Troy Randall of Horn of David International Ministries chairs the Pimlico compact and said he’s been impressed with efforts by Cross to understand the community’s needs and work with them.

That’s a contrast to Stronach representatives, who Randall said wanted to buy off the community rather than partner with them.

“We feel like this is finally it. This is what we’ve been waiting for,” Randall said in an interview.

Other delegates raised concerns about how the Pimlico deal would affect the harness racing industry, currently located at Rosecroft Raceway in Prince George’s County and Ocean Downs in Worcester County.

Under the bill, a portion of existing subsidies from slot machines that go to facility work at Rosecroft — which also is owned by Stronach and has been reported to be close to closure — would be redirected to paying off the Pimlico bonds.

Representatives from the harness racing industry testified that they would rather see the Rosecroft money redirected to Ocean Downs, and only if Rosecroft closes.

It’s not clear when the Ways and Means Committee will take a vote on the bill, but it could happen quickly with the clock ticking down on the 90-day General Assembly session. Lawmakers are scheduled to adjourn at midnight on April 8.

Senate President Bill Ferguson, meanwhile, said the racetrack plan and legislation has “a long road ahead.”

Ferguson, a Baltimore Democrat, told reporters that there is some apprehension among senators about the costs involved.

”We are committed to trying to salvage what we can to make sure that the horse [racing] industry is viable in Maryland, but it doesn’t come with a blank check,” he said.

Pamela Wood

pamela.wood@thebaltimorebanner.com

Pamela Wood covers Maryland politics and government. She previously reported for The Baltimore Sun, The Capital and other Maryland newspapers. A graduate of the University of Maryland, College Park, she lives in northern Anne Arundel County.

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