The Stronach Group, proprietor of Santa Anita Park, is getting smaller as a racetrack operator after it was introduced that an settlement in precept has been reached to show over Pimlico Race Course in Baltimore to the state of Maryland for much-needed renovation and rebuilding. The observe would then be leased to a brand new set of operators chosen by the state.
It additionally implies that the Preakness Stakes, the second leg of the Triple Crown, might be held at close by Laurel Park, additionally owned by TSG, for not less than two years beginning in 2025. TSG will preserve the mental rights to the Preakness and lease them to the brand new operators of Pimlico. Monetary phrases weren’t disclosed.
Gov. Wes Moore stated he was hoping the small print of the transaction would be concluded within the subsequent 30 to 45 days. Craig Fravel, government vice chairman of TSG’s 1/ST Racing and Gaming, stated he was hoping to wrap issues up in 60 to 90 days.
“I’m very assured this may get achieved,” Fravel stated.
It’s the second observe that TSG has exited from since July. The corporate introduced that it was closing Golden Gate Fields in Northern California on the finish of final 12 months, however then gave it a six-month lifeline and can shut the observe in June.
The contraction provides extra uncertainty to the already-frazzled California horse racing neighborhood about the way forward for racing at Santa Anita Park, a prize piece of actual property that’s estimated to be price not less than $1 billion. The concern, unfounded thus far, is that the Santa Anita property is simply too invaluable to stay a racetrack.
Fravel stated there may be nothing for horsemen in Southern California to be nervous about.
“I’d say unequivocally we aren’t getting out of the racing enterprise,” Fravel stated. “I have a look at the Maryland state of affairs like when youngsters go off to varsity, you could have one much less mouth to feed, however they’re nonetheless a part of the household. We are going to nonetheless be a part of Maryland racing.”
Fravel additionally reiterated what he advised The Instances in December concerning the observe not being up on the market.
“I get inquiries about if Santa Anita is up on the market,” Fravel stated. “I ship them to the true property of us in Toronto [TSG’s headquarters] and I’m at all times advised the identical factor: The observe is just not on the market.”
TSG is sustaining management of Laurel Park, not less than for a few years. It’s anticipated that when Pimlico is renovated that a lot of the year-round racing might be held there. At the moment, Laurel conducts a lot of the racing in Maryland, with a few very brief conferences at Pimlico.
Knowledgeable hypothesis is that Laurel will turn out to be nothing greater than an actual property property as soon as racing strikes to Pimlico. It will be an ignominious finish to a racetrack that TSG executives had been as soon as touting as a doable website for the Breeders’ Cup.
When the closure of Golden Gate was introduced, a part of the rationale was that sources from the money-losing observe may very well be diverted to Santa Anita. Maryland racing was additionally dropping cash, in keeping with TSG, however no such declare of sending cash to prop up Santa Anita was made in gentle of the divestiture of Pimlico.
“There’s not a particular money circulate diversion,” Fravel stated. “I feel it’s very clear we’re going to focus our time, effort and sources at Gulfstream Park [in South Florida] and Santa Anita. Now we have a long-term capital funding plan, and this might assist assist them. However, it’s not like every of the cash financial savings will get turned over. However cash is fungible, so who’s to say it may well’t assist down the highway?”
The Pimlico rebuilding plan is scheduled to take three years, however Fravel stated Laurel has dedicated solely to internet hosting the Preakness in 2025 and 2026. There might be no adjustments to this 12 months’s Preakness, which might be held Could 18.
“The contemplation is that the Preakness will resume at Pimlico in 2027,” Fravel stated.
The state of Maryland is scheduled to pay for the Pimlico redevelopment, pending legislative approval, utilizing about $400 million from beforehand earmarked funds from 2020. There may even be non-public buyers who will make a few of the different enhancements. The plan is for new seating and eating places, a parking storage and a lodge on the property.
Maryland racing and California racing have not less than one factor in widespread: neither have on-site casinos, leaving them at an enormous drawback due to an absence of gaming income to bolster purses. Maryland does get supplemental income from state gaming, which California tracks don’t.
And with out massive purses, you don’t get as many horses, which cuts again on mutuel deal with, the engine that drives racetrack income.
This weekend, a maiden race at Laurel has a handbag of $27,000 in comparison with Santa Anita’s $65,000, Turfway Park’s (in Kentucky) $70,000, Aqueduct’s (in New York) $80,000 and Gulfstream Park’s $89,000. In the course of the Churchill Downs meet, maiden races pays $120,000. Maryland does get supplemental income from state gaming, which California tracks don’t.
California determining an answer to its purse drawback is likely to be the largest impediment it faces. And with no resolution in sight.