By T. D. Thornton
A license transfer that is needed for a new, non-profit group to take over the running of Laurel Park and Pimlico Race Course starting on the first of the year got pushed off the agenda at Tuesday's Maryland Racing Commission meeting because of concerns over the lack of documentation for how the incoming entity will meet an estimated $6-million budget shortfall for 2025.
But executives from the Maryland Thoroughbred Racetrack Operating Authority (MTROA), which is facilitating the state-approved change of control of the two tracks from 1/ST Racing (The Stronach Group) to a new, 501(c) (4) management organization called Maryland Jockey Club, Inc., explained to the commission that both the money from the state and its proper paperwork are in the pipeline, and that the delay is related to a series of state-level sign-offs that are part of a complex process.
Commissioners seemed to understand that line of reasoning and didn't press the MTROA on the issue. An attorney for the commission suggested that the board could schedule another meeting, even on short notice, in the next few weeks just to deal with that one crucial license-transfer item.
Six months ago, following more than a decade of speculation and planning, the state announced its intent to acquire Pimlico with the goal of transforming it into Maryland's lone premier Thoroughbred track. Pimlico will close after the 2025 GI Preakness S. for its gutting and redevelopment, and all mile-track racing in the state will shift to Laurel for at least two years, with the state leasing it from 1/ST Racing through Dec. 31, 2027, for one dollar per year.
When the new Pimlico opens, racing at Laurel will cease. While all this happens, a new off-track training facility is to be developed. All of these racing and training operations will be controlled by the new non-profit Maryland Jockey Club.
Michael Hopkins, the commission's executive director, pre-empted the Dec. 3 agenda item about the license transfer by stating that the commission doesn't have all the documentation it needs to take up the issue right now.
“We have received their five-year projections for income and expenses,” Hopkins said. “And the first year, they are projecting a loss of $6 million. And we are working with the MTROA to [ascertain] how that $6 million will be guaranteed for payment to cover those losses. We are still discussing with them how they'd like to present that to the commission in its final version.
“We understand that it's partially a budget amendment that would be coming forward, and some form of a loan to the non-profit, so that operating expenses would be covered for the first calendar year,” Hopkins said.
“But that has not occurred yet,” Hopkins continued. “So that's what we're waiting on right now. So part of the commission's concern, I think, [is that] until we have further assurances of the coverage of those expected losses for the first calendar year, [the commission has reluctance about] moving forward on transferring a license at this time.”
Swata Gandhi, the MTROA's deputy executive director, explained what needed to happen for the money to be released by the state.
“This was part of the statute that was passed, where $10 million is going to be made available with a budget amendment to the MTROA, and we are able to send it to a not-for-profit for working capital,” Gandhi said.
“Everything has been submitted to the Department of Budget Management,” Gandhi said, adding that the next steps require sign-offs from that department and the governor for the money to flow.
“We've been told that's going to happen in the next two weeks,” Gandhi said.
Marc Broady, the MTROA's executive director, said that once those sign-offs occur, the commission will get the documentation it needs to proceed with the license transfer.
“We'll make sure to get it to you as we have it. Some things are still being determined,” Broady said. “This is a complicated process, and we're all here for the same reason, to make sure that the Maryland racing industry is improved significantly and remains strong for decades to come.
“We're working on it. We will have documentation evidencing the arrival of the funds of the budget amendment,” Broady said. “It's a state process, but it's in the works. It's just a matter of days at this point before it's sent over, and we will have documentation evidencing that the Maryland Jockey Club has more than sufficient funds to cover any losses, and most importantly operations, because that's what the money is there for.”
Separately, regarding the training center, the MTROA board has made its decision on a site, but can't yet make that location public, Gandhi said.
“The site was approved at the last MTROA board meeting in a closed session. There are a few items that still need to be tied up before we can make an official announcement. But we expect to make that announcement this month, I would say in the next 10 days,” Gandhi said.
The Maryland Thoroughbred Horsemen's Association (MTHA) didn't speak on the issue, but its website on Monday did post related updates about the changeover.
“As the MTROA continues in the schematic-design phase for new Pimlico Race Course, it appears a major change to the original plans will be made,” the MTHA website stated in a Dec. 2 update.
“It's highly likely we'll be taking another look at not rotating the track,” the MTHA quoted Greg Cross, the MTROA chairman, as saying during a Nov. 15 meeting.
“Plans have called for removing the existing dirt track and turf course, moving the footprint and constructing new surfaces,” the MTHA website stated. “That would require purchase of property from the adjacent LifeBridge Health Sinai Hospital.”
Cross, according to the MTHA website, said not rotating the surfaces would preserve history and acknowledge concerns in the Park Heights community. He also said it would “shorten the build-out of the property and reduce construction costs.”
According to the MTHA website, the MTROA is projecting “a 1% increase in daily pari-mutuel handle in 2025 based upon the expectation that fewer racing dates at Laurel and Pimlico will result in an increase in the quality of the racing product. Laurel will be dark in July and August under a cooperative agreement with Colonial Downs in Virginia.”
Not a subscriber? Click here to sign up for the daily PDF or alerts.
