ANDY ROSEN and LIZ FARMER
Daily Record Business Writers
April 8, 2009 9:36 AM
ANNAPOLIS — Gov. Martin O’Malley on Wednesday began a late-session push for stronger state control over the fates of Pimlico and Laurel racetracks and the Preakness Stakes.
All three properties are owned by Magna Entertainment Corp., which has filed for federal bankruptcy protection in Delaware. The company is asking for an auction of its assets, including the Maryland tracks, on July 30, and uncertainty over the future of the Preakness — the second jewel in horse racing’s Triple Crown — has raised increasing concern with city and state officials.
A bill proposed by O’Malley and introduced Wednesday would give the state power to seize the tracks through eminent domain, and would also give the Maryland Economic Development Corp. the authority to issue debt to buy the tracks. The state already has the right of first refusal over the sale of Preakness, but some are concerned about how that would play out in bankruptcy court.
The General Assembly concludes its annual session on Monday, but legislative leaders said the bill could work its way through both the House and Senate before then. Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George’s, has been outspoken throughout the session about the importance of keeping the Preakness in the state. A joint committee from both chambers is scheduled to meet and review the bill Thursday.
Miller said Wednesday he would be able to get the bill through the Senate by Monday, though he acknowledged that the state’s taking of private property would be extreme, given that there appear to be several willing buyers.
“If there’s a will, there’s a way,” Miller said. “And if this is the right thing to do, and I believe it is, we can make it happen.”
House Speaker Michael E. Busch, D-Anne Arundel, said he did not think the bill would result in Maryland owning and operating tracks or running Preakness. He said it could serve notice to potential buyers that the state has power over the properties.
“I think this is really ... an attempt to keep the state in a superior position, and I think a vast majority of the General Assembly is going to be in support of this,” Busch said.
O’Malley said at a news conference that he hoped the state would not have to condemn the tracks or races. The state is arguing in bankruptcy court that its right of first refusal over Preakness should stand.
Last Friday, state lawyers filed a motion to reconsider an order entered in Magna’s first-day relief filings that protected the company from the government “seizing, attaching, foreclosing upon, levying against, or in any other way interfering” with Magna’s property.
Maryland’s motion argues the enforcement of that order prohibits it from enforcing its regulatory powers, also protected by the bankruptcy court. The court is set to rule on Maryland’s motion on May 7.
Several officials said they were trying to prevent a repeat of the state’s failed effort to keep the Baltimore Colts from moving to Indianapolis. In 1984, the state passed a law giving Baltimore City the authority to condemn a sports franchise, but a federal court ruled that the city couldn’t exercise that power over the Colts because the team had already packed and moved.
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