Md. Racing Commission approves transfer of Laurel and Pimlico

By Liz Farmer
Daily Record Business Writer

MI Developments consultant Ed Hannah (left), CEO Dennis Mills (center) and Chief Financial Officer Rocco Liscio testify Thursday before the Maryland Racing Commission.

The Maryland Racing Commission Thursday approved the transfer of Laurel and Pimlico race tracks to MI Developments Inc., whose CEO committed to bringing the businesses to a break-even status within two years.

The approval was issued three days after a bankruptcy judge gave approval of Ontario-based Magna Entertainment Corp.’s reorganization plan that includes the transfer of five of its tracks and other assets to MID, its parent company, in exchange for the payment of debts and settlements.

CEO Dennis Mills said after the commission meeting, which was held at the Pimlico Race Course clubhouse and overlooked preparations being made for the 135th Preakness Stakes, he hoped to bring the properties to financial solvency quickly.

“Two years is the max, but we want to get [them] to break-even within months,” he said.

Judge OKs transfer of Laurel and Pimlico

By Liz Farmer
Daily Record Business Writer

WILMINGTON, Del. — A judge Monday approved Magna Entertainment Corp.’s reorganization plan, which includes the transfer of Maryland’s race tracks to parent company MI Developments Inc.

That means that by the time the Preakness Stakes is run on May 15, Pimlico Race Course will be under new ownership for the first time in nearly eight years.

MID hopes to take ownership of five tracks, including Laurel Park and Pimlico in Maryland, by Friday night pending gaming licensing approval in Florida, according Magna attorney Brian Rosen.

Rosen said after the Monday hearing in U.S. Bankruptcy Court in Delaware that Magna would agree to the language changes in the track’s confirmation plan outlined in Judge Mary F. Walrath’s ruling.

“We’re all going to get it done,” said Rosen, when asked how fast Magna could work to get the necessary changes by the end of the week.

Penn National Gaming could run Laurel slots

By Liz Farmer
Daily Record Business Writer

If slots were to come to Laurel Park, prospective owner MI Developments Inc. would like to have Penn National Gaming operate the casino.

WILMINGTON, Del. — Testimony during Thursday’s hearing to confirm Magna Entertainment Corp.’s reorganization plan for Maryland’s race tracks revealed more details on the company’s initial efforts to sell its assets and what could be in store for Laurel Park.

If Magna’s plan to transfer assets to parent MI Developments Inc. is approved, the future could include Penn National Gaming operating slots at Laurel Park — if the track succeeds in obtaining a gaming license.

“MI Developments has plans to have Penn National step in for the Maryland Jockey Club,” said Marc D. Puntis, managing director of investment banking firm Miller Buckfire & Co., which manages Magna assets.

The jockey club operates Laurel Park, Pimlico Race Course and Bowie Training Center and is owned by Magna. MID is slated to take on a large percentage of Magna’s portfolio, including the Maryland properties, Golden Gate Fields and Santa Anita Park in California and Gulfstream Park in Florida.

William B. Bayne, testifying on behalf of equity shareholders objecting to Magna’s plan, said that in his conversations with MID Chairman Frank Stronach, Penn National would be a majority interest holder in gaming.

Preakness rights assured for Maryland

By Liz Farmer
Daily Record Business Writer

WILMINGTON, Del. — Tuesday’s hearing seeking approval for the sale of Laurel Park and Pimlico Race Course was marked by extensive testimony on the tracks’ financial details and their potential value with slots, as well as an assurance that the state would keep its right of first refusal to the Preakness .

 Ontario-based Magna Entertainment Corp., the bankrupt owner of the tracks, is seeking confirmation of its reorganization plan after canceling an auction to sell its Maryland properties last month. That plan includes the transfer ownership of five of its race tracks and other assets to parent company MI Developments Inc. in exchange for assuming unsecured debt and settlements.

After hearing more than four hours of testimony in the U. S. Bankruptcy Court in Delaware from two company officials and a representative for the unsecured creditors committee, Judge Mary F. Walrath continued the hearing to Thursday morning.

“It’s been a long and windy road to get to this point,” said Magna’s attorney, Brian Rosen. “And without one brick, this plan will falter and the foundation will not survive.”

Parent company reaches agreement to buy Laurel, Pimlico before auction

By Liz Farmer
Daily Record Business Writer

To obtain Pimlico Race Course and the rest of Magna’s Maryland assets, MI Developments will pay out about $114 million, including $89 million to settle a lawsuit filed by Magna’s unsecured creditors committee.Maryland’s race tracks have again been yanked off the auction block — this time because their owner has reached an agreement to sell them to its parent company.

Ontario-based Magna Entertainment Corp. on Tuesday notified the six parties who were to bid on the properties, which include Pimlico Race Course and Laurel Park, that Thursday’s auction was canceled.

Magna parent MI Developments will pay $89 million to settle a lawsuit filed by Magna’s unsecured creditors committee. That money will be used to pay general unsecured claims against Magna.

MID also will pay about $13 million to cover secured claims of PNC Bank, about $6 million for holders of unsecured claims against the Maryland Jockey Club and $5 million to the former owners of Laurel Park and Pimlico.

Foes of slots at Arundel Mills get enough signatures

By Liz Farmer
Daily Record Business Writer

A coalition formed to halt the state’s largest planned slots development near the Arundel Mills mall has succeeded in its campaign to let county voters decide whether to allow the casino to go forward.

According to its Web site, the Anne Arundel County Board of Elections has validated more than the required 18,790 petition signatures to get the measure on the ballot this November. Voters will now decide whether the County Council should have allowed zoning for the slots site planned by Baltimore developer David Cordish.

As of Thursday, 19,054 signatures have been accepted. Several thousand more signatures are still being processed by the election board.

Rob Annicelli, president of the citizens group Stop Slots at Arundel Mills, called the referendum a “daunting task,” but said in a statement he expects several thousand more signatures to be validated by the board.

A hand-wringing wait over the future of Magna’s Md. tracks

By Liz Farmer
Daily Record Business Writer

When the parent of Maryland’s thoroughbred racetracks filed for bankruptcy and announced it would sell its Maryland properties, it sent a wave of uncertainty, fear and frustration though the state’s horse racing community.

Exactly one year later, some say it’s gotten messier.

Since it filed for bankruptcy on March 5, 2009, Ontario-based Magna Entertainment Corp. placed Laurel Park, Pimlico Race Course and Bowie Training Center on the auction block, took them off last spring, then put them up back up for auction again last fall.

The company has delayed its Maryland assets auction three times in the last two months, with the latest reschedule — March 25 — adding to the feeling of instability.

It’s been a hand-wringing wait for those on the sidelines.

Auction for Laurel, Pimlico is pushed back to Feb. 10

By Liz Farmer
Daily Record Business Writer

The auction of Maryland’s thoroughbred race tracks has been delayed for the second time, and is now scheduled for three months before the state’s biggest racing day of the year — the Preakness Stakes.

The fate of Pimlico Race Course and Laurel Park is now scheduled to be decided Feb. 10, according to a motion to delay the auction filed by Magna Entertainment Corp., the company that owns the tracks.

Magna’s attorneys did not give a reason for the delay in the filing and did not return requests for comment.

Judge: No slots profit for De Francis

By Liz Farmer
Daily Record Business Writer

Joseph De Francis is one of the bidders for Magna’s Maryland properties. WILMINGTON, Del. — The former owner of Laurel Park lost his bid Tuesday to keep alive an agreement that would grant him a cut of the proceeds if the race track gets slots.

Now the only way Joseph De Francis, who sold Maryland’s thoroughbred race tracks to Magna Entertainment Corp. in 2002, stands to gain from gaming at Laurel is if he is the winning bidder on the track at its bankruptcy auction this month.

That auction was pushed back to Jan. 21 at the request of Magna. An attorney for the Ontario-based company said at Tuesday’s hearing in U.S. Bankruptcy Court that Magna wants more time to reach a preliminary agreement with one of the six qualified bidders for its Maryland properties.

Magna would then share that preliminary agreement with Maryland, to give the state the option of exercising its right of first refusal, and the other five bidders.

The auction was originally scheduled for Friday.

Cordish, De Francis submit bids for Md. tracks

By Liz Farmer
Daily Record Legal Affairs Writer 

Baltimore developer David Cordish and former track owner Joseph De Francis are among a handful of bidders for Maryland’s two thoroughbred tracks up for auction next month.

Cordish confirmed in an e-mail Monday morning he had submitted a bid for Laurel Park and Pimlico Race Course last week. The tracks are owned by the Magna Entertainment Corp., a Canadian company that declared bankruptcy in March.

Jonathan Cordish, vice president of The Cordish Cos., said Cordish’s bid does not include a plan to bring slots to Laurel Park. Cordish won a bid to build a slots casino near Arundel Mills, but the company’s plans are still subject to zoning approval by the Anne Arundel County Council. The council is schedule to take that vote on Dec. 21.

No ‘stalking horse’ bid for Md. tracks

By Liz Farmer
Daily Record Business Writer 

Baltimore developer Carl Verstandig said he wasn’t surprised Magna couldn’t reach an agreement with a ‘stalking horse’ bidder.The bankrupt owner of Maryland’s thoroughbred race tracks is moving forward in its auction of the tracks without selecting a leading bidder, but interested buyers said that change is not a deterrent.

Magna Entertainment Corp. could not come to a purchase agreement late Wednesday with the bidder it had selected to make its “stalking horse bid,” an initial bid chosen by the company that competing groups can bid against.

Ontario-based Magna was scheduled to file a motion Wednesday in federal bankruptcy court in Wilmington, Del., announcing the stalking horse bidder for its Maryland properties — Pimlico Race Course, Laurel Park and Bowie Training Center — and had been in talks with a group that filed in the first round of bidding last week.

But a managing director of Miller Buckfire, the New York-based company handling Magna’s assets auction, said Thursday Magna could not reach an agreement they felt was “deserving” of a stalking horse bid.

“Just because someone puts forward a bid doesn’t mean we have to take it,” said Michael Wildish. “They pushed our limits, and they found them.”

Miller Buckfire will instead move on and wait for the second round of bids for the properties to arrive next month.

Magna’s top bidder selection delayed

By Liz Farmer
Daily Record Business Writer 

The company that owns Maryland’s thoroughbred race tracks has selected the leading bid for the properties but is delaying the announcement of that bidder until Wednesday.

Magna Entertainment Corp., which declared bankruptcy in March, was scheduled to select a stalking horse bidder by 5 p.m. Monday. The Ontario-based firm instead filed a motion asking a bankruptcy court judge permission to extend the deadline the company set for itself to Wednesday.

A stalking horse bid is an initial bid chosen by the company that competing bidders can bid against.

Magna placed Pimlico Race Course, Laurel Park and the Bowie Training Center on the auction block last month. The auction for the properties is scheduled for Jan. 8.

Verstandig partners up in bid for Md. tracks

By Liz Farmer
Daily Record Business Writer 

The first round of bids for Maryland’s thoroughbred race tracks were submitted Monday, including a proposal from a group made up of race track operators and a local developer.

Bankrupt Magna Entertainment Corp., which put its Maryland properties back on the auction block last month, will announce its “stalking horse” bid, or an initial offer that competitors can bid against, on Nov. 9. Miller Buckfire, the New York firm handling Ontario-based Magna’s assets auction, is not releasing the number of bids entered by Monday’s deadline nor the names of the preliminary bidders.

But Pikesville developer Carl Verstandig, who had expressed his interest in buying Maryland’s tracks in the past, said Monday he joined in a bid submitted by two out-of-state track operators. He would not reveal the names of the bidders but said they operated tracks and had gaming operations around the country and would likely be interested in bringing slots to Laurel Park if possible.

Average bet amount at Pimlico up nearly 9 percent

Daily Record Business Writer
May 27, 2009 7:49 PM

Thanks to heavy betting on the Preakness Stakes, the average amount wagered this spring at Pimlico Race Course jumped nearly 9 percent despite declines in attendance and total handle for the track.

Total wagering fell $4.1 million or 2.5 percent over 20 live racing days — 11 fewer than last year — to $159.5 million. Attendance fell 17.8 percent to 271,031 for the spring meet, held April 18 to May 23.

The average daily handle, however, rose from $6.3 million to $6.9 million over 20 days of racing and 21 days of simulcast racing.

The Maryland Jockey Club credited Preakness, the second jewel of the Triple Crown, for the upswing.

“The buildup to the Preakness was nothing short of spectacular and the race lived up to the hype,” Tom Chuckas, president and chief operating officer of the jockey club, said in a statement.

Pimlico, Laurel, Preakness out of auction, but not off the block

Daily Record Business Writer
May 4, 2009 1:56 PM

WILMINGTON, Del. – Although Maryland’s thoroughbred racetracks and the Preakness Stakes have been scratched from the auction block, the tracks’ bankrupt owner and its creditors would still entertain bids for the properties, their attorneys told a Delaware bankruptcy judge Monday.

Maga Entertainment attorney Brian S. Rosen (left) and Kenneth H. Eckstein, who represents the company’s unsecured creditors, after Monday’s bankruptcy hearing.“By no means are we abandoning the possibility that we can sell those assets in the future,” said Magna Entertainment Corp. attorney Brian S. Rosen of New York-based Weil, Gotshal & Manges LLP. “We are going to permit parties to do due diligence, and in the extent that a bid comes in that is attractive, the debtors will consider it.”

Kenneth H. Eckstein, who represents the unsecured creditors committee, said that although Magna was withdrawing some highly prized assets from its auction plan — namely, Pimlico Race Course, Laurel Park and the Preakness — the group approved of streamlining the process for now.

Magna removes Laurel, Pimlico and Preakness from auction list

Daily Record Business Writer
May 1, 2009 6:43 PM

In a last-minute move, Magna Entertainment Corp. has taken Maryland’s thoroughbred racetracks and the Preakness Stakes off the auction block, but city and state officials remain cautious about the future of those properties here.

Magna, which had included Laurel and Pimlico racetracks and the Preakness in its list of assets it wanted to auction, has removed those properties from its assets up for sale in its revised auction procedures proposal submitted late Friday afternoon.

The properties belong to the Maryland Jockey Club, which was the Magna asset removed from the auction proposal. The Bowie Training Center in Prince George’s County is also no longer up for auction.

“We are still looking at our alternatives with respect to those assets, and it is unclear what value can be generated,” said Magna’s attorney, Brian S. Rosen of Weil, Gotshal & Manges LLP in New York. “Pimlico, with the Preakness, for 364 days a year it lives on that one day a year, and we’re trying to see if there something else that can be done to those assets.”

That includes looking at slots options and further discussions with the state, Rosen said.

Preakness ticket sales down 12%

Daily Record Business Writer
April 23, 2009 5:31 PM

With just over three weeks to go, ticket sales for the Preakness Stakes — Maryland racing’s biggest moneymaker — are down 12 percent, according to the Maryland Jockey Club.

While some blame the economy, others say the new policy banning outside alcohol and other beverages from the infield may be playing a part, despite the fact that the ticket price has not increased for the May 16 race.

“I think it’ll be fine, but they might suffer from that a little bit,” said Lee Corrigan, of Elkridge-based Corrigan Sports Enterprises, who is organizing the InfieldFEST event. “It’s a tough year and financial market to be doing what they’re doing, but I think they had to for many reasons.”

Wagering at Laurel Park falls 26 percent

Daily Record Business Writer
April 21, 2009 7:52 PM

After a racing season at Laurel Park marked by the poor economy and the bankruptcy of its owner, total wagering at the track dropped by nearly 26 percent this winter — nearly three times the national average.

Over 58 live racing days — one fewer than last winter — the total amount wagered dropped by $56 million to $219.8 million, according to the Maryland Jockey Club. Laurel’s season ran from Jan. 1 through April 11.

According to the Equibase Company LLC, an industry research firm based in Kentucky, wagering in the U.S. from Jan. 1 through March 31 totaled $3.1 billion, a decline of 9.4 percent from the corresponding period in 2008.

Tim Rice, an industry analyst with Rice Voelker LLC in Louisiana, called Laurel’s struggle “significantly worse” than other tracks’ since the economic downturn began last fall and attributed the gap to competition from neighboring states.

Magna can’t bundle properties

Daily Record Business Writer
April 20, 2009 8:31 PM

The state’s position in its fight to keep the Preakness Stakes got a little stronger Monday after a judge ruled that Magna Entertainment Corp.’s Maryland properties could not be bundled with its out-of-state properties in the bankruptcy auction process.

If bankruptcy judge Mary F. Walrath hadn’t ruled in Maryland’s favor, there’s no way the state could have matched bids for the Preakness, Pimlico Race Course and Laurel Park, said Raquel Guillory, spokeswoman for the Office of the Attorney General.

“It seems clear that the company is now seriously taking into account the importance of the state’s regulatory and public interest of the racing industry here in the state and it’s certainly a welcome move,” she said.

Preakness is a trademark of the Triple Crown

Daily Record Business Writer
April 16, 2009 8:15 PM

Despite the recent efforts to keep the Preakness Stakes at Pimlico Race Course, the race’s status as the second leg of the Triple Crown is only loosely protected by a marketing group and trademark that do not legally bind it to any state.

The Kentucky Derby, Preakness Stakes and the Belmont Stakes have been referred to as the Triple Crown races since the 1930s. But their official designation as such and the Triple Crown trophy didn’t begin until 1950.And at least one member of that group is concerned about a new owner’s potential impact on the Triple Crown brand.

“I would argue that if you were to move the Preakness from Pimlico you would have a new construct, and you might still call it the Triple Crown, but I wouldn’t call it the Triple Crown,” said Charles Hayward, president and CEO of the New York Racing Association Inc., which owns the Belmont Stakes. “We’re watching this very closely.”

Technically, a developer could buy Preakness and Pimlico but still move the race to an out-of-state track without violating the articles of incorporation of Louisville-based Triple Crown Productions LLC or the Triple Crown trademark.