By Bill Finley
Pimlico, the home of a Triple Crown race, is rundown and needs to be torn down and rebuilt. Its sister track, Laurel isn't in much better shape. To have two tracks in such condition does not make for a sustainable model for the future of Maryland racing, a problem that track owners and politicians have been trying solve for more than a decade.
But the latest round of give-and-take appears to have yielded a solution. Money once earmarked for a rebuild of both Pimlico and Laurel is expected to be used solely to rebuild Pimlico and to create a racing facility worthy of hosting the middle jewel of the Triple Crown. But there won't be any money left over for Laurel, which likely means the track is nearing the finish line.
The scenario has shifted dramatically since 2019 when the Stronach Group, which operates both Maryland tracks, was hoping to rebuild Laurel and close Pimlico. That would have meant moving the GI Preakness S. to Laurel. That led to the city of Baltimore filing suit against the Stronach Group trying to block them from closing Pimlico.
Under political pressure to keep Pimlico open, track ownership pivoted and along with horseman, breeders, political leaders and others, got behind a new plan. In May of 2020, The Racing and Community Development Act (RCDA) of 2020 was signed into law by then Governor Larry Hogan and on the surface, it seemed to be the answer to all of Maryland's problems. The legislation called for the Maryland Stadium Authority to issue up to $375 million in bonds that were earmarked to pay for a rebuild of both tracks. The Preakness was going to stay in Baltimore, Pimlico was not going to close and the Stronach Group would be able to go forward with its plans to have a new and improved Laurel as the centerpiece of the Maryland racing circuit.
“This is a very important day in the future of Maryland racing,” Alan Foreman, general counsel for the Maryland Thoroughbred Horsemen's Association, said when the legislation was signed into law.
And then the world shut down.
Within weeks of the RCDA being signed, COVID-19 was in full throttle and that meant that nothing was going to happen anytime soon when it came to building new racetracks in the state.
It's been a bit more than three years since the RCDA legislation was approved and the pandemic is a thing of the past. But, when it comes to Pimlico and Laurel, time has stood still. Untouched, they remain in the same poor condition that they were in 2020. No shovels have hit the ground and not a penny of government money has been spent to improve either track.
The problem is that the bill that was signed in 2020 is no longer a viable solution in 2023. Three years later, the $375 million originally budgeted to rebuild both tracks is not nearly enough to pay for the projects. By some estimates, due to inflation, the cost to rebuild both tracks has doubled. Additionally, rising interest rates have led to the bonds being worth less.
“Almost to the day that the RCDA was signed by governor the world shut down and COVID hit,” said Alan Rifkin, an attorney who represents the Stronach Group in Maryland. “Nothing was happening. When the world re-opened, interest rates and inflation went through the roof. The inflationary spiral was so substantial that things like lumber, concrete and steel cost 20 to 30% more right after COVID than they had been previously. The other problem is that the $375 million we estimated would only produce today about $220 million in proceeds. As you pay more in interest to bond holders, there's less in the proceeds after interest payments are made. From the interest rate spiral and the inflationary spiral, that has meant that there is not enough money to do both Laurel and Pimlico. No matter how much you stretch the blanket, the blanket cannot cover the entire bed. That is the problem.”
But there should be enough money to rebuild one of the tracks, and everything points to that being Pimlico and not Laurel. Pimlico will be spared because that is what the city and the state politicians want, since a new track and a Triple Crown race remains a big part of the fabric of Baltimore. And its apparent that without the blessing of political leaders in the state there is no way that the money needed to rebuild one track or the other would be made available to the Stronach Group.
“The legislature and the Governor's office, the powers that be, have directed the parties to prioritize Pimlico,” Rifkin said. “We understand that there is not enough money to do both capital projects. The policy makers have instructed all of us in the industry working on this to prioritize Pimlico. We know that as a fact.”
“If there is going to be any redevelopment of the racetracks in Maryland, Pimlico has to be locked into that,” Foreman said. “That's because of the Preakness and because of the importance of the racetrack to the city of Baltimore. They are inextricably linked.”
Closing Laurel would solve some problems, but also create some others, namely what to do with all the horses stabled there. The Pimlico backstretch is not big enough to handle the state's horse population. A new training center that could accommodate as many as 1,000 horses would need to be built. Rifkin said that keeping Laurel open as a training facility is not likely to happen.
Another issue may be the vision the Stronach Group has for a Maryland racing circuit with just one track. Rifkin maintains that the current structure, which includes year-round racing, is not economically viable. Not only does he want to see just one track, he wants to see a shorter racing season. That is something that could lead to a contentious relationship with horsemen.
“I don't think it should come as a surprise to anyone that operating two racing facilities 20 miles apart from one another is not conducive to profitability or, for that matter, sustainability under the current circumstances,” he said. “That is why we continue to raise the question of industry-wide restructuring in an effort to right size the number of facilities and right size the number of racing days in order to best ensure a viable, sustainable and profitable racing industry for years to come.”
Those are problems for another day. The emphasis now is on hitting the reset button on a project that would give Maryland racing a quality, modern facility that works for such a big event as the Preakness. With there still being a number of issues that have to be resolved before construction can begin on a new track, it's not clear what the timeline might be.
“There have been so many estimates so far as when a new Pimlico would be up and running,” Foreman said. “There was a time that people were estimating it would be ready for this year's Preakness. And as you know, the wrecking ball hasn't hit the grandstand yet. During construction Laurel will have to be operating during the time it will takes to construct a new Pimlico. I don't think the wrecking ball will hit Pimlico until a plan has been established for the racing industry in terms of year-round racing. That means that a training center site will have to be identified and plans for it will have to be developed. It's conceivable that construction could start after the Preakness next year, but a lot of work will have to be done between now and then to accommodate that happening.”
No matter when it happens, the future of Maryland racing is set to look nothing like the present. Pimlico is the more celebrated of the two tracks because it is the home of the Preakness, but Laurel has quite a history of its own. It opened on Oct. 2, 1911. In 1952, they ran the first ever Washington D.C. International, the first U.S. race that sought horses from overseas and it soon became one of the biggest events on the calendar. In 1984, the track was sold to Frank J. De Francis and his partners, Robert and John “Tommy” Manfuso, who brought several innovative improvements to Laurel.
But progress needs to be made in Maryland and most agree that the only way that will happen is if Laurel is razed and that a new Pimlico becomes the centerpiece of the future of Maryland racing.