The gaming corporation that owns Arlington International Racecourse in suburban Chicago announced the signing of a $197.2-million purchase and sales agreement Wednesday that would sell the 326-acre crown jewel of Illinois racing to the Chicago Bears football team for the planned construction of a new stadium and mixed-use development.
According to a Sept. 29 Churchill Downs, Inc. (CDI) filing with the Securities and Exchange Commission, the firm anticipates a late 2022 or early 2023 closing of the deal.
The announcement came four days after Arlington staged what were possibly the final horse races ever at the opulent Illinois oval. The deal announcement also appears timed to coincide with the closure of the third business quarter of the year, which ends Sept. 30.
If the deal ends up closing as planned, the demise of Arlington–which has raced Thoroughbreds since 1927 and was reborn in grand fashion after a 1985 fire–will mark the third prominent Thoroughbred track owned by CDI that the corporation has put out of business in the past decade.
At the start of the 21st Century, Hollywood Park, Calder Race Course and Arlington were on nearly everybody's Top 10 list of United States racetracks. CDI has now either sold off (or is in the process of selling off) all three of them, substantially weakening those tracks' respective circuits in California, Florida and Illinois.
Even though Wednesday's announcement was hardly unexpected–CDI officials said as early as 2020 that the firm planned to get rid of Arlington, and in February 2021 bidding was officially opened–there was still longshot speculation in the wake of that news that racing could still be preserved for a short period of time before the wrecking crews move in.
For starters, there is talk that the Bears are only entering into the purchase agreement to try and negotiate a better lease with the City of Chicago on the team's current downtown home of Soldier Field, which runs until 2033.
According to the Chicago Tribune, representatives of the Bears had cancelled a planned meeting Tuesday with Chicago Mayor Lori Lightfoot's administration, and they haven't told city representatives what it would take to keep the team at Soldier Field, where the Bears have played since moving from Wrigley Field in 1971.
“Look, we have attempted to understand what their interests are for months and they have not shared them,” Lightfoot said in the Tribune article. “I can't negotiate a deal by myself.”
The Daily Herald of suburban Chicago also reported Wednesday that the football team's owners might not have deep enough pockets to actually follow through with the privately funded building of a stadium, which has an estimated $5-billion price tag. The appetite for the public funding of sports stadiums has been drying up in recent years all across the U.S., so it might be difficult for the Bears to get a civic or state partner to pay for some or all of the project.
But even if a stadium does get funded and built, the timeline for a full build-out is at least five years away, meaning Arlington still could host races under new ownership or management, similar to what happened at Hollywood Park before that property, too, got turned into a football stadium.
According to the one-paragraph release issued Wednesday by CDI, “The closing of the sale of the Property is subject to the satisfaction of various closing conditions.” It also noted that, “CDI is planning to use the proceeds of the sale to purchase or invest in replacement property that qualifies as an Internal Revenue Code §1031 transaction.”
That means that the corporation will attempt to defer federal taxes on the deal by reinvesting the proceeds of the sale in one or more other properties.
The relationship between Arlington and the horse people who race in Illinois has been contentious for years now. The split widened considerably in August 2019 when CDI stunned Illinois stakeholders by intentionally missing a deadline to apply for a racino license after more than a decade of working with the Illinois Thoroughbred Horsemen's Association to get the Illinois Gaming Act passed as a way to boost purses via other forms of betting.
CDI's decision not to pursue slot machines and table games at the track took on heightened controversy because the gaming corporation has an ownership stake in a nearby competing casino and is aiming to open another near Chicago.
Although CDI has stated that it received multiple bids on the 326-acre Arlington property, only one of those publicly disclosed bidding parties had plans to keep racing alive at Arlington.
That bid had been submitted by the track's former president, Roy Arnold, in partnership with developers and investors. It called for the track to remain in place, while a mid-size arena for a minor-league hockey team was constructed as part of a 60-acre entertainment district alongside a 300-unit housing development and 60 acres of industrial space.
The Bears and CDI released the following statements, which read, in part:
“We are excited to have executed a Purchase and Sale Agreement (PSA) for the Arlington Park property,” Bears president Ted Phillips said. “Finalizing the PSA was the critical next step in continuing our exploration of the property and its potential. Much work remains to be completed, including working closely with the Village of Arlington Heights and surrounding communities, before we can close on this transaction.
CDI's chief executive Bill Carstanjen said, “This has been an extraordinarily competitive bid process. Congratulations to the Chicago Bears for their professionalism and perseverance. It is clear they are committed to an exciting vision for their team and their fans.”
CDI never submitted at least a placeholder bid for racing to continue at Arlington in 2022. On Sept. 22, the Illinois Racing Board awarded 76 Chicago-area Thoroughbred race dates for next year to Hawthorne Race Course, which must now function as a year-round dual-breed venue, splitting seasons to accommodate 75 dates of harness racing.