Maryland taxpayers may be off the hook for two horse racing tracks owned by bankrupt Magna Entertainment Corp.
The general assembly passed legislation earlier this year to allow the state to seize Pimlico Race Course and Laurel Park through eminent domain and require the Preakness Stakes, Maryland’s largest sporting event, to stay in the state. But proposals from private-sector bidders mean the state might not take action on the tracks.
State officials say they have discussed plans with about a dozen potential buyers but will not reveal their identities. Christian S. Johansson, secretary of the Maryland Department of Business and Economic Development, told The Baltimore Sun, “our position has been pretty consistent that we favor a private-sector solution.”
Magna bought a controlling interest in the tracks in 2002 for $117.5 million.
Two Bidders Public
Two bidders making their interest public are Pikesville developer Carl Verstandig, president of America’s Realty LLC, and CNET founder Halsey Minor. Baltimore-based developer David Cordish also said his company is interested in the tracks.
A proposal to build a slots casino at Arundel Mills Mall by Cordish Cos. is awaiting a decision by the Anne Arundel County Council. In early June the council voted to push to July a vote on the proposal, which calls for 4,750 slot machines.
The proposal could generate $300 million for the state and $30 million for Anne Arundel County. If the legislation does not pass, it could reopen the bidding process for slots in the county and potentially turn the Laurel Park site into a casino.
Slots Bid Appealed
Magna bid to put slots at Laurel Park but did not pay a required application fee, disqualifying it from the competition. The Court of Appeals in June heard an appeal on the issue filed by the Laurel Racing Association, a Magna subsidiary.
Maryland voters passed a constitutional amendment allowing slot machine gambling in the state in November 2008. The amendment requires using some of the revenue to subsidize the horse racing industry.
Proposals to run the five allowed slots venues fell short of state expectations, as fewer than half the number of machines allowed under the constitutional amendment were requested in recent proposals. The results cut by at least half the state’s estimates of $600 million annual revenue from slots for the near term.
A private-sector solution for the tracks approved by Magna’s creditors would save Maryland taxpayers hundreds of millions of dollars. Real estate developers have said updating the tracks to include shopping and other venues is necessary to attract visitors.
Otherwise, state taxpayers would pay for the tracks, upgrades, and maintenance without any guarantee of earning the money back.
Marta Mossburg ([email protected]) is a senior fellow at the Maryland Public Policy Institute and a columnist for the Washington Examiner.