Pimlico Viability Study: The Assessment Has Just Begun

The first phase of a Maryland Stadium Authority study into the viability of Pimlico Race Course continuing as host of the Preakness Stakes and other racing and non-racing events revealed there’s far more work to be done before a decision is made.

And the future of the historic facility apparently lies with “leadership” developing a consensus on how to proceed. The study, however, suggested there is hope that a revitalized Pimlico could be profitable.

The MSA, which is responsible for the Baltimore Orioles’ Camden Yards stadium among other projects, released the report Feb. 24, more than a week before its next board meeting.

“Although a financial analysis has not yet been developed, it is reasonable to assume that if a critical mass of the recommended physical improvements outlined in this study are pursued, Pimlico will be able to diversify its revenue-generating opportunities and realize lower operating costs for the Preakness Stakes, which should yield increased overall profitability,” said the study performed by Crossroads Consulting Services and Populous. “Once leadership comes to a consensus regarding the future direction of Pimlico as the long-term home of the Preakness Stakes, we can proceed with the next phase of the study process.”

Based on 2017 “hard costs,” the total estimated renovation or rebuild of Old Hilltop would cost $312 million. Artist renderings show a total remake of the entire Pimlico property, not just the grandstand, clubhouse and barn area.

“If a minimal approach to renovation were taken to primarily address (essential improvements), it is estimated that the cost of the renovation would be 80%-85% of this estimate,” the report states. “Given the age and state of the facilities at Pimlico, we do not believe that a piecemeal renovation approach will deliver the desired result of resolving these challenges, nor would such an approach be feasible given the extent of work required.

“Additionally, a minimalist approach to renovation with less emphasis on overall facility redevelopment and event experience may not yield the same return on investment.

According to reports in the Baltimore Sun, officials indicated a public-private partnership could be the preferred route for hundreds of millions of dollars to be spent on revitalizing the Pimlico property. Pimlico is owned by the Maryland Jockey Club, which falls under The Stronach Group; the company already has spent at least $30 million on improvements at Laurel Park in Maryland.

According to the report, direct, indirect, and induced impacts associated with the Preakness Stakes, including race-day operations and visitor spending as well as state and local sales taxes, generated approximately $18.9 million in direct spending that produced $33.7 million in total spending. The direct spending was estimated to support approximately 480 jobs and $12.9 million in employee income.

“Once leadership comes to a consensus regarding the future direction of Pimlico as the long-term home of the Preakness Stakes, we can proceed with the next phase of the study process,” the report states. “Phase 2 currently calls for a more detailed analysis associated with the preferred development option, which may include a phased approach.

“The first task in Phase 2 would consist of visioneering and concept development of an ‘ideal’ Preakness Stakes venue including programming to itemize products and capacities, integrated branding and sponsorship opportunities, cost estimates, market opportunities and revenue-generating potential. Phase 2 would outline a potential development strategy which would include an estimate of the costs and benefits associated with the agreed-upon development option as well as the associated return in terms of economic and fiscal benefits.

“Phase 2 would also identify preliminary funding sources, including alternative funding sources relating to infrastructure development, non-racing uses, and other funds, as appropriate.”

(Link: http://mdstad.com/images/pdf/PimlicoStudyPhase1.pdf)

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